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<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 27pt; text-align: justify; text-indent: -27pt"><b>1. Organization,
Description of the Business and Liquidity</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">OncoCyte Corporation (“OncoCyte”)
is a developer of novel, non-invasive blood-based tests for the early detection of cancer. It is focused on developing molecular
cancer diagnostics utilizing a discovery platform that focuses on identifying genetic markers that are differentially expressed
in certain types of cancers. OncoCyte efforts have focused on developing diagnostic tests for use in detecting lung, bladder, and
breast cancers. OncoCyte is currently devoting substantially all of its efforts on developing its lung cancer diagnostic test DetermaVu™.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">OncoCyte was incorporated
in 2009 in the state of California and was formerly a majority-owned subsidiary of BioTime, Inc. (“BioTime”), a publicly
traded, clinical-stage, biotechnology company targeting degenerative diseases primarily in the fields of ophthalmology, aesthetics
and cell/drug delivery. Beginning on February 17, 2017, OncoCyte ceased to be a subsidiary of BioTime for financial reporting purposes
when BioTime’s percentage ownership of outstanding OncoCyte common stock declined below 50% as a result of the issuance of
additional OncoCyte common stock to certain investors who exercised OncoCyte stock purchase warrants (see Note 6).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Basis of presentation</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The unaudited condensed
interim financial statements presented herein, and discussed below, have been prepared on a stand-alone basis in accordance with
accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance
with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Commission (the “SEC”).
In accordance with those rules and regulations certain information and footnote disclosures normally included in comprehensive
financial statements have been condensed or omitted. The condensed balance sheet as of December 31, 2017 was derived from the audited
financial statements at that date, but does not include all the information and footnotes required by GAAP. These condensed financial
statements should be read in conjunction with the audited financial statements and notes thereto included in OncoCyte’s Annual
Report on Form 10-K, as amended, for the year ended December 31, 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The accompanying interim
condensed financial statements, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation of OncoCyte’s financial condition and results of operations. The condensed results of operations
are not necessarily indicative of the results to be expected for any other interim period or for the entire year.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"><font style="background-color: white">Prior
to February 17, 2017, BioTime consolidated the results of OncoCyte into BioTime’s consolidated results based on BioTime’s
ability to control OncoCyte’s operating and financial decisions and policies through its majority ownership of OncoCyte common
stock. Beginning on February 17, 2017, BioTime’s percentage ownership of the outstanding OncoCyte common stock declined below
50%, resulting in a loss of “control” of OncoCyte under GAAP and, as a result, BioTime deconsolidated OncoCyte’s
financial statements from BioTime’s consolidated financial statements. As a result of this deconsolidation, OncoCyte is no
longer considered a subsidiary of BioTime under GAAP with effect from February 17, 2017. OncoCyte remains an affiliate of BioTime
based on BioTime’s retained share ownership in OncoCyte, which is sufficient to allow BioTime to exert significant influence
over the operations and management of OncoCyte.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">To
the extent OncoCyte does not have its own office and laboratory facilities, employees, or human resources for its operations, BioTime
provides certain OncoCyte with use of its facilities and employees for administrative or operational services, as necessary, for
the benefit of OncoCyte under the terms of a Shared Facilities and Services Agreement (the “Shared Facilities Agreement”).
See Note 4. Accordingly, BioTime allocates expenses such as salaries and payroll related expenses incurred and paid on behalf of
OncoCyte based on the amount of time that particular employees devote to OncoCyte affairs. Other expenses such as legal, accounting,
human resources, marketing, travel, and entertainment expenses are allocated to OncoCyte to the extent that those expenses are
incurred by or on behalf of OncoCyte. BioTime also allocates certain overhead expenses such as facilities rent and utilities, property
taxes, insurance, internet and telephone expenses based on a percentage determined by management. Overhead allocations are made
based upon allocation drivers such as percentage of square feet of office or laboratory space used, and percentage of personnel
devoted to OncoCyte’s operations or management. See Note 2. Management evaluates the appropriateness of the percentage allocations
on a periodic basis and believes that this basis for allocation is reasonable.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">OncoCyte previously granted
stock options to employees of BioTime, or employees of other BioTime subsidiaries who perform services for OncoCyte, and OncoCyte
recorded stock-based compensation expense in the accompanying condensed statements of operations for the services performed in
the periods presented.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i>Liquidity</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"><font style="background-color: white">Since
inception, OncoCyte has financed its operations through the sale of common stock and warrants, warrant exercises, a bank loan,
and sales of BioTime common shares that it holds as marketable equity securities. BioTime also provided OncoCyte with the use of
BioTime facilities and services under a Shared Facilities Agreement as described in Note 4. OncoCyte has incurred operating losses
and negative cash flows since inception, and had an accumulated deficit of $59.3</font> million as March 31, 2018. OncoCyte expects
to continue to incur operating losses and negative cash flows for the near future<font style="background-color: white">.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">At
March 31, 2018, OncoCyte had $12.6 million of cash and cash equivalents and held BioTime common shares as marketable equity securities
valued at $950,000<font style="background-color: white">, and OncoCyte received an additional $2.0 million on May 10, 2018 from
a private placement of its common stock conducted in March 2018</font>. <font style="background-color: white">OncoCyte believes
that its current cash, cash equivalents and marketable equity securities is sufficient to carry out current operations through
at least twelve months from the issuance date of the financial statements included in this Report. OncoCyte has a plan to reduce cash expenditures while OncoCyte continues to devote substantially all of its research and development resources to the
completion of the development of DetermaVu™.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"><font style="background-color: white">As
part of this plan, OncoCyte will reduce staffing not required for the development or clinical validation of DetermaVu™. This
staff reduction will include a small number of research and development and sales and marketing employees and consultants, and
OncoCyte will offer sabbatical packages to some of its senior marketing and sales executives. OncoCyte’s Chief Executive
Officer and Chief Financial Officer are also expected to accept salary reductions as part of the plan although the amount and duration
of any such salary reductions have not yet been determined. </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"><font style="background-color: white">While
OncoCyte may determine to build its own integrated commercial organization if it successfully completes the development of
DetermaVu™, OncoCyte will need to raise additional capital for that purpose. OncoCyte may also explore a range of other commercialization
options in order to reduce capital needs and the risks associated with the timelines and uncertainty for attaining the Medicare
and commercial reimbursement approvals that will be essential for the successful commercialization of DetermaVu™ and any
other diagnostic tests that OncoCyte may develop. Those alternative arrangements could include </font>marketing arrangements with
other diagnostic companies through which <font style="background-color: white">OncoCyte</font> might receive a royalty on sales,
or through which <font style="background-color: white">it</font> might form a joint venture to market DetermaVu<font style="background-color: white">™
and share in net revenues</font>.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"><font style="background-color: white">Delays
in the development of DetermaVu™ could prevent OncoCyte from raising sufficient additional capital to finance the completion
of development and commercial launch of DetermaVu™ or other cancer diagnostic tests. Even if OncoCyte is successful
in completing the development of DetermaVu™, i</font>nvestors may be reluctant to provide <font style="background-color: white">OncoCyte
</font>with capital until <font style="background-color: white">DetermaVu™ is approved for reimbursement by </font>Medicare
or private payers<font style="background-color: white">. The unavailability or inadequacy of financing or revenues to meet future
capital needs could force OncoCyte to modify, curtail, delay, or suspend some or all aspects of planned operations. Sales of additional
equity securities could result in the dilution of the interests of its shareholders. OncoCyte cannot assure that adequate financing
will be available on favorable terms, if at all.</font></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 27pt; text-align: justify; text-indent: -27pt"><b>2. Summary
of Significant Accounting Policies</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"><i>Research and development expenses</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Research and development
expenses include both direct expenses incurred by OncoCyte and indirect overhead costs allocated by BioTime that benefit or support
OncoCyte’s research and development functions. Direct research and development expenses consist primarily of personnel costs
and related benefits, including stock-based compensation, outside consultants and suppliers. Indirect research and development
expenses allocated by BioTime to OncoCyte under the Shared Facilities Agreement (see Note 4), are primarily based on headcount
or space occupied, as applicable, and include laboratory supplies, laboratory expenses, rent and utilities, common area maintenance,
telecommunications, property taxes and insurance. Research and development costs are expensed as incurred.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>General
and administrative expenses</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">General and administrative
expenses include both direct expenses incurred by OncoCyte and indirect overhead costs allocated by BioTime that benefit or support
OncoCyte’s general and administrative functions. Direct general and administrative expenses consist primarily of compensation
and related benefits, including stock-based compensation, for executive and corporate personnel, and professional and consulting
fees. Indirect general and administrative expenses allocated by BioTime to OncoCyte under the Shared Facilities Agreement (see
Note 4) are primarily based on headcount or space occupied, as applicable, and include costs for financial reporting and compliance,
rent and utilities, common area maintenance, telecommunications, property taxes and insurance.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>Sales and
marketing expenses</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">Sales
and marketing expenses consist primarily of personnel costs and related benefits, including stock-based compensation, trade shows
and booths, branding and positioning, and outside consultants. Indirect sales and marketing expenses allocated by BioTime, primarily
based on OncoCyte’s headcount or space occupied, as applicable, include costs for rent and utilities, common area maintenance,
telecommunications, property taxes and insurance, incurred by BioTime and allocated to us under the Shared Facilities Agreement.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"><i>  </i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"><i>Accounting for BioTime shares</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">OncoCyte
accounts for the BioTime shares it holds as marketable equity securities in accordance with ASC 320-10-25, <i>Investments
– Debt and Equity Securities</i>, as amended by Accounting Standards Update (“ASU”) 2016-01, <i>Financial
Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities</i><font style="background-color: white">, </font>as
the shares have a readily determinable fair value quoted on the NYSE American and are held principally to meet future working capital
purposes, as necessary. The securities are measured at fair value and reported as current assets on the balance sheet based on
the closing trading price of the security as of the date being presented.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">Beginning
on January 1, 2018, with the adoption of ASU 2016-01 discussed below, these securities are now called “marketable equity
securities” and unrealized holding gains and losses on these securities are reported in the statements of operations in other
income and expenses, net. Prior to January 1, 2018 and the adoption of ASU 2016-01, these securities were called “available-for-sale
securities” and unrealized holding gains and losses were reported in other comprehensive income or loss, net of tax, and
were a component of the accumulated other comprehensive income or loss on the balance sheet. Realized gains and losses are included
in other income and expenses, net, in the statements of operations.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"><i> </i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">On
January 1, 2018, in accordance with the adoption of ASU 2016-01, OncoCyte recorded a cumulative-effect adjustment for these available-for-sale-securities
to reclassify the unrealized loss of $888,000 included in accumulated other comprehensive loss to the accumulated deficit balance.
For the three months ended March 31, 2018, OncoCyte recorded an unrealized gain of $190,000 included in other income and expenses,
net, due to the increase in fair market value of the marketable equity securities from December 31, 2017 to March 31, 2018.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">In
March 2017, OncoCyte sold 141,844 shares of BioTime stock for net proceeds of $502,000 and used those proceeds to pay down amounts
due to BioTime and affiliates (see Note 5). OncoCyte recognized a $155,000 loss from the sale of the BioTime shares included in
other income and expenses, net, for the three months ended March 31, 2017.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">As
of March 31, 2018, OncoCyte held 353,264 BioTime common shares as marketable equity securities with a fair market value of $950,000.
Any proceeds from the sale of BioTime shares may be used by OncoCyte to pay amounts owed to BioTime and its affiliates or for working
capital purposes (see Note 5).</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Net loss per common share</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">All
potentially dilutive common stock equivalents are antidilutive because OncoCyte reported a net loss for all periods presented.
The following common stock equivalents were excluded from the computation of diluted net loss per share of common stock for the
periods presented because including them would have been antidilutive (in thousands)</font>:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="6" style="border-bottom: black 1.5pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Three Months Ended March 31,</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(Unaudited)</b></p></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2018</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 66%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Stock options</font></td>
<td style="width: 2%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 14%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3,347</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 13%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3,263</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Warrants</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2,779</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3,049</font></td>
<td style="line-height: 107%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"><i>Recently Issued Accounting Pronouncements
Not Yet Adopted.</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">The
recently issued accounting pronouncements applicable to OncoCyte that are not yet effective should be read in conjunction with
the recently issued accounting pronouncements, as applicable and disclosed in OncoCyte’s Annual Report on Form 10-K, as
amended, for the year ended December 31, 2017.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 27pt; text-align: justify; text-indent: -27pt"><b>3. Selected
Balance Sheet Components</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i>Accrued expenses and other current liabilities</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">As of March 31,
2018 and December 31, 2017, accrued expenses and other current liabilities were comprised of the following (in thousands):</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>March 31, 2018</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(Unaudited)</b></p></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>December 31, 2017</b></font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 63%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Accrued compensation</font></td>
<td style="width: 2%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 15%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">700</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 15%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">636</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Accrued vendors and other expenses</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,209</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">406</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Accrued expenses and other current liabilities</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,909</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,042</font></td>
<td style="line-height: 107%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i>Intangible assets, net</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">As of March 31,
2018 and December 31, 2017, intangible assets, consisting primarily of <font style="background-color: white">acquired patents,
patent applications, and licenses to use certain patents,</font> were as follows (in thousands):</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>March 31, 2018</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(Unaudited)</b></p></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>December 31, 2017</b></font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 63%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Intangible assets</font></td>
<td style="width: 2%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 15%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2,419</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 15%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2,419</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Accumulated amortization</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(1,733</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(1,673</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Intangible assets, net</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">686</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">746</font></td>
<td style="line-height: 107%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Amortization expense
amounted to $61,000 in each of the three month periods ended March 31,2018 and 2017.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i>Equipment and furniture, net</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">As of March 31,
2018 and December 31, 2017, equipment and furniture were comprised of the following (in thousands):</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>March 31, 2018</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(Unaudited)</b></p></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>December 31, 2017</b></font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 63%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Equipment and furniture</font></td>
<td style="width: 2%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 15%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,348</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 15%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,479</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Accumulated depreciation</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(626</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(657</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Equipment and furniture, net</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">722</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">822</font></td>
<td style="line-height: 107%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Depreciation expense
amounted to $103,000 and $67,000 for the three months ended March 31, 2018 and 2017, respectively.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 27pt; text-align: justify; text-indent: -27pt"><b>4. Related
Party Transactions</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i>Shared Facilities Agreement</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On October 8, 2009,
OncoCyte and BioTime executed the 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.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">BioTime
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.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">  </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">The
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 March 31, 2018, BioTime has not charged
OncoCyte any interest.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">In
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. BioTime has 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 OncoCyte directly.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">The
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.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">In
the aggregate, BioTime allocated and charged OncoCyte </font>$73,000 and $79,000 of Use Fees included in general and administrative
expenses and Use Fees of $220,000 and $317,000 included in research and development expenses for the three months ended March 31,
2018 and 2017, respectively. <font style="background-color: white">Use Fees of $98,000 in sales and marketing expenses are
included in OncoCyte’s statements of operations during the </font>three months ended March 31, 2018<font style="background-color: white">.
There were no Use Fees allocated to sales and marketing expenses during </font>the three months ended March 31, 2017<font style="background-color: white">.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">As of March 31,
2018 and December 31, 2017, OncoCyte had $2.1 million outstanding and payable to BioTime and affiliates included in current liabilities
on account of Use Fees under the Shared Facilities Agreement. Since those amounts are due and payable within 30 days of being invoiced,
the payables are classified as current liabilities for all periods presented.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The minimum fixed
payments due under the Shared Facilities Agreement are approximately $131,000 per month.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 27pt; text-align: justify; text-indent: -27pt"><b>5. Loan
Payable to Silicon Valley Bank</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">On
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 March 31, 2018, the latest published prime rate plus 0.75% was 5.50% per annum.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"><font style="background-color: white">The
outstanding principal amount plus accrued interest will be due and payable to the Bank at maturity on April 1, 2020. At maturity,
OncoCyte will also pay the Bank an additional final payment fee of 5.8% of the original principal borrowed. OncoCyte accrued the
$116,000 final payment fee included in the loan payable as a deferred financing cost on the March 23, 2017 draw date.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"><font style="background-color: white">OncoCyte
may prepay in full the outstanding principal balance at any time, subject to a prepayment fee equal to 2.0% of the outstanding
principal balance if prepaid on or before February 21, 2019, or 1.0% of the outstanding principal balance if prepaid after February
21, 2019. Any amounts borrowed and repaid may not be reborrowed. There are no amounts available to be borrowed on the Loan Agreement.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"><font style="background-color: white">The
outstanding principal amount of the loan, with interest accrued, the final payment fee, and the prepayment fee may become due and
payable prior to the applicable maturity date if an “Event of Default” as defined in the Loan Agreement occurs and
is not cured within any applicable cure period. Upon the occurrence and during the continuance of an Event of Default, all obligations
due to the Bank will bear interest at a rate per annum which is 5% above the then applicable interest rate. An Event of Default
includes, among other events, failure to pay interest and principal when due, material adverse changes, which include a material
adverse change in OncoCyte’s business, operations, or condition (financial or otherwise), failure to provide the bank with
timely financial statements and copies of filings with the Securities and Exchange Commission, as required, legal judgments or
pending or threatened legal actions of $50,000 or more, insolvency, and delisting from the NYSE American. OncoCyte’s obligations
under the Loan Agreement are collateralized by substantially all of its assets other than intellectual property such as patents
and trade secrets that OncoCyte owns. Accordingly, if an Event of Default were to occur and not be cured, the Bank could foreclose
on its security interest in the collateral. OncoCyte was in compliance with the Loan Agreement as of the filing date of this Report.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white">  </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"><font style="background-color: white">Under
the provisions of the Loan Agreement, as consented by the Bank on October 26, 2017, any proceeds received by OncoCyte from sales
of BioTime shares may be used by OncoCyte to fund its operations.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"><i>Bank Warrants</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"><i> </i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"><font style="background-color: white">On
February 21, 2017, and in conjunction with the $2.0 million becoming available under the Loan Agreement, OncoCyte issued common
stock purchase warrants to the Bank (the “Bank Warrants”) entitling the Bank to purchase shares of OncoCyte common
stock in tranches related to the availability and borrowing of loan funds under the Loan Agreement. In conjunction with the availability
of the loan, the Bank was issued warrants to purchase 8,247 shares of OncoCyte common stock at an exercise price of $4.85 per share,
through February 21, 2027. On March 23, 2017, in conjunction with borrowing $2 million, the Bank was issued warrants to purchase
an additional 7,321 shares at an exercise price of $5.46 per share, through March 23, 2027. The Bank may elect to exercise the
Bank Warrants on a “cashless exercise” basis and receive a number of shares determined by multiplying the number of
shares for which the applicable tranche is being exercised by (A) the excess of the fair market value of the common stock over
the applicable exercise price, divided by (B) the fair market value of the common stock. The fair market value of the common stock
will be the last closing or sale price on a national securities exchange, interdealer quotation system, or over-the-counter market.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Bank Warrants
are classified as equity since, among other factors, they are not mandatorily redeemable, cannot be settled in cash or other assets
and require settlement by issuing a fixed number of shares of common stock of OncoCyte. OncoCyte determined the fair value of
the Bank Warrants using the Black-Scholes option pricing model to be approximately $62,000, which was recorded as a deferred financing
cost against the loan payable balance. Aggregate deferred financing costs of $196,000, recorded against the loan payable balance,
are amortized to interest expense over the term of the loan using the effective interest method. As of March 31, 2018, unamortized
deferred financing costs were $90,000.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 27pt; text-align: justify; text-indent: -27pt"><b>6. Shareholders’
Equity</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i>Preferred Stock</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">OncoCyte is authorized
to issue 5,000,000 shares of no par value preferred stock. As of March 31, 2018, no preferred shares were issued or outstanding.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="background-color: white"><i>Common Stock</i></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">OncoCyte has up to 50,000,000 shares of no par
value common stock authorized.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">On
March 28, 2018, OncoCyte entered into a securities purchase agreement with two accredited investors. The agreement provides for
the private placement of 7,936,508 shares of OncoCyte’s common stock for $1.26 per share, for total gross proceeds of $10.0
million before deducting offering expenses. Of this amount, as of March 31, 2018, OncoCyte has received $8.0 million in gross proceeds
from the sale of 6,349,206 shares of common stock, and one of the investors irrevocably committed in the agreement to pay to OncoCyte
an additional $2.0 million on or prior to April 30, 2018, for the purchase of an additional 1,587,302 shares of common stock, which
OncoCyte received on May 10 2018. The agreement contains certain registration rights. The investors are Broadwood Partners, L.P.
and George Karfunkel, who beneficially own more than 5% of OncoCyte’s outstanding common stock.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">As of March 31, 2018, and
December 31, 2017, OncoCyte had 37,817,764 and 31,451,558 issued and outstanding common shares, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><i>Issuance of common stock and warrants</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">On
August 29, 2016, OncoCyte sold an aggregate of 3,246,153 immediately separable units, with each unit consisting of one share of
OncoCyte common stock and one warrant to purchase one share of OncoCyte common stock (the “2016 Warrants”), at a price
of $3.25 per unit (the “Offering”). The sales were made pursuant to the terms and conditions of certain Purchase Agreements
between OncoCyte and the purchasers in the Offering. OncoCyte received $9.8 million in net proceeds after discounts, commissions
and expenses from the Offering.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><i>2016 Warrants and New Warrants</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">The
2016 Warrants have an exercise price of $3.25 per Warrant Share, and may be exercised for five years from October 17, 2016, the
date the 2016 Warrants became exercisable. The 2016 Warrants may be exercised on a net “cashless exercise” basis, meaning
that the value of a portion of Warrant Shares may be used to pay the exercise price (rather than payment in cash), in certain circumstances,
including if the Resale Registration Statement is not effective when and as required by the Purchase Agreements. The exercise price
and the number of Warrant Shares will be adjusted to account for certain transactions, including stock splits, dividends paid in
common stock, combinations or reverse splits of common stock, or reclassifications of common stock.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">Under
certain provisions of the 2016 Warrants, in the event of a Fundamental Transaction, as defined in the 2016 Warrants, OncoCyte will
use reasonable best efforts for the acquirer, or any successor entity other than OncoCyte, to assume the 2016 Warrants. If the
acquirer does not assume the OncoCyte Offering Warrant obligations, then the acquirer shall pay the holders of 2016 Warrants an
amount equal to the aggregate value equal to the Black Scholes Value, as defined in the 2016 Warrants. The payment of the Black
Scholes Value shall be made in cash or such other consideration as the acquirer paid to the other OncoCyte shareholders in the
Fundamental Transaction.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"><font style="background-color: white">OncoCyte
is not required to net cash settle the 2016 Warrants under any circumstance. </font>OncoCyte considered the guidance in ASC 815-40,
which states that contracts that require or may require the issuer to settle the contract for cash are liabilities recorded at
fair value, irrespective of the likelihood of the transaction occurring that triggers the net cash settlement feature. Since solely
an acquirer, and not OncoCyte itself, may be required to net cash settle the 2016 Warrants in the event of a Fundamental Transaction,
the 2016 Warrants are classified as equity.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">On
February 17, 2017, certain OncoCyte investors exercised 2016 Warrants to acquire 625,000 shares of common stock at an exercise
price of $3.25 per warrant for total exercise cash proceeds of $2.0 million (the “Warrant exercise”). In order to induce
the investors to complete the Warrant exercise and, in conjunction with the Warrant exercise, OncoCyte issued new warrants to those
investors (the “New Warrants”). Certain investors received New Warrants to purchase 200,000 shares of common stock
at an exercise price of $5.50 per share and one investor received New Warrants to purchase 212,500 shares of common stock at an
exercise of $3.25 per share. The New Warrants are exercisable at any time for five years from February 17, 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"><font style="background-color: white">The
New Warrants are classified as equity as their terms are consistent with the 2016 Warrants. For financial reporting purposes, the
issuance of the New Warrants was treated as an inducement offer to certain shareholders to exercise their 2016 Warrants. Accordingly,
the fair value of the New Warrants, determined using the </font>Black-Scholes option pricing model, <font style="background-color: white">approximating
$1.1 million was recognized by OncoCyte as a noncash charge to shareholder expense included in general and administrative expenses
and a corresponding increase to equity on February 17, 2017, the issuance date.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">On
July 21, 2017, OncoCyte entered into three forms of Warrant Exercise Agreements (each, an “Exercise Agreement”) with
certain holders of the 2016 Warrants providing for the cash exercise of their 2016 Warrants and the issuance of new warrants (the
“July 2017 Warrants”) to them.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">Pursuant
to one form of Exercise Agreement, two investors exercised 2016 Warrants to purchase 226,923 shares of OncoCyte’s common
stock at the exercise price of $3.25 per share, and OncoCyte issued to them July 2017 Warrants expiring five years from the date
of issue, to purchase 226,923 shares of common stock at an exercise price of $5.50 per share.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">Pursuant
to a second form of Exercise Agreement, one investor exercised 2016 Warrants to purchase 540,000 shares of common stock at the
exercise price of $3.25 per share, and OncoCyte issued to the investor a July 2017 Warrant, expiring five years from the date of
issue, to purchase 270,000 shares of common stock at an exercise price of $3.25 per share. In this alternative form of Exercise
Agreement, OncoCyte also agreed to use <font style="background-color: white">commercially reasonable efforts to </font>file with
the SEC a registration statement covering the resale of the shares of common stock issuable upon exercise of the July 2017 Warrant
and to keep it continuously effective for up to five years, subject to conditions set forth in the Exercise Agreement.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">Pursuant
to a third form of Exercise Agreement, one investor exercised 2016 Warrants to purchase 1,000,000 shares of common stock at the
exercise price of $3.25 per share, and OncoCyte issued to the investor (i) a July 2017 Warrant, expiring two years from the date
of issue, to purchase 500,000 shares of common stock at an exercise price of $5.50 per share, and (ii) a July 2017 Warrant, expiring
two years from the date of issue, to purchase 500,000 shares of common stock at an exercise price of $3.25 per share. In this alternative
form of Exercise Agreement, OncoCyte also agreed to use commercially reasonable efforts to file with the SEC a registration statement
covering the resale of the shares of common stock issuable upon exercise of the July 2017 Warrant and to keep it continuously effective
for up to five years, subject to conditions set forth in the Exercise Agreement.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">In
the aggregate, upon the exercise of 2016 Warrants under the Exercise Agreements, OncoCyte received gross proceeds of approximately
$5.74 million and issued July 2017 Warrants to purchase 1,496,923 shares of common stock at a weighted average price of $4.34 per
share.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">The
July 2017 Warrants are classified as equity as their terms are consistent with the 2016 Warrants. For financial reporting purposes,
the issuance of the July 2017 Warrants is treated as an inducement offer to certain investors to exercise their 2016 Warrants.
Accordingly, the fair value of the July 2017 Warrants, determined to be approximately $3.0 million using the </font>Black-Scholes
option pricing model, <font style="background-color: white">was recorded as a noncash charge to shareholder expense included in
general and administrative expenses, and a corresponding increase was recorded to equity on July 21, 2017, the issuance date.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">As
of March 31, 2018, OncoCyte has an aggregate of 2,779,221 warrants issued and outstanding at exercise prices ranging from $3.25
and $5.50 per warrant.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>Stock option exercises</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">During the three months
ended March 31, 2018, 17,000 shares of common stock were issued upon the exercise of stock options, from which OncoCyte received
approximately $51,000 in cash proceeds.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 27pt; text-align: justify; text-indent: -27pt"><b>7. Stock-based
Compensation</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i>Options Granted</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">OncoCyte has adopted a
2010 Stock Option Plan (the “Plan”) under which <font style="background-color: white">5,200,000 </font>shares of common
stock are authorized for the grant of stock options or the sale of restricted stock. The Plan also permits OncoCyte to issue such
other securities as its Board of Directors or the Compensation Committee administering the Plan may determine.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">A summary of OncoCyte stock
option activity under the Plan and related information follows (in thousands except weighted average exercise price):</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td><font style="font-size: 10pt"><b>Options</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Shares</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Available</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>for Grant (unaudited)</b></p></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>of Options</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Outstanding (unaudited)</b></p></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercise Price (unaudited)</b></p></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 49%"><font style="font-size: 10pt">December 31, 2017</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 14%; text-align: right"><font style="font-size: 10pt">1,384</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 14%; text-align: right"><font style="font-size: 10pt">3,390</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 14%; text-align: right"><font style="font-size: 10pt">3.25</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Options granted</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Options exercised</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">(17</font></td>
<td><font style="font-size: 10pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">3.00</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Options forfeited and canceled</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">26</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(26</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">4.29</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">March 31, 2018</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">1,410</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">3,347</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">3.24</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Exercisable at March 31, 2018</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td> </td>
<td style="text-align: right"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">2,097</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">2.70</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">There were no options granted during the three
months ended March 31, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">OncoCyte recorded stock-based
compensation expense in the following categories on the accompanying statements of operations for the three months ended March
31, 2018 and 2017 (in thousands):</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="6" style="border-bottom: black 1.5pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Three Months Ended</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>March 31,</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(Unaudited)</b></p></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 65%"><font style="font-size: 10pt">Research and development</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 14%; text-align: right"><font style="font-size: 10pt">(78</font></td>
<td style="width: 2%"><font style="font-size: 10pt">)<sup>(1)</sup></font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 14%; text-align: right"><font style="font-size: 10pt">205</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">General and administrative</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">256</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">145</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Sales and marketing</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">168</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Total stock-based compensation expense</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">346</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">350</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><sup>(1) </sup>The
negative stock-based compensation expense is primarily attributable to the decrease in the OncoCyte stock price from $4.65
per share at December 31, 2017 to $2.10 per share at March 31, 2018 for consultant stock options which require mark to market
adjustment each quarter for unvested shares.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The assumptions that were
used to calculate the grant date fair value of OncoCyte’s employee and non-employee stock option grants for the three months
ended March 31, 2018 and 2017 were as follows.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2018 </b></font><br />
<font style="font-size: 10pt"><b>(unaudited)</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2017 </b></font><br />
<font style="font-size: 10pt"><b>(unaudited)</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 66%"><font style="font-size: 10pt">Expected life (in years)</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 14%; text-align: right"><font style="font-size: 10pt">8.00</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 14%; text-align: right"><font style="font-size: 10pt">6.53</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Risk-free interest rates</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2.81</font></td>
<td><font style="font-size: 10pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2.11</font></td>
<td><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Volatility</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">72.70</font></td>
<td><font style="font-size: 10pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">57.29</font></td>
<td><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Dividend yield</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td><font style="font-size: 10pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td><font style="font-size: 10pt">%</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">With the adoption of ASU
2016-09, effectively January 1, 2017, forfeitures are accounted for as they occur instead of based on the number of awards that
were expected to vest.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The determination of stock-based
compensation is inherently uncertain and subjective and involves the application of valuation models and assumptions requiring
the use of judgment. If OncoCyte had made different assumptions, its stock-based compensation expense and net loss for the three
months ended March 31, 2018 and 2017 may have been significantly different.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">OncoCyte does not recognize
deferred income taxes for incentive stock option compensation expense, and records a tax deduction only when a disqualified disposition
has occurred.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 27pt; text-align: justify; text-indent: -27pt"><b>8. Income
Taxes</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The provision for
income taxes is determined using an estimated annual effective tax rate. The effective tax rate may be subject to fluctuations
during the year as new information is obtained, which may affect the assumptions used to estimate the annual effective tax rate,
including factors such as valuation allowances against deferred tax assets, the recognition or de-recognition of tax benefits related
to uncertain tax positions, if any, and changes in or the interpretation of tax laws in jurisdictions where OncoCyte conducts business.
Due to losses incurred for all periods presented, OncoCyte did not record any provision or benefit for income taxes.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">A valuation allowance
is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. OncoCyte established
a full valuation allowance for all periods presented due to the uncertainty of realizing future tax benefits from its net operating
loss carryforwards and other deferred tax assets.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 27pt; text-align: justify; text-indent: -27pt"><b>9. Commitments
and Contingencies</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 27pt; background-color: white"><font style="background-color: white">OncoCyte
has certain commitments other than those under the Shared Facilities.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i> </i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>Master Lease
Line Agreement</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On April 7, 2016,
OncoCyte entered into a Master Lease Line Agreement (“Lease Agreement”) with an unrelated financing company for the
purchase and financing of certain equipment. OncoCyte may use up to $881,000, as amended, for purchases of equipment financed under
the Lease Agreement through April 2017. Each lease schedule OncoCyte enters into under Lease Agreement must be in minimum increments
of $50,000 each with a 36-month lease term, collateralized by the equipment financed under the lease schedule. Each lease schedule
requires a deposit for the first and last payment under that schedule. Monthly payments will be determined using a lease factor
approximating an interest rate of 10% per annum. At the end of each lease schedule under Lease Agreement, assuming no default has
occurred, OncoCyte may either return the equipment financed under the schedule for a restocking fee of 7.5% of the original cost
of the equipment or purchase the equipment from the financing company at a fair value not less than 12.5% of the original cost
of the equipment.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">On
April 7, 2016, OncoCyte entered into a lease schedule under the Lease Agreement (“Lease Schedule No. 1”) for certain
equipment costing approximately $435,000 applied against the lease line, requiring payments of $14,442 per month over 36 months.
In December 2016, OncoCyte entered into another lease schedule (“Lease Schedule No. 2”) for certain equipment costing
approximately $161,000, requiring payments of $5,342 per month over 36 months. In April 2017, OncoCyte entered into a third and
final lease schedule (“Lease Schedule No. 3”) for certain equipment costing approximately $285,000, requiring payments
of $9,462 per month over 36 months. After this last tranche, the Lease Agreement was closed and has no remaining financing available.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">OncoCyte
has accounted for these leases as a capital lease in accordance with ASC 840, <i>Leases</i> , due to the net present
value of the payments under the lease approximating the fair value of the equipment at inception of the lease. The payments under
the lease schedules will be amortized to capital lease obligations and interest expense using the interest method at an imputed
rate of approximately 10% per annum.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white">  </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">On
May 11, 2017, OncoCyte entered into another Master Lease Line Agreement (“Lease Agreement No. 2”) with the same finance
company above and similar terms. OncoCyte may use up to $900,000 for purchases of equipment financed under Lease Agreement No.
2 through October 28, 2018. As of March 31, 2018, $820,000 under Lease Agreement No. 2 was available to OncoCyte.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Litigation – General</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">OncoCyte will be
subject to various claims and contingencies in the ordinary course of its business, including those related to litigation, business
transactions, employee-related matters, and other matters. When OncoCyte is aware of a claim or potential claim, it assesses the
likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated,
OncoCyte will record a liability for the loss. If the loss is not probable or the amount of the loss cannot be reasonably estimated,
OncoCyte discloses the claim if the likelihood of a potential loss is reasonably possible and the amount involved could be material.
OncoCyte is not aware of any claims likely to have a material adverse effect on its financial condition or results of operations.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Employment Contracts</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">OncoCyte has entered
into employment contracts with certain executive officers. Under the provisions of the contracts, OncoCyte may be required to incur
severance obligations for matters relating to changes in control, as defined, and involuntary terminations.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Indemnification</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In the normal course
of business, OncoCyte may provide indemnification of varying scope under OncoCyte’s agreements with other companies or consultants,
typically OncoCyte’s clinical research organizations, investigators, clinical sites, suppliers and others. Pursuant to these
agreements, OncoCyte will generally agree to indemnify, hold harmless, and reimburse the indemnified parties for losses and expenses
suffered or incurred by the indemnified parties arising from claims of third parties in connection with the use or testing of
OncoCyte’s diagnostic tests. Indemnification provisions could also cover third party infringement claims with respect to
patent rights, copyrights, or other intellectual property pertaining to OncoCyte’s diagnostic tests. The term of these indemnification
agreements will generally continue in effect after the termination or expiration of the particular research, development, services,
or license agreement to which they relate. The potential future payments OncoCyte could be required to make under these indemnification
agreements will generally not be subject to any specified maximum amounts. Historically, OncoCyte has not been subject to any
claims or demands for indemnification. OncoCyte also maintains various liability insurance policies that limit OncoCyte’s
financial exposure. As a result, OncoCyte management believes that the fair value of these indemnification agreements is minimal.
Accordingly, OncoCyte has not recorded any liabilities for these agreements as of March 31, 2018 and December 31, 2017.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 27pt; text-align: justify; text-indent: -27pt"><b>10. Subsequent
Event</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 27pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On May 14, 2018, OncoCyte’s
Board of Directors determined that, as a part of a cost savings plan, certain executives will be offered a sabbatical without
pay in lieu of being included in a reduction in staff. If those executives were to decline the offered sabbatical and OncoCyte
were to terminate their employment, OncoCyte would incur a total of approximately $200,000 in severance compensation payments
under the terms of their employment agreements.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"><i>Accounting for BioTime shares</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">OncoCyte
accounts for the BioTime shares it holds as marketable equity securities in accordance with ASC 320-10-25, <i>Investments
– Debt and Equity Securities</i>, as amended by Accounting Standards Update (“ASU”) 2016-01, <i>Financial
Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities</i><font style="background-color: white">, </font>as
the shares have a readily determinable fair value quoted on the NYSE American and are held principally to meet future working capital
purposes, as necessary. The securities are measured at fair value and reported as current assets on the balance sheet based on
the closing trading price of the security as of the date being presented.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">Beginning
on January 1, 2018, with the adoption of ASU 2016-01 discussed below, these securities are now called “marketable equity
securities” and unrealized holding gains and losses on these securities are reported in the statements of operations in other
income and expenses, net. Prior to January 1, 2018 and the adoption of ASU 2016-01, these securities were called “available-for-sale
securities” and unrealized holding gains and losses were reported in other comprehensive income or loss, net of tax, and
were a component of the accumulated other comprehensive income or loss on the balance sheet. Realized gains and losses are included
in other income and expenses, net, in the statements of operations.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"><i> </i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">On
January 1, 2018, in accordance with the adoption of ASU 2016-01, OncoCyte recorded a cumulative-effect adjustment for these available-for-sale-securities
to reclassify the unrealized loss of $888,000 included in accumulated other comprehensive loss to the accumulated deficit balance.
For the three months ended March 31, 2018, OncoCyte recorded an unrealized gain of $190,000 included in other income and expenses,
net, due to the increase in fair market value of the marketable equity securities from December 31, 2017 to March 31, 2018.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">In
March 2017, OncoCyte sold 141,844 shares of BioTime stock for net proceeds of $502,000 and used those proceeds to pay down amounts
due to BioTime and affiliates (see Note 5). OncoCyte recognized a $155,000 loss from the sale of the BioTime shares included in
other income and expenses, net, for the three months ended March 31, 2017.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">As
of March 31, 2018, OncoCyte held 353,264 BioTime common shares as marketable equity securities with a fair market value of $950,000.
Any proceeds from the sale of BioTime shares may be used by OncoCyte to pay amounts owed to BioTime and its affiliates or for
working capital purposes (see Note 5).</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"><i>Research and development expenses</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Research and development
expenses include both direct expenses incurred by OncoCyte and indirect overhead costs allocated by BioTime that benefit or support
OncoCyte’s research and development functions. Direct research and development expenses consist primarily of personnel costs
and related benefits, including stock-based compensation, outside consultants and suppliers. Indirect research and development
expenses allocated by BioTime to OncoCyte under the Shared Facilities Agreement (see Note 4), are primarily based on headcount
or space occupied, as applicable, and include laboratory supplies, laboratory expenses, rent and utilities, common area maintenance,
telecommunications, property taxes and insurance. Research and development costs are expensed as incurred.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>General
and administrative expenses</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">General and administrative
expenses include both direct expenses incurred by OncoCyte and indirect overhead costs allocated by BioTime that benefit or support
OncoCyte’s general and administrative functions. Direct general and administrative expenses consist primarily of compensation
and related benefits, including stock-based compensation, for executive and corporate personnel, and professional and consulting
fees. Indirect general and administrative expenses allocated by BioTime to OncoCyte under the Shared Facilities Agreement (see
Note 4) are primarily based on headcount or space occupied, as applicable, and include costs for financial reporting and compliance,
rent and utilities, common area maintenance, telecommunications, property taxes and insurance.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><i>Sales and
marketing expenses</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">Sales
and marketing expenses consist primarily of personnel costs and related benefits, including stock-based compensation, trade shows
and booths, branding and positioning, and outside consultants. Indirect sales and marketing expenses allocated by BioTime, primarily
based on OncoCyte’s headcount or space occupied, as applicable, include costs for rent and utilities, common area maintenance,
telecommunications, property taxes and insurance, incurred by BioTime and allocated to us under the Shared Facilities Agreement.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Net loss per common share</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">All
potentially dilutive common stock equivalents are antidilutive because OncoCyte reported a net loss for all periods presented.
The following common stock equivalents were excluded from the computation of diluted net loss per share of common stock for the
periods presented because including them would have been antidilutive (in thousands)</font>:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="6" style="border-bottom: black 1.5pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Three Months Ended March 31,</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(Unaudited)</b></p></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2018</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 66%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Stock options</font></td>
<td style="width: 2%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 14%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3,347</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 13%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3,263</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Warrants</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2,779</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3,049</font></td>
<td style="line-height: 107%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"><i>Recently Issued Accounting Pronouncements
Not Yet Adopted.</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">The
recently issued accounting pronouncements applicable to OncoCyte that are not yet effective should be read in conjunction with
the recently issued accounting pronouncements, as applicable and disclosed in OncoCyte’s Annual Report on Form 10-K, as
amended, for the year ended December 31, 2017.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">The
following common stock equivalents were excluded from the computation of diluted net loss per share of common stock for the periods
presented because including them would have been antidilutive (in thousands)</font>:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="6" style="border-bottom: black 1.5pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Three Months Ended March 31,</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(Unaudited)</b></p></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2018</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 66%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Stock options</font></td>
<td style="width: 2%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 14%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3,347</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 13%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3,263</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Warrants</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2,779</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3,049</font></td>
<td style="line-height: 107%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">As of March 31,
2018 and December 31, 2017, accrued expenses and other current liabilities were comprised of the following (in thousands):</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>March 31, 2018</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(Unaudited)</b></p></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>December 31, 2017</b></font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 63%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Accrued compensation</font></td>
<td style="width: 2%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 15%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">700</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 15%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">636</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Accrued vendors and other expenses</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,209</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">406</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Accrued expenses and other current liabilities</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,909</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,042</font></td>
<td style="line-height: 107%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">As of March 31,
2018 and December 31, 2017, intangible assets, consisting primarily of <font style="background-color: white">acquired patents,
patent applications, and licenses to use certain patents,</font> were as follows (in thousands):</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>March 31, 2018</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(Unaudited)</b></p></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>December 31, 2017</b></font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 63%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Intangible assets</font></td>
<td style="width: 2%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 15%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2,419</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 15%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2,419</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Accumulated amortization</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(1,733</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(1,673</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Intangible assets, net</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">686</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">746</font></td>
<td style="line-height: 107%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">As of March 31,
2018 and December 31, 2017, equipment and furniture were comprised of the following (in thousands):</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>March 31, 2018</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(Unaudited)</b></p></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>December 31, 2017</b></font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 63%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Equipment and furniture</font></td>
<td style="width: 2%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 15%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,348</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 15%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,479</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Accumulated depreciation</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(626</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(657</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Equipment and furniture, net</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">722</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">822</font></td>
<td style="line-height: 107%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">A summary of OncoCyte
stock option activity under the Plan and related information follows (in thousands except weighted average exercise price):</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Options</b></font></td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Shares</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Available</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>for Grant (unaudited)</b></p></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>of Options</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Outstanding (unaudited)</b></p></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercise Price (unaudited)</b></p></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 50%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">December 31, 2017</font></td>
<td style="width: 2%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 14%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,384</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 13%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3,390</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 13%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3.25</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Options granted</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Options exercised</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(17</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3.00</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Options forfeited and canceled</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">26</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(26</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">4.29</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">March 31, 2018</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,410</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3,347</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3.24</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Exercisable at March 31, 2018</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2,097</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2.70</font></td>
<td style="line-height: 107%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">OncoCyte recorded stock-based
compensation expense in the following categories on the accompanying statements of operations for the three months ended March
31, 2018 and 2017 (in thousands):</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="6" style="border-bottom: black 1.5pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Three Months Ended</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>March 31,</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(Unaudited)</b></p></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 65%"><font style="font-size: 10pt">Research and development</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 14%; text-align: right"><font style="font-size: 10pt">(78</font></td>
<td style="width: 2%"><font style="font-size: 10pt">)<sup>(1)</sup></font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 14%; text-align: right"><font style="font-size: 10pt">205</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">General and administrative</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">256</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">145</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Sales and marketing</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">168</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Total stock-based compensation expense</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">346</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">350</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><sup>(1) </sup>The
negative stock-based compensation expense is primarily attributable to the decrease in the OncoCyte stock price from $4.65
per share at December 31, 2017 to $2.10 per share at March 31, 2018 for consultant stock options which require mark to market
adjustment each quarter for unvested shares.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The assumptions
that were used to calculate the grant date fair value of OncoCyte’s employee and non-employee stock option grants for the
three months ended March 31, 2018 and 2017 were as follows.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2018 </b></font><br />
<font style="font: 10pt Times New Roman, Times, Serif"><b>(unaudited)</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017 </b></font><br />
<font style="font: 10pt Times New Roman, Times, Serif"><b>(unaudited)</b></font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 66%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Expected life (in years)</font></td>
<td style="width: 2%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 14%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">8.00</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 13%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">6.53</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Risk-free interest rates</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2.81</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2.11</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Volatility</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">72.70</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">57.29</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Dividend yield</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"></p>
0.50
2000000
190000
888000
141844
155000
353264
3347000
2779000
3263000
3049000
700000
636000
1209000
406000
2419000
2419000
1733000
1673000
1348000
1479000
626000
657000
0.05
0.15
P30D
73000
79000
220000
317000
98000
2100000
2100000
131000
2000000
Monthly
67000
0.0075
0.0425
0.0550
2020-04-01
0.058
0.020
0.010
0.05
50000
8247
7321
200000
212500
625000
226923
540000
1000000
1496923
500000
500000
4.85
5.46
5.50
3.25
3.25
3.25
3.25
3.25
3.25
5.50
5.50
3.25
5.50
3.25
62000
196000
90000
5200000
1410000
1384000
26000
3347000
3390000
17000
17000
26000
2097000
3.24
3.25
3
4.29
2.70
2.10
4.65
P8Y
P6Y6M10D
0.0281
0.0211
0.7270
0.5729
0.00
0.00
881000
435000
161000
285000
900000
50000
P36M
0.10
0.10
0.075
0.125
14442000
5342000
9462000
820000
7936508
6349206
1587302
1.26
3246153
1
1
1
3.25
9800000
1
2
1
1
P5Y
P5Y
P5Y
P5Y
P2Y
P2Y
P5Y
1100000
3000000
2779221
2779221
4.34
5.74
3
10000000
8000000
2000000
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Basis of presentation</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The unaudited condensed
interim financial statements presented herein, and discussed below, have been prepared on a stand-alone basis in accordance with
accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance
with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Commission (the “SEC”).
In accordance with those rules and regulations certain information and footnote disclosures normally included in comprehensive
financial statements have been condensed or omitted. The condensed balance sheet as of December 31, 2017 was derived from the audited
financial statements at that date, but does not include all the information and footnotes required by GAAP. These condensed financial
statements should be read in conjunction with the audited financial statements and notes thereto included in OncoCyte’s Annual
Report on Form 10-K, as amended, for the year ended December 31, 2017.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The accompanying
interim condensed financial statements, in the opinion of management, include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of OncoCyte’s financial condition and results of operations. The condensed
results of operations are not necessarily indicative of the results to be expected for any other interim period or for the entire
year.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"><font style="background-color: white">Prior
to February 17, 2017, BioTime consolidated the results of OncoCyte into BioTime’s consolidated results based on BioTime’s
ability to control OncoCyte’s operating and financial decisions and policies through its majority ownership of OncoCyte common
stock. Beginning on February 17, 2017, BioTime’s percentage ownership of the outstanding OncoCyte common stock declined below
50%, resulting in a loss of “control” of OncoCyte under GAAP and, as a result, BioTime deconsolidated OncoCyte’s
financial statements from BioTime’s consolidated financial statements. As a result of this deconsolidation, OncoCyte is no
longer considered a subsidiary of BioTime under GAAP with effect from February 17, 2017. OncoCyte remains an affiliate of BioTime
based on BioTime’s retained share ownership in OncoCyte, which is sufficient to allow BioTime to exert significant influence
over the operations and management of OncoCyte.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="background-color: white">To
the extent OncoCyte does not have its own office and laboratory facilities, employees, or human resources for its operations, BioTime
provides certain OncoCyte with use of its facilities and employees for administrative or operational services, as necessary, for
the benefit of OncoCyte under the terms of a Shared Facilities and Services Agreement (the “Shared Facilities Agreement”).
See Note 4. Accordingly, BioTime allocates expenses such as salaries and payroll related expenses incurred and paid on behalf of
OncoCyte based on the amount of time that particular employees devote to OncoCyte affairs. Other expenses such as legal, accounting,
human resources, marketing, travel, and entertainment expenses are allocated to OncoCyte to the extent that those expenses are
incurred by or on behalf of OncoCyte. BioTime also allocates certain overhead expenses such as facilities rent and utilities, property
taxes, insurance, internet and telephone expenses based on a percentage determined by management. Overhead allocations are made
based upon allocation drivers such as percentage of square feet of office or laboratory space used, and percentage of personnel
devoted to OncoCyte’s operations or management. See Note 2. Management evaluates the appropriateness of the percentage allocations
on a periodic basis and believes that this basis for allocation is reasonable.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">OncoCyte previously
granted stock options to employees of BioTime, or employees of other BioTime subsidiaries who perform services for OncoCyte, and
OncoCyte recorded stock-based compensation expense in the accompanying condensed statements of operations for the services performed
in the periods presented.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i>Liquidity</i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">For all periods
presented, OncoCyte generated no revenues. Since inception, OncoCyte has financed its operations through the sale of its common
stock and warrants, warrant exercises, a bank loan (see Note 5), and sales of BioTime common shares that OncoCyte holds as marketable
equity securities. BioTime has also provided OncoCyte with the use of BioTime facilities and services under the Shared Facilities
Agreement as described in Note 4. OncoCyte has incurred operating losses and negative cash flows since inception, and had an accumulated
deficit of $59.3 million and $54.7 million as March 31, 2018 and December 31, 2017, respectively.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">OncoCyte plans to
continue to invest significant resources in research and development in the field of molecular cancer diagnostics. OncoCyte expects
to continue to incur operating losses and negative cash flows. If results of OncoCyte’s research and development efforts,
including the results of validation studies of its lung cancer test, DetermaVu™, are successful to the point where OncoCyte
believes that a commercial product can be launched successfully, additional capital will be required to develop a sales and marketing
team to market DetermaVu™ and to hire additional administrative personnel for patient billing and reimbursement procedures.
OncoCyte will also need to raise additional capital in subsequent years to develop and launch additional diagnostic tests, for
working capital, and for other expenses, until such time as it is able to generate sufficient revenues from the commercialization
of its diagnostic tests to finance its operations. Delays in the development or commercialization of DetermaVu™ could prevent
OncoCyte from raising, when needed, sufficient additional capital to finance the completion of development and commercial launch
of DetermaVu™ or the other cancer diagnostic tests that OncoCyte is developing. The unavailability or inadequacy of financing
or revenues to meet future capital needs could force OncoCyte to modify, curtail, delay, or suspend some or all aspects of its
planned operations. Sales of additional equity securities could result in the dilution of the interests of its shareholders. OncoCyte
cannot assure that adequate financing will be available on favorable terms, if at all.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white">At
March 31, 2018, OncoCyte had $12.6 million of cash and cash equivalents and held BioTime common shares as marketable equity securities
valued at $950,000 (see Notes 2 and 5). <font style="background-color: white">Based on cash, cash equivalents and marketable equity
securities as of March 31, 2018, and the $2.0 million received on May 10, 2018 from the private placement completed on March 28,
2018 (see Note 6), OncoCyte believes it has sufficient cash, cash equivalents, marketable equity securities and working capital
to carry out its current operations through at least twelve months from the issuance date of the financial statements included
herein, but will need to raise additional capital if it determines to devote more resources to the development or initial commercialization
efforts for its lung cancer test during that time frame.</font></p>
200000
950000
760000
The negative stock-based compensation expense is primarily attributable to the decrease in the OncoCyte stock price from $4.65 per share at December 31, 2017 to $2.10 per share at March 31, 2018 for consultant stock options which require mark to market adjustment each quarter for unvested shares.