UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (date of earliest event reported): September 28, 2020

 

OncoCyte Corporation

(Exact name of registrant as specified in its charter)

 

California   1-37648   27-1041563
(State or other jurisdiction   (Commission   (IRS Employer
of incorporation)   File Number)   Identification No.)

 

15 Cushing

Irvine, California 92618

(Address of principal executive offices)

 

(949) 409-7600

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Exchange Act:

 

Title of each class   Trading Symbol   Name of each exchange on which registered
Common Stock, no par value   OCX   NYSE American

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

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 13(a) of the Exchange Act. ☒

 

 

 

 

 

 

Forward-Looking Statements

 

Any statements that are not historical fact (including, but not limited to statements that contain words such as “may,” “will,” “believes,” “plans,” “intends,” “anticipates,” “expects,” “estimates”) should also be considered to be forward-looking statements. Additional factors that could cause actual results to differ materially from the results anticipated in these forward-looking statements are contained in OncoCyte Corporation’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) under the heading “Risk Factors” and in other filings that Oncocyte may make with the SEC. Undue reliance should not be placed on these forward-looking statements which speak only as of the date they are made, and the facts and assumptions underlying these statements may change. Except as required by law, Oncocyte disclaims any intent or obligation to update these forward-looking statements.

 

References to “Oncocyte,” “we,” “us,” and “our” are references to OncoCyte Corporation.

 

Item 1.01 - Entry Into a Material Definitive Agreement

 

The information reported in Item 5.02 is incorporated by reference into this Item 1.01.

 

Item 5.02 - Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On September 28, 2020, the full-time employment of Albert Parker, our Chief Operating Officer and Secretary, Tony Kalajian, our Chief Accounting Officer, and Lyndal Hesterberg, our Chief Scientific Officer, was terminated as part of a cost savings plan, and Mr. Parker, Mr. Kalajian, and Dr. Hesterberg (each an “Executive”) accepted our offer to continue to serve temporarily in their current positions on a part-time “at will” basis under the terms of a Reduction in Salary Agreement. We anticipate that the part-time employment of each Executive will terminate on December 18, 2020 but either we or any Executive may determine to terminate his part-time employment on an earlier date.

 

During the period of part-time employment, the Executive will receive 50% of his regular bi-weekly salary and will remain eligible to participate in Oncocyte’s employee benefit plans and Equity Incentive Plan, but will no longer accrue paid time off. The Executive’s salary deferral under the terms of his salary deferral agreement will end on September 28 and the Executive’s accrued deferred salary plus accrued interest will become payable on the earlier of the date provided in the Executive’s salary deferral agreement or the date of termination of the Executive’s employment.

 

The foregoing description of the terms of each Executive’s Reduction in Salary Agreement is a summary only, does not purport to be complete, and is qualified by the full text of the applicable Reduction in Salary Agreement filed as an Exhibit to this Report.

 

Item 9.01 - Financial Statements and Exhibits.

 

Exhibit Number   Description
     
10.1   Reduction in Salary Agreement between OncoCyte Corporation and Albert Parker.
     
10.2   Reduction in Salary Agreement between OncoCyte Corporation and Lyndal Hesterberg
     
10.3   Reduction in Salary Agreement between OncoCyte Corporation and Tony Kalajian

 

2

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  ONCOCYTE CORPORATION
     
Date: September 28, 2020 By: /s/ Mitchell Levine
    Mitchell Levine
    Chief Financial Officer

 

3

 

 

 

Exhibit 10.1

 

 

September 23, 2020

 

Al Parker

722 Conestoga Road

Bryn Mawr, PA 19010

Email: alpesq@comcast.net

 

Re:       Reduction in Salary Agreement

 

Dear Al:

 

This will confirm our discussion on September 22, 2020, wherein you accepted a 50% salary reduction that has become necessary given Oncocyte Corporation’s (the “Company”) change in direction. Rather than terminating your employment, the Company has made reasonable efforts to maintain you employed on a part time rather than full time basis. This change will become effective on September 28, 2020 (“Effective Date”) and last no longer than December 18, 2020, when we anticipate your employment will be terminated. The specific terms of this Reduction in Salary Agreement (“Agreement”) are as follows:

 

1.       Compensation. Your reduced bi-weekly rate of pay will be $6,956.86 ($180,878.36 annual equivalent) less applicable tax and payroll deductions, payable in accordance with the Company’s payroll practices. The Company expects that you will continue to devote your best efforts, skills and abilities while working for the Company. The Company may change your job title, description, and duties in its sole discretion.

 

2.       Paid Time Off. You will not accrue paid time off (“PTO”) for the duration of this Agreement. You will have the option to supplement your compensation with any accrued but unused paid time off (“PTO”) that you have earned up to the Effective Date of this Agreement. Any accrued PTO will be paid at your full time pay rate. In the event that you do not use all of your accrued PTO, the Company will pay you for any remaining accrued but unused PTO at the end of your employment.

 

3.       Deferred Compensation. Up to and including the Effective Date of this Agreement, the Company will agree to pay you the Deferred Compensation that you have earned as described in the May 7, 2020 Acknowledgement and Agreement. You have agreed that you will not continue to earn Deferred Compensation after the Effective Date of this Agreement. You agree that the May 7, 2020 Acknowledgement and Agreement shall be amended to replace the December 4, 2020 end date with the Effective Date of this Agreement. The Deferred Compensation shall be payable pursuant to the terms provided in Paragraph 4 of the May 7, 2020 Acknowledgement and Agreement or at the time your employment with the Company is terminated (either by you or the Company), whichever is earlier. All other terms of the May 7, 2020 Acknowledgement and Agreement shall remain the same.

 

 

 

 

4.       Incentive Stock Options. You will continue to participate in the Company’s Equity Incentive Plan as detailed in your Employment Agreement.

 

5.       Benefits. You will remain eligible to participate in the Company’s Health and Welfare benefit plans for the duration of this Agreement.

 

6.       Confidentiality & Work Product. Your confidentiality obligations to the Company will remain the same. The Confidentiality and Inventions Assignment Agreement that you executed with the Company shall remain in full force and effect, including but not limited to your obligations not to disparage the Company.

 

7.       At-Will Employment. Your employment with the Company is and shall continue to be at-will and may be terminated at any time by either you or the Company with or without cause or advance notice. The anticipated end date of this Agreement is not a guarantee of employment for any specified term.

 

8.       Modification. The Company reserves the right to change or otherwise modify, in its sole discretion, the preceding terms of employment, as well as any of the terms set forth herein at any time in the future.

 

9.       Entire Agreement. This offer letter and the documents referred to herein constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede any and all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.

 

10.       Acceptance. Please confirm your acceptance of this Agreement by signing this letter in the space indicated. Your signature will acknowledge that you have read, understood and agreed to the terms and conditions of this offer letter.

 

We appreciate all of your hard work, and we know we will have your support as we all strive for continued business success.

 

If you have any questions about this information, please feel free to contact me.

 

  Sincerely,
   
  /s/ Ronnie Andrews
  Ronnie Andrews
  President & CEO

 

 

 

 

I have read and understood this offer letter and hereby acknowledge, accept and agree to the terms as set forth above and further acknowledge that no other commitments were made to me as part of my employment offer except as specifically set forth herein.

 

/s/Albert Parker    
Signed    
     
Albert Parker    
Name   Date Signed

 

 

 

 

 

Exhibit 10.2

 

 

September 23, 2020

 

Lyndal Hesterberg

2526 Logan Drive

Loveland, CO 80538

Email: Hesterberg.Lyndal@gmail.com

 

  Re: Reduction in Salary Agreement

 

Dear Lyndal:

 

This will confirm our discussion on September 22, 2020, wherein you accepted a 50% salary reduction that has become necessary given Oncocyte Corporation’s (the “Company”) change in direction. Rather than terminating your employment, the Company has made reasonable efforts to maintain you employed on a part time rather than full time basis. This change will become effective on September 28, 2020 (“Effective Date”) and last no longer than December 18, 2020, when we anticipate your employment will be terminated. The specific terms of this Reduction in Salary Agreement (“Agreement”) are as follows:

 

1. Compensation. Your reduced bi-weekly rate of pay will be $6678.46 ($173,639.96 annualized) less applicable tax and payroll deductions, payable in accordance with the Company’s payroll practices. The Company expects that you will continue to devote your best efforts, skills and abilities while working for the Company. The Company may change your job title, description, and duties in its sole discretion.

 

2. Paid Time Off. You will not accrue paid time off (“PTO”) for the duration of this Agreement. You will have the option to supplement your compensation with any accrued but unused paid time off (“PTO”) that you have earned up to the Effective Date of this Agreement. Any accrued PTO will be paid at your full time pay rate. In the event that you do not use all of your accrued PTO, the Company will pay you for any remaining accrued but unused PTO at the end of your employment.

 

3. Deferred Compensation. Up to and including the Effective Date of this Agreement, the Company will agree to pay you the Deferred Compensation that you have earned as described in the May 7, 2020 Acknowledgement and Agreement. You have agreed that you will not continue to earn Deferred Compensation after the Effective Date of this Agreement. You agree that the May 7, 2020 Acknowledgement and Agreement shall be amended to replace the December 4, 2020 end date with the Effective Date of this Agreement. The Deferred Compensation shall be payable pursuant to the terms provided in Paragraph 4 of the May 7, 2020 Acknowledgement and Agreement or at the time your employment with the Company is terminated (either by you or the Company), whichever is earlier. All other terms of the May 7, 2020 Acknowledgement and Agreement shall remain the same.

 

 

 

 

4. Incentive Stock Options. You will continue to participate in the Company’s Equity Incentive Plan as detailed in your Employment Agreement.

 

5. Benefits. You will remain eligible to participate in the Company’s Health and Welfare benefit plans for the duration of this Agreement.

 

6. Confidentiality & Work Product. Your confidentiality obligations to the Company will remain the same. The Confidentiality and Inventions Assignment Agreement that you executed with the Company shall remain in full force and effect, including but not limited to your obligations not to disparage the Company.

 

7. At-Will Employment. Your employment with the Company is and shall continue to be at-will and may be terminated at any time by either you or the Company with or without cause or advance notice. The anticipated end date of this Agreement is not a guarantee of employment for any specified term.

 

8. Modification. The Company reserves the right to change or otherwise modify, in its sole discretion, the preceding terms of employment, as well as any of the terms set forth herein at any time in the future.

 

9. Entire Agreement. This offer letter and the documents referred to herein constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede any and all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.

 

10. Acceptance. Please confirm your acceptance of this Agreement by signing this letter in the space indicated. Your signature will acknowledge that you have read, understood and agreed to the terms and conditions of this offer letter.

 

We appreciate all of your hard work, and we know we will have your support as we all strive for continued business success.

 

If you have any questions about this information, please feel free to contact me.

 

  Sincerely,
   
  /s/ Ronnie Andrews
   
  Ronnie Andrews
  President & CEO

 

 

 

 

I have read and understood this offer letter and hereby acknowledge, accept and agree to the terms as set forth above and further acknowledge that no other commitments were made to me as part of my employment offer except as specifically set forth herein.

 

/s/ Lyndal Hesterberg    
Signed     
     
Lyndal Hesterberg    
Name   Date Signed

 

 

 

 

Exhibit 10.3

 

 

September 23, 2020

 

Tony Kalajian

18755 Big Cedar Drive

Santa Clarita, CA 91387

Email: t.kalajian@yahoo.com

 

  Re: Reduction in Salary Agreement

 

Dear Tony:

 

This will confirm our discussion on September 22, 2020, wherein you accepted a 50% salary reduction that has become necessary given Oncocyte Corporation’s (the “Company”) change in direction. Rather than terminating your employment, the Company has made reasonable efforts to maintain you employed on a part time rather than full time basis. This change will become effective on September 28, 2020 (“Effective Date”) and last no longer than December 18, 2020, when we anticipate your employment will be terminated. The specific terms of this Reduction in Salary Agreement (“Agreement”) are as follows:

 

1. Compensation. Your reduced bi-weekly rate of pay will be $6,437.50 ($167,375.04 annualized) less applicable tax and payroll deductions, payable in accordance with the Company’s payroll practices. The Company expects that you will continue to devote your best efforts, skills and abilities while working for the Company. The Company may change your job title, description, and duties in its sole discretion.

 

2. Paid Time Off. You will not accrue paid time off (“PTO”) for the duration of this Agreement. You will have the option to supplement your compensation with any accrued but unused paid time off (“PTO”) that you have earned up to the Effective Date of this Agreement. Any accrued PTO will be paid at your full time pay rate. In the event that you do not use all of your accrued PTO, the Company will pay you for any remaining accrued but unused PTO at the end of your employment.

 

3. Deferred Compensation. Up to and including the Effective Date of this Agreement, the Company will agree to pay you the Deferred Compensation that you have earned as described in the May 7, 2020 Acknowledgement and Agreement. You have agreed that you will not continue to earn Deferred Compensation after the Effective Date of this Agreement. You agree that the May 7, 2020 Acknowledgement and Agreement shall be amended to replace the December 4, 2020 end date with the Effective Date of this Agreement. The Deferred Compensation shall be payable pursuant to the terms provided in Paragraph 4 of the May 7, 2020 Acknowledgement and Agreement or at the time your employment with the Company is terminated (either by you or the Company), whichever is earlier. All other terms of the May 7, 2020 Acknowledgement and Agreement shall remain the same.

 

 

 

 

4. Incentive Stock Options. You will continue to participate in the Company’s Equity Incentive Plan as detailed in your Employment Agreement.

 

5. Benefits. You will remain eligible to participate in the Company’s Health and Welfare benefit plans for the duration of this Agreement.

 

6. Confidentiality & Work Product. Your confidentiality obligations to the Company will remain the same. The Confidentiality and Inventions Assignment Agreement that you executed with the Company shall remain in full force and effect, including but not limited to your obligations not to disparage the Company.

 

7. At-Will Employment. Your employment with the Company is and shall continue to be at-will and may be terminated at any time by either you or the Company with or without cause or advance notice. The anticipated end date of this Agreement is not a guarantee of employment for any specified term.

 

8. Modification. The Company reserves the right to change or otherwise modify, in its sole discretion, the preceding terms of employment, as well as any of the terms set forth herein at any time in the future.

 

9. Entire Agreement. This offer letter and the documents referred to herein constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede any and all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.

 

10. Acceptance. Please confirm your acceptance of this Agreement by signing this letter in the space indicated. Your signature will acknowledge that you have read, understood and agreed to the terms and conditions of this offer letter.

  

We appreciate all of your hard work, and we know we will have your support as we all strive for continued business success.

 

If you have any questions about this information, please feel free to contact me.

 

  Sincerely,
   
  /s/ Ronnie Andrews
   
  Ronnie Andrews
  President & CEO

 

 

 

 

I have read and understood this offer letter and hereby acknowledge, accept and agree to the terms as set forth above and further acknowledge that no other commitments were made to me as part of my employment offer except as specifically set forth herein.

 

/s/ Tony Kalajian  
Signed  

 

Tony Kalajian    
Name   Date Signed