Related Party Transactions
Facilities and Service Agreement
October 8, 2009, OncoCyte and BioTime executed a Shared Facilities and Services Agreement (“Shared Facilities Agreement”).
Under the terms of the Shared Facilities Agreement, BioTime will allow OncoCyte to use its premises and equipment located at Alameda,
California for the sole purpose of conducting business. BioTime will also provide accounting, billing, bookkeeping, payroll, treasury,
payment of accounts payable, and other similar administrative services to OncoCyte. BioTime may also provide the services of attorneys,
accountants, and other professionals who may also provide professional services to BioTime and its other subsidiaries. BioTime
will also provide OncoCyte with the services of its laboratory and research personnel, including BioTime employees and contractors,
for the performance of research and development work for OncoCyte at the premises.
charges OncoCyte a Use Fee for services received and usage of facilities, equipment, and supplies. For each billing period, BioTime
prorates and allocates costs incurred, as applicable, to OncoCyte, such costs include services of Bio Time employees, equipment,
insurance, lease, professional, software, supplies and utilities. Allocation depends on key cost drivers including actual documented
use, square footage of facilities used, time spent, costs incurred by or for OncoCyte, or upon proportionate usage by BioTime
and OncoCyte, as reasonably estimated by BioTime (collectively “Use Fees”). BioTime, at its discretion, has the right
to charge OncoCyte a 5% markup on such allocated costs although BioTime has not elected to charge this markup since the inception
of the Shared Facilities Agreement and through the end of 2015. Beginning in 2016, BioTime commenced charging the 5% markup. The
allocated cost of BioTime employees and contractors who provide services is based upon records maintained of the number of hours
of such personnel devoted to the performance of services.
Use Fee is determined and invoiced to OncoCyte on a quarterly basis for each calendar quarter of each calendar year. If the Shared
Facilities Agreement terminates prior to the last day of a billing period, the Use Fee will be determined for the number of days
in the billing period elapsed prior to the termination of the Shared Facilities Agreement. Each invoice will be payable in full
by OncoCyte within 30 days after receipt. Any invoice, or portion thereof, not paid in full when due will bear interest at the
rate of 15% per annum until paid, unless the failure to make a payment is due to any inaction or delay in making a payment by
BioTime employees from OncoCyte funds available for such purpose, rather than from the unavailability of sufficient funds legally
available for payment or from an act, omission, or delay by any employee or agent of OncoCyte. Through December 31, 2017 BioTime
has not charged OncoCyte any interest.
addition to the Use Fees, OncoCyte will reimburse BioTime for any out of pocket costs incurred by BioTime for the purchase of
office supplies, laboratory supplies, and other goods and materials and services for the account or use of OncoCyte, provided
that invoices documenting such costs are delivered to OncoCyte with each invoice for the Use Fee. Furthermore, BioTime will have
no obligation to purchase or acquire any office supplies or other goods and materials or any services for OncoCyte, and if any
such supplies, goods, materials or services are obtained for OncoCyte, BioTime may arrange for the suppliers thereof to invoice
Shared Facilities Agreement will remain in effect, unless either party gives the other party written notice stating that the Shared
Facilities Agreement will terminate on December 31 of that year, or unless the agreement otherwise is terminated under another
provision of the agreement.
the aggregate, BioTime allocated and charged such Use Fees to OncoCyte of $268,000, $790,000 and $595,000 included in general
and administrative expenses and Use Fees of $1.1 million, $691,000 and $565,000 included in research and development expenses,
during the years ended December 31, 2017, 2016 and 2015, respectively. Use Fees of $213,000 in sales and marketing expenses are
included in OncoCyte’s statements of operations during the year ended December 31, 2017. There were no Use Fees allocated
to sales and marketing expenses during 2016 and 2015.
of December 31, 2017 and 2016, OncoCyte had $2.1 million and $2.9 million outstanding and payable to BioTime and affiliates included
in current liabilities in connection with the costs incurred under the Shared Facilities Agreement. Since these amounts are due
and payable in 30 days of being invoiced, the payables are classified as current liabilities for all periods presented.
minimum fixed payments due under the Shared Facilities Agreement are approximately $131,000 per month.
Loan Payable to Silicon Valley Bank
February 21, 2017, OncoCyte entered into a Loan and Security Agreement (the “Loan Agreement”) with Silicon Valley
Bank (the “Bank”) pursuant to which OncoCyte borrowed $2.0 million on March 23, 2017. Payments of interest only on
the principal balance were due monthly from the draw date through October 31, 2017, and, beginning on November 1, 2017, monthly
payments of principal of approximately $67,000 plus interest are due and payable. The outstanding principal balance of the loan
bears interest at a stated floating annual interest rate equal to the greater of (i) three-quarters of one percent (0.75%) above
the prime rate or (ii) four and one-quarter percent (4.25%). As of December 31, 2017, the latest published prime rate plus 0.75%
was 5.25% per annum.