Insight Molecular Diagnostics Inc S-3, filed Jul 30, 2020
Insight Molecular Diagnostics Inc. (IMDX)
As filed with the Securities and Exchange Commission on July 30, 2020
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Oncocyte Corporation
(Exact name of registrant as specified in its charter)
| California | 27-1041563 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
15 Cushing
Irvine, California 92618
(949) 409-7600
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Mitchell Levine
Chief Financial Officer
Oncocyte Corporation
15 Cushing
Irvine, California 92618
(949) 409-7600
(Name, address including zip code, and telephone number, including area code, of agent for service)
With copies to:
Kandace Watson, Esq.
Nazia Khan, Esq.
Sheppard, Mullin, Richter & Hampton LLP
12275 El Camino Real, Suite 200
San Diego, CA 92130
Tel: (858) 720-8900
Approximate date of commencement of proposed sale to the public: From time to time, after the effective date of this registration statement.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | Non-accelerated filer ☒ | Smaller reporting company ☒ | |||
| Emerging growth company ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of Securities Act. ☒
CALCULATION OF REGISTRATION FEE
Title of each class of securities to be registered | Amount to be registered(1)(3) | Proposed maximum offering price per share(3) | Proposed maximum aggregate offering price(3) | Amount of registration fee | ||||||||||||
| Common Stock, no par value | 6,497,898 | $ | 1.335 | (2) | $ | 8,674,693.83 | $ | 1,125.98 | ||||||||
| (1) | The Registrant is hereby registering 6,497,898 shares for resale, comprised of: (i) 1,685,807 shares of its common stock delivered to the selling shareholders at closing pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of January 10, 2020 by and among the Registrant, Cancer DX Sub, Inc., Insight Genetics, Inc., the shareholders a party thereto and Paul A. Dahlhauser as the Equityholder Representative, (ii) 229,869 (“Escrow Shares”) of the 229,885 shares of common stock currently held in escrow that may be delivered to the selling shareholders after adjustments for fractional shares following December 31, 2020, the indemnity holdback release date, and (iii) up to 4,582,222 shares (the “Earnout Shares”) of common stock, representing approximately $6 million, that may become issuable to the selling shareholders pursuant to the terms of the Merger Agreement upon the achievement of specified revenues or milestones set forth in the Merger Agreement assuming (A) the achievement of such revenues and milestones and that we elect to pay all or a portion of the resulting earnout payments to the selling shareholders in shares of our common stock, and (B) the per share price used to calculate the number of Earnout Shares to be issued is $1.30, which represents the closing price of the Registrant’s common stock on July 23, 2020 as reported on the NYSE American. The actual number of Earnout Shares issued to the selling shareholders, if any, could be materially more or less than 4,582,222 shares of common stock depending on (x) whether and to what extent the applicable future revenues and milestones are met, (y) whether we elect to pay all or a portion of the resulting earnout payments to the selling shareholders in shares of our common stock, and (z) the actual average of the closing price of our common stock during the five trading days immediately preceding the announcement that an applicable milestone has been satisfied. This presentation is not intended to constitute an indication or prediction of whether any of the future revenues or milestones will be achieved or the future market price of the Registrant’s common stock. |
| (2) | Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended (the “Securities Act”), using the average of the high and low prices as reported on the NYSE American on July 23, 2020. |
| (3) | Pursuant to Rule 416 under the Securities Act, the shares being registered hereunder include an indeterminate number of shares of common stock as may become issuable with respect to the shares being registered hereunder as a result of stock splits, stock dividends or similar transactions. |
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may change. The selling shareholders may not sell these securities pursuant to this registration statement until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION, DATED JULY 30, 2020
6,497,898 SHARES OF COMMON STOCK
This prospectus relates to the potential resale from time to time of up to 6,497,898 shares (the “Resale Shares”) of common stock of Oncocyte Corporation (the “Company”) by the selling shareholders named in this prospectus. We will not receive any of the proceeds from the sale of the Resale Shares. We will pay the expenses of registering these shares.
All of the Resale Shares that may be offered under this prospectus were, or may be, issued by us to the selling shareholders in connection with our acquisition of Insight Genetics, Inc., pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of January 10, 2020 by and among the Company, Cancer DX Sub, Inc., Insight Genetics, Inc., the shareholders party thereto and Paul A. Dahlhauser as the Equityholder Representative. The Resale Shares include (i) 1,685,807 shares of common stock delivered to the selling shareholders pursuant to the Merger Agreement, (ii) 229,869 shares (the “Escrow Shares”) of the 229,885 shares of common stock currently held in escrow that may be delivered to the selling shareholders after adjustments for fractional shares following December 31, 2020, the indemnity holdback release date, and (iii) up to 4,582,222 shares (the “Earnout Shares”) of common stock, representing approximately $6 million that may become issuable to the selling shareholders pursuant to the terms of the Merger Agreement upon the achievement of certain revenues or milestones set forth in the Merger Agreement assuming (A) the achievement of such revenues and milestones and that we elect to pay all or a portion of the resulting earnout payments to the selling shareholders in shares of our common stock, and (B) the per share price used to calculate the number of Earnout Shares to be issued is $1.30, which represents the closing price of the our common stock on July 23, 2020 as reported on the NYSE American.
The Earnout Shares have not been earned and have not been issued. The actual number of Earnout Shares issued to the selling shareholders, if any, could be materially more or less than 4,582,222 shares of common stock depending on (x) whether and to what extent the applicable future revenues and milestones are met, (y) whether we elect to pay all or a portion of the resulting earnout payments to the selling shareholders in shares of our common stock, and (z) the actual average of the closing price of our common stock during the five trading days immediately preceding the announcement that an applicable milestone has been satisfied. This presentation is not intended to constitute an indication or prediction of whether any of the future revenues or milestones will be achieved or the future market price of the Company’s common stock.
The selling shareholders identified in this prospectus may offer the shares from time to time through public or private transactions at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices. The registration of the Resale Shares on behalf of the selling shareholders, however, does not necessarily mean that any of the selling shareholders will offer or sell their Resale Shares under this registration statement or at any time in the near future.
Investing in our common stock involves a high degree of risk. You should consider carefully the risk factors beginning on page 2 of this prospectus before purchasing any of the Resale Shares offered by this prospectus.
Our common stock is listed on the NYSE American under the symbol “OCX.” The last reported sale price of our common stock on the NYSE American on July 28, 2020, was $1.43 per share.
We are an “emerging growth company” under the federal securities laws and, as such, are subject to reduced public company reporting requirements.
We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read the entire prospectus and any amendments or supplements carefully before you make your investment decision.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is __________, 2020.
TABLE OF CONTENTS
You should rely only on the information provided in this prospectus, as well as the information incorporated by reference into this prospectus and any applicable prospectus supplement. Neither we nor the selling shareholders have authorized anyone to provide you with different information. Neither we nor the selling shareholders are making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the information in this prospectus, any applicable prospectus supplement or any documents incorporated by reference is accurate as of any date other than the date of the applicable document. Since the respective dates of this prospectus and the documents incorporated by reference into this prospectus, our business, financial condition, results of operations and prospects may have changed.
The following summary highlights some information from this prospectus. It is not complete and does not contain all of the information that you should consider before making an investment decision. You should read this entire prospectus, including the “Risk Factors” section on page 2, the financial statements and related notes and the other more detailed information appearing elsewhere or incorporated by reference into this prospectus and any applicable prospectus supplement.
Overview
We are a molecular diagnostic company focused on developing and commercializing proprietary laboratory-developed tests (“LDTs”) to serve unmet medical needs across the cancer care continuum. Our 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 costs of care. We have prioritized lung cancer as our 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.
Our 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 (“NSCLC”) may benefit from chemotherapy, resulting in a significantly higher, five-year survival rate. We hold a 25% equity interest in Razor Genomics, Inc., a privately held company, that has developed and licensed to us the DetermaRx™ test. We are currently devoting substantially all of our efforts on developing and commercializing our cancer diagnostic tests DetermaRx™ and DetermaIO™, as further discussed below.
Through strategic asset and business acquisitions during 2019 and early 2020, we have gone through a transformation from a company focused on developing a single product to a company with a wider battery of laboratory-developed tests that physicians may use at different critical decision points in cancer diagnosis and treatment to support their decision-making. We believe that our effort to provide particular tests for certain key decision points along the continuum of diagnosis will mitigate the inherent risk of being a single product company and should lead to greater revenue opportunities in rapidly emerging markets in lung cancer and beyond.
Acquisition of Insight Genetics, Inc.
In January 2020, we acquired Insight Genetics, Inc. (“Insight”), a privately-held company specializing in the discovery and development of the multi-gene molecular, laboratory-developed diagnostic tests that we have 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. This new class of drugs modulate the immune response and show activity in multiple solid tumor types including NSCLC and triple negative breast cancer. 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 has also performed assay development and clinical testing services for pharmaceutical and biotechnology companies. The selling shareholders named in this prospectus acquired their Oncocyte shares in connection with our acquisition of Insight.
Corporate Information
We were incorporated in 2009 in the state of California and were formerly a majority-owned subsidiary of Lineage Cell Therapeutics, Inc. (formerly known as BioTime, Inc.) (“Lineage”), a publicly-traded biotechnology company. Since February 17, 2017, we ceased to be a subsidiary of Lineage for financial reporting purposes when Lineage’s percentage ownership of our outstanding common stock declined below 50% and, as of the date of this prospectus supplement, because Lineage’s ownership interest in our common stock has decreased to below 10%, Lineage no longer exercises significant influence over our operations and management. Our principal executive offices are located at 15 Cushing, Irvine, California 92618. Our telephone number is (949) 409-7600. Our website is www.oncocyte.com. Information contained on, or that can be accessed through, our website, is not, and shall not be considered part of, or deemed to be incorporated in, this prospectus supplement.
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Any investment in our common stock involves a high degree of risk. Before deciding whether to purchase our common stock, investors should carefully consider the risks described below together with the “Risk Factors” described in our most recent Annual Report on Form 10-K and any updates described in our Quarterly Reports on Form 10-Q, all of which are incorporated herein by reference, as may be amended, supplemented or superseded from time to time by other reports we file with the U.S. Securities and Exchange Commission (the “SEC”). Our business, financial condition, operating results and prospects are subject to the following material risks as well as those material risks incorporated by reference. Additional risks and uncertainties not presently foreseeable to us may also impair our business operations. If any of the following risks actually occurs, our business, financial condition or operating results could be materially adversely affected. In such case, the trading price of our common stock could decline, and our shareholders may lose all or part of their investment in the shares of our common stock.
We are an emerging growth company and a smaller reporting company under U.S. securities laws and may take advantage of the reduced disclosure and governance requirements applicable to emerging growth companies and smaller reporting companies, which could make our common stock less attractive to investors.
We are an emerging growth company and smaller reporting company and may take advantage of certain exemptions from various reporting requirements that are otherwise applicable to public companies that are not emerging growth companies and/or smaller reporting companies including, but not limited to:
| ● | not being required to comply with the auditor attestation requirements regarding internal controls under Section 404 of the Sarbanes-Oxley Act; | |
| ● | reduced disclosure obligations regarding executive compensation in periodic reports and proxy statements; | |
| ● | exemptions from the requirements of holding a non-binding shareholder advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved; | |
| ● | exemption from the requirement to provide pay for performance disclosure; and | |
| ● | exemption from the requirement to provide compensation ratio disclosure. |
Moreover, we also are eligible under the Jumpstart Our Business Startups Act of 2012 for an exemption from compliance with any requirement that the Public Company Accounting Oversight Board may adopt regarding mandatory audit firm rotation or supplements to the auditor’s report providing additional information about the audit and the financial statements. We may take advantage of these reporting exemptions until we no longer are an emerging growth company.
A sale of a substantial number of shares of common stock by the selling shareholders may cause the price of our common stock to decline.
If our shareholders sell, or the market perceives that our shareholders intend to sell for various reasons, substantial amounts of our common stock in the public market, the price of our common stock may decline. Additionally, such conditions may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.
The price of our stock may rise and fall rapidly.
The market price of our common stock, like that of the shares of many biotechnology companies, may be highly volatile. The price of our common stock may rise or fall rapidly as a result of a number of factors, including:
| ● | sales or potential sales of substantial amounts of our common stock; | |
| ● | results of or delays in preclinical testing or clinical trials of our diagnostic test candidates; |
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| ● | announcements about us or about our competitors, including clinical trial results, regulatory approvals, new diagnostic test introductions and commercial results; | |
| ● | the cost of our development programs; | |
| ● | the success of competitive diagnostic tests or technologies; | |
| ● | litigation and other developments relating to our intellectual property or other proprietary rights or those of our competitors; | |
| ● | conditions in the diagnostic, pharmaceutical or biotechnology industries; | |
| ● | actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; | |
| ● | variations in our financial results or those of companies that are perceived to be similar to us, including the failure of our earnings to meet analysts’ expectations; | |
| ● | general economic, industry and market conditions; | |
| ● | changes in payer coverage and/or reimbursement; and | |
| ● | impacts of the COVID-19 pandemic. |
Many of these factors are beyond our control. The stock markets in general, and the market for pharmaceutical and biotechnological companies in particular, have been experiencing extreme price and volume fluctuations, which have affected the market price of the equity securities without regard to the operating performance of the issuing companies. Broad market fluctuations, as well as industry factors and general economic and political conditions, may adversely affect the market price of our common stock.
We will not receive any proceeds from the sale of the Resale Shares by the selling shareholders covered by this prospectus.
We are registering the Resale Shares that were, or may be, issued by us to the selling shareholders to permit the resale of these shares of common stock from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling shareholders of the Resale Shares.
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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference into this prospectus and any applicable prospectus supplement may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), about the Company and its subsidiaries. These forward-looking statements are intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact, and can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “could,” “should,” “projects,” “plans,” “goal,” “targets,” “potential,” “estimates,” “pro forma,” “seeks,” “intends,” or “anticipates” or the negative thereof or comparable terminology. Forward-looking statements include, among other things, statements about:
| ● | the timing and potential achievement of future milestones; | |
| ● | the timing and our ability to obtain and maintain coverage and reimbursements from the Centers for Medicare and Medicaid Services and other third-party payers; | |
| ● | our plans to pursue research and development of diagnostic test; | |
| ● | the potential commercialization of our diagnostic tests currently in development; | |
| ● | the timing and success of future clinical trials and the period during which the results of the clinical trials will become available; | |
| ● | the potential receipt of revenue from future sales of our diagnostic tests or diagnostic tests in development; | |
| ● | our assumptions regarding obtaining reimbursement and reimbursement rates; | |
| ● | our estimates regarding future orders of tests and our ability to perform a projected number of tests; | |
| ● | our estimates and assumptions around patient populations, market size and price points for reimbursement for our diagnostic tests | |
| ● | our estimates regarding future revenues and operating expenses, and future capital requirements; | |
| ● | our intellectual property position; | |
| ● | the uncertainties associated with the coronavirus (COVID-19) pandemic, including its possible effects on our operations and the demand for our diagnostic tests and pharma services; | |
| ● | our ability to efficiently and flexibly manage our business amid uncertainties related to COVID-19; | |
| ● | the impact of government laws and regulations; and | |
| ● | our competitive position. |
We caution our shareholders and other readers not to place undue reliance on such statements.
You should read this prospectus and the documents incorporated by reference completely and with the understanding that our actual future results may be materially different from what we currently expect. Our business and operations are and will be subject to a variety of risks, uncertainties and other factors. Consequently, actual results and experience may materially differ from those contained in any forward-looking statements. Such risks, uncertainties and other factors that could cause actual results and experience to differ from those projected include, but are not limited to, the risk factors set forth herein under the title “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2019, and any updates described in our Quarterly Reports on Form 10-Q and elsewhere in the documents incorporated by reference into this prospectus and any applicable prospectus supplement.
You should assume that the information appearing in this prospectus and any document incorporated herein by reference is accurate as of its date only. Because the risk factors referred to above could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any forward-looking statements. Further, any forward-looking statement speaks only as of the date on which the statement is made. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All written or oral forward-looking statements attributable to us or any person acting on our behalf made after the date of this prospectus and any applicable prospectus supplement are expressly qualified in their entirety by the risk factors and cautionary statements contained in and incorporated by reference into this prospectus and any applicable prospectus supplement. Unless legally required, we do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or circumstances after the date of this prospectus and any applicable prospectus supplement or to reflect the occurrence of unanticipated events.
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The net proceeds from any disposition of the Resale Shares covered hereby will be received by the selling shareholders. We will not receive any of the proceeds from any such Resale Shares offered by this prospectus.
We entered into the Merger Agreement pursuant to which we acquired Insight on January 31, 2020 (the “Closing Date”). Pursuant to the terms of the Merger Agreement, we delivered 1,685,807 shares of our common stock to the selling shareholders on the Closing Date, plus we issued 229,885 shares of our common stock that are currently held in escrow, which include the Escrow Shares. These shares were issued in a private placement transaction as “restricted securities” in reliance upon exemptions from registration requirements pursuant to Section 4(a)(2) under the Securities Act, and the rules promulgated thereunder. In addition, pursuant to the terms of the Merger Agreement, we may issue the selling shareholders the Earnout Shares subject to the achievement of certain future revenues and milestones, which we anticipate will also be issued pursuant to Section 4(a)(2) under the Securities Act, and the rules promulgated thereunder. The Earnout Shares have not been earned and are not currently outstanding. The actual number of Earnout Shares issued to certain of the selling shareholders, if any, could be materially more or less than 4,582,222 shares of common stock depending on (x) whether and to what extent the applicable future revenues and milestones are met, (y) whether we elect to pay all or a portion of the resulting earnout payments to the selling shareholders in shares of our common stock, and (z) the actual average of the closing price of our common stock during the five trading days immediately preceding the announcement that an applicable milestone has been satisfied. This presentation is not intended to constitute an indication or prediction of whether any of the future revenues or milestones will be achieved or the future market price of our common stock.
Pursuant to the terms of the Merger Agreement, we agreed that we would file a registration statement, of which this prospectus is a part, to register, under the Securities Act, the resale of the Resale Shares by the selling shareholders. Accordingly, this prospectus relates to the offering by the selling shareholders of up to 6,497,898 Resale Shares, which includes the Escrow Shares and the Earnout Shares.
The following table sets forth, based on information provided to us by the selling shareholders or known to us, the names of the selling shareholders, the nature of any position, office or other material relationship, if any, which the selling shareholders have had, within the past three years, with us or with any of our predecessors or affiliates, and the number of shares of our common stock beneficially owned by the selling shareholders before and after this offering. The number of shares owned are those beneficially owned, as determined under the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under these rules, beneficial ownership includes any shares of common stock as to which a person has sole or shared voting power or investment power and any shares of common stock that the person has the right to acquire within 60 days through the exercise of any option, warrant or right, through conversion of any security or pursuant to the automatic termination of a power of attorney or revocation of a trust, discretionary account or similar arrangement. Except as otherwise set forth herein, none of the selling shareholders are a broker-dealer or an affiliate of a broker-dealer.
We have assumed all Resale Shares reflected on the table will be sold from time to time in the offering covered by this prospectus. Because the selling shareholders may offer all or any portions of the Resale Shares listed in the table below, no estimate can be given as to the amount of those Resale Shares covered by this prospectus that will be held by the selling shareholders upon the termination of the offering.
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Except as otherwise noted below, the address for each person or entity listed in the table is c/o Oncocyte Corporation, 15 Cushing, Irvine, California 92618.
| Beneficial Ownership of | Common Stock | Beneficial Ownership | ||||||||||||||||
| Common Stock Prior | Saleable | of Common Stock | ||||||||||||||||
| to the Offering | Pursuant | After the Offering (1) | ||||||||||||||||
| Number of | Percent of | to This | Number of | Percent of | ||||||||||||||
| Name of Selling Shareholder1 | Shares | Class (2) | Prospectus | Shares | Class (2) | |||||||||||||
| JOHN D. BOOTE | 2,140 | * | 13,495 | (3) | 0 | 0 | % | |||||||||||
| MARY HELEN CLARKE | 8,063 | * | 50,849 | (4) | 0 | 0 | % | |||||||||||
| PAUL A. DAHLHAUSER (5) | 29,358 | * | 185,149 | (6) | 0 | 0 | % | |||||||||||
| JOHN A. FINCHER, JR. | 47,772 | * | 301,276 | (7) | 0 | 0 | % | |||||||||||
| HOUSATONIC PRINCIPALS FUND, L.L.C. (8) | 4,393 | * | 27,707 | (9) | 0 | 0 | % | |||||||||||
| RICHARD H. BOOTE REVOCABLE TRUST (10) | 5,923 | * | 37,353 | (11) | 0 | 0 | % | |||||||||||
| SHUFAN GAO | 2,140 | * | 13,495 | (12) | 0 | 0 | % | |||||||||||
| IG INVESTORS, LLC (13) | 185,673 | * | 994,455 | (14) | 0 | 0 | % | |||||||||||
| CHRISTOPHER T. CALLAGHAN (15) | 159,105 | (16) | * | 44,824 | (17) | 119,759 | * | |||||||||||
| CTC INSIGHT, LLC (18) | 117,359 | * | 740,122 | (19) | 0 | 0 | % | |||||||||||
| EBS FOUNDATION (20) | 1,857 | * | 11,715 | (21) | 0 | 0 | % | |||||||||||
| INVESTMENT INSIGHT, LLC (22) | 102,420 | * | 645,908 | (23) | 0 | 0 | % | |||||||||||
| ERIC B. DAHLHAUSER MARITAL TRUST (24) | 113,101 | * | 204,987 | (25) | 0 | 0 | % | |||||||||||
| TERRELL ESTES | 1,857 | * | 11,715 | (26) | 0 | 0 | % | |||||||||||
| CAROLYN HANNON | 1,161 | * | 7,322 | (27) | 0 | 0 | % | |||||||||||
| MICHAEL A. MAMMARELLI | 5,276 | * | 33,275 | (28) | 0 | 0 | % | |||||||||||
| QIAGEN N.V. (29) | 88,101 | * | 555,606 | (30) | 0 | 0 | % | |||||||||||
| RAI 4 FAMILY, LLC (31) | 737,928 | 1.10 | % | 2,061,561 | (32) | 0 | 0 | % | ||||||||||
| WILLIAM TAAFFE (33) | 2,510 | * | 15,832 | (34) | 0 | 0 | % | |||||||||||
| MICHAEL D. TURNER | 9,639 | * | 60,787 | (35) | 0 | 0 | % | |||||||||||
| SANDRA NEVADA WALTON | 1,161 | * | 7,322 | (36) | 0 | 0 | % | |||||||||||
| STEPHAN W. MORRIS | 11,894 | * | 75,010 | (37) | 0 | 0 | % | |||||||||||
| ROBERT S. SEITZ (38) | 13,582 | * | 45,157 | (39) | 0 | 0 | % | |||||||||||
| ELIZABETH SEIGENTHALER COURTNEY | 473 | * | 2,986 | (40) | 0 | 0 | % | |||||||||||
| AMY SEIGENTHALER PIERCE | 218 | * | 1,375 | (41) | 0 | 0 | % | |||||||||||
| SUSAN M. WHITEHEAD | 150,536 | * | 301,848 | (42) | 0 | 0 | % | |||||||||||
| KATHERINE SEIGENTHALER | 218 | * | 1,375 | (43) | 0 | 0 | % | |||||||||||
| JOSE D. GONZALEZ | 114,791 | (44) | * | 10,661 | (45) | 113,101 | * | |||||||||||
| VERONICA SEIGENTHALER | 18 | * | 116 | (46) | 0 | 0 | % | |||||||||||
| IGNATIUS TRANSACTION PARTNERS (47) | 0 | 0 | % | 34,615 | (48) | 0 | 0 | % | ||||||||||
| TOTAL | 6,497,898 | |||||||||||||||||
| -6- |
| * | Less than 1%. |
(1) Assumes that all of the Resale Shares held by the selling shareholders covered by this prospectus are sold and that the selling shareholders acquire no additional shares of common stock before the completion of this offering. However, as the selling shareholders can offer all, some, or none of their Resale Shares, no definitive estimate can be given as to the number of Resale Shares that the selling shareholders will ultimately offer or sell under this prospectus.
(2) Calculated based on 67,250,639 shares of common stock issued and outstanding as of July 23, 2020.
(3) Consists of (i) 2,140 shares of common stock acquired on the Closing Date, (ii) 732 Escrow Shares, and (iii) 10,623 Earnout Shares.
(4) Consists of (i) 8,063 shares of common stock acquired on the Closing Date, (ii) 2,759 Escrow Shares, and (iii) 40,027 Earnout Shares.
(5) Paul A. Dahlhauser was a member of the board of directors of Insight until its acquisition by Oncocyte in January 2020.
(6) Consists of (i) 29,358 shares of common stock acquired on the Closing Date, (ii) 10,048 Escrow Shares, and (iii) 145,743 Earnout Shares.
(7) Consists of (i) 47,772 shares of common stock acquired on the Closing Date, (ii) 16,350 Escrow Shares, and (iii) 237,154 Earnout Shares.
(8) Mark Hilderbrand is the Managing Director of Houstanic Principals Fund, L.L.C. and in such capacity has the right to vote and dispose of the securities held by such entity. The address for Houstanic Principals Fund, L.L.C is One Post Street, Suite 2600, San Francisco, CA 94104.
(9) Consists of (i) 4,393 shares of common stock acquired on the Closing Date, (ii) 1,503 Escrow Shares, and (iii) 21,811 Earnout Shares.
(10) Richard H. Boote is the Trustee of the Richard H. Boote Revocable Trust and in such capacity has the right to vote and dispose of the securities held by such trust.
(11) Consists of (i) 5,923 shares of common stock acquired on the Closing Date, (ii) 2,027 Escrow Shares, and (iii) 29,403 Earnout Shares.
(12) Consists of (i) 2,140 shares of common stock acquired on the Closing Date, (ii) 732 Escrow Shares, and (iii) 10,623 Earnout Shares.
| -7- |
(13) Kent Gover is the Managing Member of IG Investors, LLC (“IG Investors”) and in such capacity has the right to vote and dispose of the securities held by such entity. The address for IG Investors is 3 Windcroft Drive, Coto De Caza, CA 92679. In October 2015, Insight issued a convertible promissory note in the original principal amount of $3,050,000 and a warrant for 1,525,000 shares, with a warrant exercise price of $0.01 to IG Investors. Prior to the Closing Date, our President, Chief Executive Officer and board member, Ronald Andrews, owned a membership interest in IG Investors, and formerly served on Insight’s board from June 2015 to August 2019. Mr. Andrews re-assigned his membership interest to IG Investors, and canceled his rights under the warrants and will not receive any Oncocyte common shares in connection with the Merger.
(14) Consists of (i) 185,673 shares of common stock acquired on the Closing Date, (ii) 4,504 Escrow Shares, and (iii) 804,278 Earnout Shares.
(15) Christopher Callaghan was the President and Chief Operating Officer of Insight until August 31, 2018 and was a director of Insight until May 1, 2018.
(16) Consists of (i) 39,346 shares of common stock acquired on the Closing Date, (ii) 2,400 shares of common stock held by Christopher Callaghan, and (iii) 117,359 shares of common stock acquired by CTC Insight, LLC (“CTC”) on the Closing Date. Christopher T. Callaghan is the Sole Member of CTC and in such capacity has the right to vote and dispose of the securities held by such entity.
(17) Consists of (i) 39,346 shares of common stock acquired on the Closing Date, (ii) 353 Escrow Shares, and (iii) 5,125 Earnout Shares,
(18) Christopher T. Callaghan is the Sole Member of CTC and in such capacity has the right to vote and dispose of the securities held by such entity. The address for CTC is 102 Lake Forest Point, Hendersonville, TN 37075.
(19) Consists of (i) 117,359 shares of common stock acquired on the Closing Date, (ii) 40,166 Escrow Shares, and (iii) 582,597 Earnout Shares.
(20) Elizabeth B. Stadler is the Trustee of EBS Foundation and in such capacity has the right to vote and dispose of the securities held by such entity. The address for EBS Foundation is 314 Walnut Drive, Nashville, TN 37205.
(21) Consists of (i) 1,857 shares of common stock acquired on the Closing Date, (ii) 635 Escrow Shares, and (iii) 9,223 Earnout Shares.
(22) Nancy Dahlhauser is the Sole Member of Investment Insight, LLC and in such capacity has the right to vote and dispose of the securities held by such entity. The address for Investment Insight, LLC is 400 Warioto Way, Condo 610 W, Ashland City, TN 37015.
(23) Consists of (i) 102,420 shares of common stock acquired on the Closing Date, (ii) 35,053 Escrow Shares, and (iii) 508,435 Earnout Shares.
(24) Eric B. Dahlhauser was the Chief Executive Officer and Chairman of the board of directors of Insight until his death in January 2019. Jose Gonzalez is the Trustee of the Eric B. Dahlhauser Marital Trust and in such capacity has the right to vote and dispose of the securities held by such trust.
(25) Consists of (i) 113,101 shares of common stock acquired on the Closing Date, (ii) 5,926 Escrow Shares, and (iii) 85,960 Earnout Shares.
(26) Consists of (i) 1,857 shares of common stock acquired on the Closing Date, (ii) 635 Escrow Shares, and (iii) 9,223 Earnout Shares.
(27) Consists of (i) 1,161 shares of common stock acquired on the Closing Date, (ii) 397 Escrow Shares, and (iii) 5,764 Earnout Shares.
| -8- |
(28) Consists of (i) 5,276 shares of common stock acquired on the Closing Date, (ii) 1,805 Escrow Shares, and (iii) 26,194 Earnout Shares.
(29) Richard Watts was a member of the board of directors of Insight until its acquisition by Oncocyte in January 2020. Thierry Bernard is the CEO of QIAGEN NV and in such capacity has the right to vote and dispose of the securities held by such entity. The address for QIAGEN NV is QIAGEN Strasse 1, 40724 Hildan, Germany.
(30) Consists of (i) 88,101 shares of common stock acquired on the Closing Date, (ii) 30,152 Escrow Shares, and (iii) 437,353 Earnout Shares.
(31) Richard Isaacson was a member of the board of directors of Insight until December 2019. Richard Isaacson is the Managing Member of RAI 4 Family, LLC and in such capacity has the right to vote and dispose of the securities held by such entity. The address for RAI 4 Family, LLC is 755 Plantation Blvd., Gallatin, TN 37066.
(32) Consists of (i) 737,928 shares of common stock acquired on the Closing Date, (ii) 63,800 Escrow Shares, and (iii) 1,259,833 Earnout Shares.
(33) William Taaffe was a member of the board of directors of Insight until its acquisition by Oncocyte in January 2020.
(34) Consists of (i) 2,510 shares of common stock acquired on the Closing Date, (ii) 859 Escrow Shares, and (iii) 12,463 Earnout Shares.
(35) Consists of (i) 9,639 shares of common stock acquired on the Closing Date, (ii) 3,298 Escrow Shares, and (iii) 47,850 Earnout Shares.
(36) Consists of (i) 1,161 shares of common stock acquired on the Closing Date, (ii) 397 Escrow Shares, and (iii) 5,764 Earnout Shares.
(37) Consists of (i) 11,894 shares of common stock acquired on the Closing Date, (ii) 4,070 Escrow Shares, and (iii) 59,046 Earnout Shares.
(38) Robert Seitz served as an interim Chief Executive Officer of Insight from February 2019 until April 2019, following the death of Insight’s Chief Executive Officer in January 2019.
(39) Consists of (i) 13,582 shares of common stock acquired on the Closing Date, (ii) 2,036 Escrow Shares, and (iii) 29,539 Earnout Shares.
(40) Consists of (i) 473 shares of common stock acquired on the Closing Date, (ii) 162 Escrow Shares, and (iii) 2,351 Earnout Shares.
(41) Consists of (i) 218 shares of common stock acquired on the Closing Date, (ii) 74 Escrow Shares, and (iii) 1,083 Earnout Shares.
(42) Consists of (i) 150,536 shares of common stock acquired on the Closing Date, (ii) 738 Escrow Shares, and (iii) 150,574 Earnout Shares.
(43) Consists of (i) 218 shares of common stock acquired on the Closing Date, (ii) 74 Escrow Shares, and (iii) 1,083 Earnout Shares.
(44) Consists of (i) 1,690 shares of common stock acquired on the Closing Date and (ii) 113,101 shares of common stock acquired on the Closing Date by Eric B. Dahlhauser Marital Trust (the “Marital Trust”). Jose Gonzalez is the Trustee of the Marital Trust and in such capacity has the right to vote and dispose of the securities held by such trust.
(45) Consists of (i) 1,690 shares of common stock acquired on the Closing Date, (ii) 578 Escrow Shares, and (iii) 8,393 Earnout Shares.
(46) Consists of (i) 18 shares of common stock acquired on the Closing Date, (ii) 6 Escrow Shares, and (iii) 92 Earnout Shares.
(47) Benjamin Chen is the Chief Executive Officer and the sole proprietor of Ignatius Transaction Partners and in such capacity has the right to vote and dispose of the securities held by such entity. The address of Ignatius Transaction Partners is 2711 Parkside Drive, Fremont, CA 94536.
(48) Consists of 34,615 Earnout Shares.
| -9- |
The following is a summary description of the material terms of our common stock as provided in our (i) Articles of Incorporation, as amended (“Articles of Incorporation”), and (ii) Amended and Restated Bylaws (“Bylaws”), copies of which are incorporated by reference as exhibits to the registration statement of which this prospectus forms a part. The following discussion is only a summary and may not contain all the information that is important to you or that you should consider before investing in our stock, and is qualified in its entirety by reference to the complete text of the Articles of Incorporation and Bylaws. For a more detailed description of these securities, you should read the applicable provisions of California law, our Articles of Incorporation, our Bylaws and the reports that we file with the SEC, which are incorporated herein by reference.
General
Our Articles of Incorporation currently authorizes the issuance of up to 150,000,000 shares of common stock, no par value, and up to 5,000,000 shares of preferred stock, no par value.
Common Stock
As of July 23, 2020, there were 67,250,639 shares of common stock issued and outstanding and 259 shareholders of record. The actual number of holders of our common stock is greater than this number of record holders, and includes shareholders who are beneficial owners, but whose shares are held in street name by brokers or held by other nominees.
Each holder of record of common stock is entitled to one vote for each outstanding share owned, on every matter properly submitted to the shareholders for their vote.
Subject to any dividend rights of holders of any of the preferred stock that we may issue from time to time, holders of common stock are entitled to any dividend declared by our board of directors out of funds legally available for that purpose.
Subject to the prior payment of any liquidation preference to holders of any preferred stock that we may issue from time to time, holders of common stock are entitled to receive on a pro rata basis all of our remaining assets available for distribution to the holders of common stock in the event of the liquidation, dissolution, or winding up of our operations. Holders of our common stock do not have any preemptive, subscription, or redemption rights.
Preferred Stock
Under the Articles of Incorporation, our board of directors has the authority, without action by the Company’s shareholders, to designate and issue up to 5,000,000 shares of preferred stock in one or more series and to designate the rights, preferences, and limitations of all such series, any or all of which may be superior to the rights of our common stock. It is not possible to state the actual effect of the issuance of any shares of our preferred stock upon the rights of the holders of our common stock until our board of directors determines the specific rights of the holders of our preferred stock. However, effects of the issuance of our preferred stock may include restricting dividends on our common stock, diluting the voting power of our common stock, impairing the liquidation rights of our common stock, and making it more difficult for a third party to acquire us, which could have the effect of discouraging or preventing a third party from acquiring, or deterring a third party from paying a premium to acquire, all or a majority of our outstanding voting stock. There are no shares of preferred stock presently outstanding and we have no present plan, arrangement, or commitment to issue any preferred stock.
Listing
Our common stock is listed on the NYSE American under the symbol “OCX.”
| -10- |
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC, 6201 15th Avenue, Brooklyn, New York 11219.
Anti-Takeover Provisions of California Law, the Articles of Incorporation, and the Bylaws
Our Articles of Incorporation and Bylaws contain provisions that may make it difficult for a third party to acquire us, or for a change in the composition of our board of directors or management to occur, and may delay or prevent a change in control of our Company or changes in our management, including provisions that:
| ● | authorize “blank check” preferred stock, which could be issued without shareholder approval and could have voting, liquidation, dividend, and other rights superior to our common stock; | |
| ● | establish an advance notice procedure with regard to nominations by shareholders of individuals for election to our board of directors; | |
| ● | provide that vacancies on our board of directors, other than vacancies created by removal of a director, may be filled by (i) the unanimous written consent of the directors then in office, (ii) the affirmative vote of a majority of the directors then in office at a meeting, or (iii) a sole remaining director; and | |
| ● | provide that special meetings of shareholders may be called at any time only by the board of directors, the Chair of the board, the President, or by shareholders of record entitled to cast not less than 10% of the votes at such meeting on the record date. |
These provisions, alone or together, could discourage a party from acquiring, or make it more difficult for a party to acquire, control of us, or delay or prevent hostile takeovers and changes in control or changes in our management.
In addition, Section 1203 of the California General Corporation Law (the “CGCL”) includes provisions that may have the effect of deterring hostile takeovers or delaying or preventing changes in control or management of the Company. First, if an “interested party” makes an offer to purchase the shares of some or all of the Company’s shareholders or makes a written proposal for approval of a merger, exchange or other reorganization or for a sale of all or substantially all of the Company’s assets, an affirmative opinion must be delivered in writing to the board or each shareholder, as the case may be, as to the fairness of the consideration to be received by the shareholders prior to completing the transaction. California law considers a person to be an “interested party” if the person directly or indirectly controls the Company, if the person is directly or indirectly controlled by one of the Company’s officers or directors, or if the person is an entity in which one of the Company’s officers or directors holds a material financial interest. If after receiving an offer from such an “interested party” the Company or its shareholders receives a subsequent offer from a neutral third party within the time prescribed by Section 1203, then the shareholders must be notified of this offer and afforded the opportunity to withdraw their tender or consent to the “interested party” offer. Section 1203 could make it more difficult for a third party to acquire a majority of the Company’s outstanding voting stock, by discouraging a hostile bid, or delaying, preventing or deterring a merger, acquisition or tender offer in which the Company’s shareholders could receive a premium for their shares, or effect a proxy contest for control of the Company or other changes in its management.
The selling shareholders may, from time to time, sell, transfer, or otherwise dispose of any or all of their Resale Shares on any stock exchange, market, or trading facility on which the shares are traded, or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.
| -11- |
The selling shareholders may use any one or more of the following methods when disposing of shares or interests therein:
| ● | disposition on any national securities exchange on which our common stock may be listed at the time of the sale; | |
| ● | disposition in the over-the-counter markets; | |
| ● | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; | |
| ● | block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction; | |
| ● | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; | |
| ● | an exchange distribution in accordance with the rules of the applicable exchange; | |
| ● | privately negotiated transactions; | |
| ● | short sales; | |
| ● | writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; | |
| ● | disposition in one or more underwritten offerings in a best efforts basis or firm commitment basis; | |
| ● | broker-dealers may agree with the selling shareholders to sell a specified number of such shares at a stipulated price per share; | |
| ● | a combination of any such methods of sale; or | |
| ● | any other method permitted by applicable law. |
We do not know of specific arrangements by the selling shareholders for the sale of their Resale Shares. The aggregate proceeds to the selling shareholders from any sale of the Resale Shares offered by them will be the purchase price of the Resale Shares less discounts or commissions, if any. The selling shareholders reserve the right to accept and, together with their respective agents from time to time, to reject, in whole or in part, any proposed purchase of Resale Shares to be made directly or through agents. We will not receive any of the proceeds from any such sale.
The selling shareholders also may resell all or a portion of the Resale Shares in open market transactions in reliance upon Rule 144 promulgated under the Securities Act, provided that they meet the criteria and conform to the requirements of that rule.
The selling shareholders and any broker-dealers or agents that participate in the sale of the Resale Shares may be deemed to be “underwriters” within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of the shares may be underwriting discounts and commissions under the Securities Act. The selling shareholders are subject to the prospectus delivery requirements of the Securities Act.
The selling shareholders will bear all commissions and discounts, if any, attributable to the sale or disposition of the Resale Shares, or interests therein. We will bear all costs, expenses, and fees in connection with the registration of the Resale Shares. We will not be paying any underwriting discounts or commissions in this offering.
The validity of the issuance of the securities offered hereby will be passed upon for us by Sheppard, Mullin, Richter & Hampton LLP, San Diego, California. Additional legal matters may be passed upon for us or any underwriters, dealers, or agents by counsel that we will name in the applicable prospectus supplement.
| -12- |
The balance sheets of Oncocyte Corporation as of December 31, 2019 and 2018, and the related statements of operations, comprehensive loss, shareholders’ equity, and cash flows for each of the two years in the period ended December 31, 2019, have been incorporated by reference into this prospectus and the registration statement in reliance on the report of OUM & Co. LLP, an independent registered public accounting firm, upon the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We are a reporting company and file annual, quarterly and current reports, proxy statements and other information with the SEC. We have filed with the SEC a registration statement on Form S-3 under the Securities Act with respect to the sale, from time to time, of the Resale Shares held by the selling shareholders named in this prospectus and any applicable prospectus supplement.
This prospectus does not contain all of the information set forth in the registration statement and the exhibits to the registration statement. For further information with respect to us and the securities being offered under this prospectus, we refer you to the registration statement and the exhibits and schedules filed as a part of the registration statement.
You may read and copy the registration statement, as well as our reports, proxy statements and other information, on the SEC’s website at http://www.sec.gov. You can also obtain copies of materials we file with the SEC from our website found at www.oncocyte.com. Information on our website does not constitute a part of, nor is it incorporated in any way, into this prospectus. and should not be relied upon in connection with making an investment decision.
| -13- |
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to “incorporate by reference” information into this prospectus, which means that we can disclose important information to you by referring you to another document filed separately with the SEC. The documents incorporated by reference into this prospectus contain important information that you should read about us.
The following documents are incorporated by reference into this prospectus and any applicable prospectus supplement:
| ● | our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on March 26, 2020, as amended on April 28, 2020; | |
| ● | our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2020 and June 30, 2020, filed with the SEC on May 12, 2020 and July 29, 2020, respectively; | |
| ● | our Current Reports on Form 8-K and 8-K/A, filed with the SEC on January 6, 2020; January 10, 2020; February 5, 2020; February 14, 2020; March 6, 2020; March 17, 2020; March 20, 2020; March 25, 2020; April 28, 2020; April 29, 2020; May 12, 2020; June 17, 2020; June 19, 2020; and July 1, 2020; | |
| ● | our definitive Proxy Statement on Schedule 14A, filed with the SEC on May 26, 2020; and | |
| ● | the description of our common stock included in our registration statement on Form 10, as filed with the SEC on November 23, 2015 and amended on December 21, 2015 and December 29, 2015, including any amendment or report (or exhibit to any such amendment or report) filed for the purpose of updating that description. |
All documents subsequently filed by us (other than current reports furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits filed on such form that are related to such items unless such Form 8-K expressly provides to the contrary) with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, including those made after the date of the initial filing of the registration statement of which this prospectus forms a part and prior to effectiveness of such registration statement, until we file a post-effective amendment that indicates the termination of the offering of the Resale Shares made by this prospectus are deemed to be incorporated by reference into this prospectus. Such future filings will become a part of this prospectus from the respective dates that such documents are filed with the SEC.
Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes hereof to the extent that such statement contained herein or in any other subsequently filed document, which is also incorporated or deemed to be incorporated herein, modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
The documents incorporated by reference into this prospectus are also available on our corporate website at www.oncocyte.com under the heading “Investors.” Information contained on, or that can be accessed through, our website is not part of this prospectus, and you should not consider information on our website to be part of this prospectus or any prospectus supplement unless specifically incorporated herein by reference. We will provide to each person, including any beneficial owner, to whom a prospectus is delivered a copy of any or all of the documents incorporated by reference in this prospectus and any prospectus supplement free of charge upon request for such documents in writing or by telephone at the following address:
Oncocyte Corporation
15 Cushing
Irvine, California 92618
Attn: Albert P. Parker
Telephone: (949) 409-7600
Email: aparker@oncocyte.com
| -14- |
6,497,898 SHARES OF COMMON STOCK
PROSPECTUS
We have not authorized any dealer, salesperson, or other person to give you written information other than this prospectus or to make representations as to matters not stated in this prospectus. You must not rely on unauthorized information. This prospectus is not an offer to sell these securities or our solicitation of your offer to buy these securities in any jurisdiction where that would not be permitted or legal. Neither the delivery of this prospectus nor any sales made hereunder after the date of this prospectus shall create an implication that the information contained herein or the affairs of the Company have not changed since the date of this prospectus.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
| Item 14. | Other Expenses of Issuance and Distribution. |
The following table sets forth an estimate of the fees and expenses relating to the issuance and distribution of the securities being registered hereby, other than underwriting discounts and commissions, all of which shall be borne by the selling shareholders. All of such fees and expenses, except for the SEC Registration Fee, are estimated:
| SEC registration fee | $ | 1,126 | ||
| Transfer agent’s fees and expenses | $ | * | ||
| Legal fees and expenses | $ | * | ||
| Printing fees and expenses | $ | * | ||
| Accounting fees and expenses | $ | * | ||
| Miscellaneous fees and expenses | $ | * | ||
| Total | $ | * | ||
| * | These fees and expenses depend on the securities offered and number of issuances and, accordingly, cannot be estimated at this time and will be reflected in the applicable prospectus supplement. |
| Item 15. | Indemnification of Officers and Directors. |
Section 317 of the CGCL authorizes a corporation to indemnify, subject to certain exceptions, any person who was or is a party or is threatened to be made a party to any proceeding (other than an action by or in the right of the corporation to procure a judgment in its favor) by reason of the fact that such person is or was an agent of the corporation, as the term “agent” is defined in section 317(a) of the CGCL, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with the proceeding if that person acted in good faith and in a manner the person reasonably believed to be in the best interests of the corporation and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of the person was unlawful. A corporation is further authorized to indemnify, subject to certain exceptions, any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was an agent of the corporation, against expenses actually and reasonably incurred by that person in connection with the defense or settlement of the action if the person acted in good faith, in a manner the person believed to be in the best interests of the corporation and its shareholders.
Section 204 of the CGCL provides that a corporation’s articles of incorporation may include provisions eliminating or limiting the personal liability of a director for monetary damages in an action brought by or in the right of the corporation for breach of a director’s duties to the corporation and its shareholders, provided, however that they shall not limit the liability of directors (i) for acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (ii) for acts or omissions that a director believes to be contrary to the best interests of the corporation or its shareholders or that involve the absence of good faith on the part of the director, (iii) for any transaction from which a director derived an improper personal benefit, (iv) for acts or omissions that show a reckless disregard for the director’s duty to the corporation or its shareholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director’s duties, of a risk of a serious injury to the corporation or its shareholders, (v) for acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director’s duty to the corporation or its shareholders, (vi) under Section 310 of the CGCL (concerning transactions between corporations and directors or corporations having interrelated directors) or (vii) under Section 316 of the CGCL (concerning directors’ liability for distributions, loans, and guarantees).
Section 204 further provides that a corporation’s articles of incorporation may not limit the liability of directors for any act or omission occurring prior to the date when the provision became effective or any act or omission as an officer, notwithstanding that the officer is also a director or that his or her actions, if negligent or improper, have been ratified by the directors.
| II-1 |
Further, Section 317 has no effect on claims arising under federal or state securities laws and does not affect the availability of injunctions and other equitable remedies available to a corporation’s shareholders for any violation of a director’s fiduciary duty to the corporation or its shareholders.
The Company’s Articles of Incorporation provide that the liability of the directors of the Company for monetary damages shall be eliminated to the fullest extent permissible under California law and that the Company is authorized to indemnify “agents”, as such term is defined in Section 317 of the California Corporations Code, to the fullest extent permissible under California law.
Furthermore, the Company’s Bylaws provide that the Company shall, to the maximum extent and in the manner permitted by the CGCL, indemnify each of its directors and officers against expenses (as defined in Section 317(a) of the CGCL) judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any the proceeding (as defined in Section 317(a) of the CGCL) arising by reason of the fact that such person is or was an agent (as defined in Section 317(a) of the CGCL) of the Company. Furthermore, the Company’s Bylaws provide that the Company shall, have the power, to the extent and in the manner permitted by the CGCL, to indemnify each of its employees and agents (other than directors and officers) against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding, arising by reason of the fact that such person is or was an employee or agent of the Company. The Bylaws further provide that expenses incurred in defending any proceeding may be advanced by the Company prior to the final disposition of such proceeding upon receipt of an undertaking by or on behalf of the indemnified party to repay such amount if it shall be determined ultimately that such person is not entitled to be indemnified as authorized in the Bylaws. The Bylaws also permit the Company to purchase and maintain insurance on behalf of any agent against any liability asserted against or incurred by the agent in that capacity or arising out of the agent’s status as such whether or not the Company would have the power to indemnify the agent under Section 317 of the CGCL.
Further, the Company maintains directors’ and officers’ liability insurance coverage.
The foregoing summary is subject to the complete text of the applicable statutes, the Articles of Incorporation and Bylaws, and is qualified in its entirety by reference to such documents.
| Item 16. | Exhibits. |
| a) | Exhibits. |
| * | Filed herewith. |
| II-2 |
| Item 17. | Undertakings. |
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
| (i) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; | |
| (ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and | |
| (iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
Provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(A) each prospectus filed pursuant to Rule 424(b)(3) as part of a registration statement as of the date the filed prospectus was deemed part of and included in the registration statement.
(B) each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(5) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(6) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
| II-3 |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Irvine, State of California, on July 30, 2020.
| ONCOCYTE CORPORATION | ||
| By: | /s/ Mitchell Levine | |
Mitchell Levine Chief Financial Officer and Treasurer (Principal Financial Officer) | ||
KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints Mitchell Levine, his/her true and lawful attorney-in-fact and agent with full power of substitution and re-substitution, for him/her and in his/her name, place and stead, in any and all capacities to sign any or all amendments (including, without limitation, post-effective amendments) to this Registration Statement, any related Registration Statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and any or all pre- or post-effective amendments thereto, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming that said attorney-in-fact and agent, or any substitute or substitutes for him, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated
| Signature | Title | Date | ||
| /s/ Ronald Andrews | Chief Executive Officer, President and Director | July 30, 2020 | ||
| Ronald Andrews | (Principal Executive Officer) | |||
| /s/ Mitchell Levine | Chief Financial Officer and Treasurer | July 30, 2020 | ||
| Mitchell Levine | (Principal Financial Officer) | |||
| /s/ Tony Kalajian | Sr. Vice President, Chief Accounting Officer | July 30, 2020 | ||
| Tony Kalajian | (Principal Accounting Officer) | |||
| /s/ Andrew Arno | Director | July 30, 2020 | ||
| Andrew Arno | ||||
| /s/ Melinda Griffith | Director | July 30, 2020 | ||
| Melinda Griffith | ||||
| /s/ Alfred D. Kingsley | Director | July 30, 2020 | ||
| Alfred D. Kingsley | ||||
| /s/ Andrew Last | Director | July 30, 2020 | ||
| Andrew Last | ||||
| /s/ Cavan Redmond | Director | July 30, 2020 | ||
| Cavan Redmond |
| II-4 |
Exhibit 5.1
 |
Sheppard, Mullin, Richter & Hampton LLP 30 Rockefeller Plaza New York, New York 10112-0015 212.653.8700 main 212.653.8701 fax www.sheppardmullin.com |
July 30, 2020
VIA EDGAR
Oncocyte Corporation
15 Cushing
Irvine, California 92618
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as special counsel to Oncocyte Corporation, a California corporation (the “Company”), in connection with the issuance of this opinion that relates to a Registration Statement on Form S-3 (the “Registration Statement”) filed by the Company with the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”). The Registration Statement covers the resale, by the selling stockholders listed therein, from time to time pursuant to Rule 415 under the Securities Act as set forth in the Registration Statement, of 6,497,898 shares (the “Shares”) of the Company’s common stock, no par value (the “Common Stock”) which consist of (i) 1,685,807 shares of Common Stock delivered to the selling shareholders pursuant to the Agreement (as defined below), (ii) 229,869 shares (the “Escrow Shares”) of Common Stock currently held in escrow that may be delivered to the selling shareholders after adjustments for fractional shares following December 31, 2020, the indemnity holdback release date and (iii) 4,582,222 shares (the “Earnout Shares”) of Common Stock that may become issuable to the selling shareholders upon the achievement of certain revenues or milestones set forth in the Agreement and Plan of Merger among the Company, Cancer Dx Sub, Inc., Insight Genetics, Inc., the shareholders party thereto, and Paul A. Dahlhauser, as the equityholder representative, dated as of January 10, 2020 (the “Agreement”).
This opinion letter is being delivered in accordance with the requirements of Item 601(b)(5)(i) of Regulation S-K under the Securities Act, and no opinion is expressed herein as to any matter pertaining to the contents of the Registration Statement.
In connection with the issuance of this opinion letter, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company and such agreements, certificates and receipts of public officials, certificates of officers or other representatives of the Company and others, and such other documents as we have deemed necessary or appropriate as a basis for the opinions stated below. As to any facts relevant to the opinions stated herein that we did not independently establish or verify, we have relied upon statements and representations of officers and other representatives of the Company and of public officials.
In our examination, we have assumed (a) the genuineness of all signatures, including endorsements, (b) the legal capacity and competency of all natural persons, (c) the authenticity of all documents submitted to us as originals, (d) the conformity to original documents of all documents submitted to us as facsimile, electronic, certified or photostatic copies, and the authenticity of the originals of such copies; and (e) the accuracy, completeness and authenticity of certificates of public officials.
Further, we have assumed with respect to any Earnout Shares, that: (i) the Earnout Shares will be issued only upon the achievement of all applicable revenues and milestones set forth in the Agreement, (ii) at the time of the issuance of the Earnout Shares the Company will continue to be validly existing and in good standing under the laws of its jurisdiction of organization, with the requisite corporate power and authority to issue the Earnout Shares, and (iii) that the issuance of the Earnout Shares at the time of issuance will be in conformity with the Company’s then operative articles of incorporation and bylaws and will not result in a default under or breach of any applicable requirement or restriction imposed by any court or governmental body having jurisdiction over the Company or its property or assets.
Based upon the foregoing and subject to the qualifications and assumptions stated herein, we are of the opinion that:
1. The Shares have been duly authorized by all requisite corporate action on the part of the Company under the California General Corporation Law (the “CGCL”) and are validly issued, fully paid, and non-assessable.
2. The Escrow Shares have been duly authorized by all requisite corporate action on the part of the Company under the CGCL and, when delivered in accordance with the Agreement, will be validly issued, fully paid, and non-assessable.
3. The Earnout Shares have been duly authorized by all requisite corporate action on the part of the Company under the CGCL and, when issued and delivered in accordance with the Agreement, will be validly issued, fully paid, and non-assessable.
Our opinion is expressly limited to the matters set forth above, and we render no opinion, whether by implication or otherwise, as to any other matters relating to the Company, the Shares, the Escrow Shares, the Earnout Shares, the Agreement, or any other agreements or transactions that may be related thereto or contemplated thereby. We are expressing no opinion as to any obligations that parties other than the Company may have under or in respect of the Shares, the Escrow Shares or the Earnout Shares, or as to the effect that their performance of such obligations may have upon any of the matters referred to above. No opinion may be implied or inferred beyond the opinion expressly stated above.
The opinion we render herein is limited to those matters governed by the CGCL as of the date hereof and we disclaim any obligation to revise or supplement the opinion rendered herein should the above-referenced laws be changed by legislative or regulatory action, judicial decision, or otherwise. We express no opinion as to whether, or the extent to which, the laws of any particular jurisdiction apply to the subject matter hereof.
This opinion letter is rendered as of the date first written above, and we disclaim any obligation to advise you of facts, circumstances, events, or developments that hereafter may be brought to our attention or that may alter, affect, or modify the opinion expressed herein.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. We also hereby consent to the reference to our firm under the heading “Legal Matters” in the Registration Statement. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the General Rules and Regulations under the Securities Act. It is understood that this opinion is to be used only in connection with the offer and sale of the Shares, the Escrow Shares and the Earnout Sharesbeing registered while the Registration Statement is effective under the Securities Act.
Respectfully submitted,
/s/ Sheppard, Mullin, Richter & Hampton LLP
SHEPPARD, MULLIN, RICHTER & HAMPTON llp
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference, in the Prospectus constituting a part of this Registration Statement on Form S-3, of our report dated March 25, 2020 relating to the financial statements of OncoCyte Corporation appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
We also consent to the reference to us under the caption “Experts” in the Prospectus.
| /s/ OUM & CO. LLP | |
| San Francisco, California | |
| July 30, 2020 |