Insight Molecular Diagnostics Inc.

Smaller Reporting Company

We are a “smaller reporting company” as defined in the rules and regulations of the SEC. As a smaller reporting company we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable, in general, to public companies that are not smaller reporting companies. Accordingly, this Report includes reduced disclosure about our executive compensation arrangements.

Summary Compensation Table

The following table shows compensation awarded to, paid to or earned by, (1) the Company’s principal executive officer, (2) the Company’s most highly compensated executive officer other than the principal executive officer and (3) up to two individuals who would have qualified as one of the Company’s two most highly compensated executive officers other than the principal executive officer but for the fact that the individual was not serving as an executive officer of the Company at the end of the last completed fiscal year; during the fiscal years ended December 31, 2024 and 2023 (collectively, the “Named Executive Officers”).

(1)

Option awards granted under our 2010 Employee Stock Option Plan (the “Option Plan”) or under our Incentive Plan are valued at the aggregate grant date fair value, as if all options were fully vested and exercisable at the date of grant. Amounts shown in this column do not reflect dollar amounts actually received by our Named Executive Officers. Instead, these amounts reflect the aggregate grant date fair value of each stock option granted, computed in accordance with the provisions of FASB ASC Topic 718. For stock options that have performance-based (sometimes referred to as milestone-based) vesting conditions, compensation is shown in the tables in the same manner as Oncocyte recorded stock-based compensation expense for the grant on the basis of the estimated probability that the vesting condition will be met or the determination that the condition has been met. We used the Black-Scholes Pricing Model to compute option fair values based on applicable exercise and stock prices, an expected option term, volatility assumptions, and risk-free interest rates. Our Named Executive Officers will only realize compensation upon exercise of the stock options and to the extent the trading price of our common stock is greater than the exercise price of such stock options at the time of exercise.

Time-based stock awards consist entirely of restricted stock units (“RSUs”) and are valued in the table at the aggregate grant date fair value based on the closing price of Oncocyte common stock as quoted on the applicable trading market as if the stock awards were fully vested. Beginning on February 7, 2023, our common stock began trading on the Nasdaq Capital Market under the symbol “OCX.” Previously, our common stock traded under the same symbol on The Nasdaq Global Market since March 8, 2021, and prior to that, on the NYSE American. For stock awards that have performance-based (sometimes referred to as milestone-based) vesting conditions, compensation is shown in the tables in the same manner as Oncocyte recorded stock-based compensation expense for the grant on the basis of the estimated probability that the vesting condition will be met or the determination that the condition has been met. The fair value of the stock awards was measured using Black-Scholes option-pricing model assuming that performance goals will be achieved for the performance-based stock awards, and the Monte Carlo simulation model for the market-based vesting conditions.

(2)

Other compensation consists primarily of employer contributions to employee accounts under our 401(k) plan. See Executive Employment Agreements, Change of Control Provisions and Separation Payments – Separation Payments for more information.

(3)

In December 2022, Mr. Riggs was appointed Interim President and Chief Executive Officer and was later appointed President and Chief Executive Officer in February 2023.

(4)

In May 2024, Mr. Riggs was granted 90,000 stock options exercisable at an exercise price of $2.76 per share.

(5)

In January 2023, Mr. Riggs was granted 12,874 stock options exercisable at an exercise price of $9.26 per share. In June 2023, Mr. Riggs was granted 17,500 stock options exercisable at an exercise price of $4.26 per share. In August 2023, Mr. Riggs was granted 40,000 stock options exercisable at an exercise price of $3.34 per share. Mr. Riggs was also granted 5,821 stock options in February 2023, exercisable at an exercise price of $7.80 per share, that were deemed earned in 2022.

(6)

Includes $56,880 in cash and 5,821 stock options exercisable at an exercise price of $7.80 per share.

(7)

Ms. James was appointed as the Company’s Chief Financial Officer on June 17, 2024.

(8)

In June 2024, Ms. James was granted 100,000 RSUs.

(9)

In June 2024, Ms. James was granted 200,000 stock options exercisable at an exercise price of $2.76 per share.

(10)

In May 2024, Mr. Liu was granted 10,000 stock options exercisable at an exercise price of $2.76 per share.

(11)

In January 2023, Mr. Liu was granted 2,853 stock options exercisable at an exercise price of $9.26 per share. In February 2023, Mr. Liu was granted 8,482 stock options exercisable at an exercise price of $3.11 per share.

(12)

In May 2024, Dr. Schütz was granted 35,000 stock options exercisable at an exercise price of $2.76 per share.

(13)

In January 2023, Dr. Schütz was granted 12,873 stock options exercisable at an exercise price of $9.26 per share. In February 2023, Dr. Schütz was granted 6,044 stock options exercisable at an exercise price of $7.80 per share. In August 2023, Dr. Schütz was granted 20,000 stock options exercisable at an exercise price of $3.34 per share.

Employment Agreements

Joshua Riggs

We entered into an amended and restated employment agreement dated as of June 6, 2023, effective as of May 1, 2023, and as amended on July 13, 2023 (as amended, the “Riggs Employment Agreement”) with Mr. Riggs, related to his services with the Company.

The Riggs Employment Agreement provides for (i) a base salary of $360,000 per annum (pro-rated for partial years), (ii) a target bonus opportunity of fifty percent (50%) of Mr. Riggs’ base salary, and (iii) eligibility to participate in employee benefit programs and plans offered by the Company. On May 30, 2024, Board approved increases to the annual base salary of Mr. Riggs from $360,000 to $400,000, effective May 20, 2024. On March 4, 2025, the Board approved an increase to the annual base salary of Mr. Riggs from $400,000 to $420,000, effective March 10, 2025.

Pursuant to the Riggs Employment Agreement, on June 9, 2023, Mr. Riggs received options to purchase 350,000 shares of Company common stock (the “CEO Options”) under the Incentive Plan. The CEO Options have an exercise price per share equal to $2.76 and expire 10 years from the date of grant. The vesting of the CEO Options is as follows: 25% of the options vested on June 9, 2024, and the balance of the options vested or will vest thereafter in thirty-six (36) substantially equal monthly installments, subject to Mr. Riggs’ continued employment with the Company and compliance with any restrictive covenants by which he is bound on each applicable vesting date.

In the event Mr. Riggs’ employment is terminated by the Company without Cause (as defined in the Riggs Employment Agreement) (excluding due to death or disability) or by Mr. Riggs for Good Reason (as defined in the Riggs Employment Agreement), in addition to any accrued but unpaid base salary and any other vested benefits (the “Accrued Obligations”), subject to the execution of a release of claims and Mr. Riggs’ continued compliance with any restrictive covenants by which he may be bound, Mr. Riggs will be entitled to receive: (i) an amount equal to twelve (12) months of Mr. Riggs’ base salary, payable at Company’s sole discretion either (x) in a lump sum on the first payroll date following the sixtieth (60th) day following the date of termination or (y) in twelve (12) equal monthly installments during the twelve (12) months following the date of termination; (ii) a pro-rated annual bonus based for the year of termination based on actual performance; (iii) reimbursement of health care premiums for up twelve (12) months following the date of termination; and (iv) accelerated vesting of the next vesting tranche of any outstanding time-based equity awards. In the event Mr. Riggs’ employment is terminated due to death, by the Company due to Disability (as defined in the Riggs Employment Agreement) or for Cause, or by Mr. Riggs’ without Good Reason, Mr. Riggs will receive the Accrued Obligations.

The Riggs Employment Agreement also contains customary restrictive covenants, including restrictions related to non-solicitation, competitive activities, non-publicity, non-disparagement and cooperation. In addition, in connection with entering into the Riggs Employment Agreement, Mr. Riggs also entered into (i) an employee confidential information and inventions assignment agreement, and (ii) the Company’s standard form indemnification agreement for officer and directors of the Company.

On March 9, 2025, the Board approved a one-time grant under the Incentive Plan of $600,000 of RSUs to Mr. Riggs, subject to a maximum of 200,000 RSUs, which shall have a grant date of the second full trading day after the release of the Company’s financial results for the quarter and fiscal year ended December 31, 2024, with one-fourth of the RSUs shall vest on each of the first, second, third and fourth anniversaries of the effective date of grant, subject to continuous service through the applicable vesting date.

Ekkehard Schütz

During 2024, the annual salary of Dr. Schütz, our Chief Science Officer was $378,025. On March 4, 2025, the Board approved an increase to the annual base salary of Dr. Schütz from $378,025 to $396,926, effective March 10, 2025. In addition, Dr. Schütz previously entered into a Managing Director Service Agreement with our wholly owned German subsidiary, Chronix Biomedical GmbH (“Chronix Germany”), relating to his services as Managing Director of Chronix Germany (the “Managing Director Service Agreement”). Pursuant to the Managing Director Service Agreement, Dr. Schütz is eligible for (i) a base salary of €315,000 per annum, and (ii) a target bonus opportunity of forty percent (40%) of base salary.

Either party may terminate the Managing Director Service Agreement upon 6 months’ prior written notice. In addition, the agreement will terminate automatically when Dr. Schütz reaches the age at which he becomes entitled to a regular old age pension payable the German statutory pension scheme, or if Dr. Schütz becomes unable to work in general or specifically unable to exercise his profession. The Managing Director Service Agreement also contains certain restrictive covenants, including a two-year non-compete following the termination of the agreement. During this two-year period, Dr. Schütz will receive monthly compensation equal to 50% of latest contractual benefits. The Managing Director Service Agreement also provides for the assignment to Chronix of Dr. Schütz’s inventions and intellectual property rights.

On March 9, 2025, the Board approved a one-time grant under the Incentive Plan of $360,000 of RSUs to Dr. Schütz, subject to a maximum of 120,000 RSUs, which shall have a grant date of the second full trading day after the release of the Company’s financial results for the quarter and fiscal year ended December 31, 2024, with one-fourth of the RSUs shall vest on each of the first, second, third and fourth anniversaries of the effective date of grant, subject to continuous service through the applicable vesting date.

Andrea James

Ms. James, our Chief Financial Officer, entered into an employment agreement with the Company (the “James Employment Agreement”), effective June 17, 2024. Pursuant to the terms of the James Employment Agreement, Ms. James will receive an initial annual base salary of $325,000 (such annual base salary, as may be adjusted by the Board from time to time, the “Base Salary”) and will be eligible to receive an initial annual cash bonus, targeted at 50% of the Base Salary (such target, as may be adjusted by the Board from time to time, the “Annual Bonus”). On March 4, 2025, the Board approved an increase to the annual base salary of Andrea James from $325,000 to $341,250, effective March 10, 2025.

If Ms. James’s employment is terminated by the Company without Cause (as defined in the James Employment Agreement), or Ms. James resigns from the Company with Good Reason (as defined in the James Employment Agreement), the Company shall: (a) pay Ms. James all accrued but unpaid Base Salary and any vacation or paid time off accrued, (b) any vested benefits to which Ms. James or her estate may be entitled to under the Company’s benefit plan’s or applicable law, (c) an amount equal to 12-months of the Base Salary, (d) pay Ms. James an amount equal to a pro-rated portion of the Annual Bonus, (d) reimbursement for an amount equal to the monthly portion of the premium cost of participation in such group health plan that the Company paid for immediately prior to the date of termination for a period of up to 12 months, (e) with respect to each outstanding time-based equity award, if any, accelerated vesting of the next trench of time-based equity that would have vested had Ms. James remained employed through the next applicable vesting date, and (f) with respect to the Performance Equity Award (as defined below), accelerated time vesting of any options that are performance vested as of the date of termination.

In connection with Ms. James’ appointment as Chief Financial Officer, the Board approved the following grants to Ms. James: (a) an Option (as defined in the Incentive Plan) to purchase 200,000 shares of the Company’s Common Stock (the “Stock Option Grant”), and (b) an award of 100,000 Restricted Stock Units (as defined in the Incentive Plan) (the “Performance Equity Grant”). Both the Stock Option Grant and the Performance Equity Grant was subject to stockholder approval of an amendment to the Incentive Plan, increasing the total number of shares of Common Stock available for grant of awards under the Incentive Plan, which was obtained on October 11, 2024.

On March 4, 2025, the Board approved a one-time bonus of $25,000 to Ms. James to be paid in cash or RSUs under the Incentive Plan, at the discretion of Ms. James, in recognition of her achievements and contributions to the Company since becoming Chief Financial Officer of the Company in June 2024. If Ms. James elects to receive such bonus in RSUs, such RSUs shall (i) have a grant date of the second full trading day after the release of the Company’s financial results for the quarter and fiscal year ended December 31, 2024, and (ii) vest immediately on the effective date of grant.

On March 9, 2025, the Board approved a one-time grant under the Incentive Plan of $360,000 of RSUs to Ms. James, subject to a maximum of 120,000 RSUs, which shall have a grant date of the second full trading day after the release of the Company’s financial results for the quarter and fiscal year ended December 31, 2024, with one-fourth of the RSUs shall vest on each of the first, second, third and fourth anniversaries of the effective date of grant, subject to continuous service through the applicable vesting date.

Outstanding Equity Awards at 2024 Fiscal Year End

The following table summarizes certain information concerning stock options and other equity awards granted by us under the Option Plan and the Incentive Plan held as of December 31, 2024, by our Named Executive Officers:

(1)

Except as otherwise indicated below, one quarter of the options shall vest upon completion of 12 full months of continuous employment measured from the date of grant, and the balance of the options will vest in 36 equal monthly installments commencing on the first anniversary of the date of grant, based upon the completion of each month of continuous employment.

(2)

The date of grant was July 22, 2020.

(3)

The date of grant was February 25, 2021.

(4)

The date of grant was March 24, 2022.

(5)

The date of grant was May 3, 2022.

(6)

The options vested on December 7, 2023.

(7)

(8)

The date of grant was February 24, 2023.

(9)

The date of grant was June 9, 2023.

(10)

The date of grant was August 15, 2023. The options vest subject to the achievement by Oncocyte of pre-defined product and regulatory goals.

(11)

(12)

The date of grant was June 20, 2024.

(13)

The date of grant was June 20, 2024. The RSUs vest subject to the achievement by Oncocyte of pre-defined goals related to market capitalization.

(14)

The date of grant was March 15, 2022.

(15)

The date of grant was March 24, 2022.

(16)

The date of grant was September 20, 2022.

(17)

(18)

The date of grant was October 10, 2023.

(19)

(20)

The date of grant was April 16, 2021.

(21)

The date of grant was March 15, 2022.

(22)

The options vest subject to the achievement by Oncocyte of pre-defined product and regulatory goals in 2022. 50% of the options vested on December 31, 2023, and the remaining options were cancelled.

(23)

(24)

The date of grant was February 24, 2023.

(25)

The options vest subject to the achievement by Oncocyte of pre-defined product and regulatory goals.

(26)

The Oncocyte Corporation 2018 Equity Incentive Plan

The Incentive Plan was approved by our stockholders on August 27, 2018 (the “Effective Date”) for an aggregate of 250,000 shares of common stock, as adjusted for the Company’s 1-for-20 reverse stock split effective on July 24, 2023 (the “Reverse Stock Split”). On July 17, 2019, our stockholders approved the first Amendment to the Incentive Plan to increase the total number of shares of common stock issuable under the Incentive Plan to a total of 550,000 shares of common stock (as adjusted for the Reverse Stock Split). On July 24, 2021, our stockholders approved the second Amendment to the Incentive Plan to increase the total number of shares of common stock issuable under the Incentive Plan to a total of 1,050,000 shares of common stock (as adjusted for the Reverse Stock Split). On October 11, 2024, our stockholders approved an amendment and restatement of the Incentive Plan, to among other things, to increase the total number of shares of common stock issuable under the Incentive Plan to 2,300,000 shares of common stock.

As of March 17, 2025, we had 1,031,165 shares of common stock available for future issuance under the Incentive Plan.

We have adopted the Incentive Plan that permits us to grant awards, consisting of stock options, the grant or sale of restricted stock (“Restricted Stock”), the grant of stock appreciation rights (“SARs”), and the grant of restricted stock units (“RSUs”), for up to a total of 2,300,000 shares of our common stock. The Incentive Plan also permits Oncocyte to issue such other securities as our Board or the Compensation Committee administering the Incentive Plan may determine. Awards of stock options, Restricted Stock, SARs, and RSUs (“Awards”) may be granted under the Incentive Plan to Oncocyte employees, directors, and consultants. The purposes of the Incentive Plan are to (a) enable the Company to attract and retain the types of employees, consultants and directors who will contribute to the Company’s long-range success; (b) provide incentives that align the interests of employees, consultants and directors with those of the shareholders of the Company; and (c) promote the success of the Company’s business.

Awards may vest and thereby become exercisable or have restrictions on forfeiture lapse on the date of grant or in periodic installments or upon the attainment of performance goals, or upon the occurrence of specified events. Vesting of an Award after the date of grant may be accelerated only in the limited circumstances specified in the Incentive Plan. In the case of the acceleration of vesting of any performance-based Award, acceleration of vesting shall be limited to actual performance achieved, pro rata achievement of the performance goal(s) on the basis for the elapsed portion of the performance period, or a combination of actual and pro rata achievement of performance goals.

No Awards may be granted under the Incentive Plan more than ten years after the date upon which the Incentive Plan was adopted by our Board, and no options or SARs granted under the Incentive Plan may be exercised after the expiration of ten years from the date of grant.

Subject to the terms of the Incentive Plan, the Incentive Plan shall be administered by the Board or such committee of the Board as is designated by the Board to administer the Plan (the “Committee”). Membership on the Committee shall be limited to “non-employee directors” in accordance with Rule 16b-3 under the Securities Exchange Act of 1934, as amended. The Committee may delegate certain duties to one or more officers of the Company as provided in the Incentive Plan. The Committee will determine the persons to whom awards are to be made, determine the type, size and terms of awards, construe and interpret the Incentive Plan, and exercise it discretion to make any other determinations that it believes necessary for the administration of the Incentive Plan.

Stock Options

Options granted under the Incentive Plan may be either “incentive stock options” within the meaning of Section 422(b) of the Internal Revenue Code of 1986, as amended (the “Code”), or “non-qualified” stock options that do not qualify incentive stock options. Incentive stock options may be granted only to our employees and employees of our subsidiaries. The exercise price of stock options granted under the Incentive Plan must be equal to the fair market of our common stock on the date the option is granted. In the case of an optionee who, at the time of grant, owns more than 10% of the combined voting power of all classes of our capital stock, the exercise price of any incentive stock option must be at least 110% of the fair market value of our common stock on the grant date, and the term of the option may be no longer than five years. The aggregate fair market value of our common stock (determined as of the grant date of the option) with respect to which incentive stock options become exercisable for the first time by an optionee in any calendar year may not exceed $100,000.

The exercise price of an option may be payable in cash or in shares of our common stock having a fair market value equal to the exercise price, or in a combination of cash and common stock, or other legal consideration for the issuance of stock as our Board or the Committee may approve.

Generally, options will be exercisable only while the optionee remains an employee, director or consultant, or during a specific period thereafter, but in the case of the termination of an employee, director, or consultant’s services due to death or disability, the period for exercising a vested option shall be extended to the earlier of 12 months after termination or the expiration date of the option.

Restricted Stock and Restricted Stock Units

In lieu of granting options, we may enter into purchase agreements with employees under which they may purchase or otherwise acquire RSUs subject to such vesting, transfer, and repurchase terms, and other restrictions. The price at which Restricted Stock may be issued or sold will be not less than 100% of fair market value. Employees or consultants, but not executive officers or directors, who purchase Restricted Stock may be permitted to pay for their shares by delivering a promissory note or an installment payment agreement that may be secured by a pledge of their Restricted Stock. Restricted Stock may also be issued for services actually performed by the recipient prior to the issuance of the Restricted Stock. Unvested Restricted Stock for which we have not received payment may be forfeited, or we may have the right to repurchase unvested shares upon the occurrence of specified events, such as termination of employment.

Subject to the restrictions set with respect to the particular Award, a recipient of Restricted Stock generally shall have the rights and privileges of a stockholder upon vesting, including the right to vote the Restricted Stock and the right to receive dividends; provided that, any cash dividends and stock dividends with respect to the Restricted Stock shall be withheld for the recipient’s account, and interest may be credited on the amount of the cash dividends withheld. The cash dividends or stock dividends so withheld and attributable to any particular share of Restricted Stock (and earnings thereon, if applicable) shall be distributed to the recipient in cash or, at the discretion of our Board or the Committee, in shares of our common stock having a fair market value equal to the amount of such dividends, if applicable, upon the release of restrictions on the Restricted Stock and, if the Restricted Stock is forfeited, the recipient shall have no right to the dividends.

The terms and conditions of a grant of RSUs shall be determined by our Board or the Committee. No shares of our common stock shall be issued at the time an RSU is granted. A recipient of RSUs shall have no voting rights with respect to the RSUs. Upon the expiration of the restrictions applicable to an RSU, we will either issue to the recipient, without charge, one share of our common stock per RSU or cash in an amount equal to the fair market value of one share of our common stock.

At the discretion of our Board or the Committee, each RSU (representing one share of our common stock) may be credited with cash and stock dividends paid in respect of one share (“Dividend Equivalents”). Dividend Equivalents shall be withheld for the recipient’s account, and interest may be credited on the amount of cash Dividend Equivalents withheld. Dividend Equivalents credited to a recipient’s account and attributable to any particular RSU (and earnings thereon, if applicable) shall be distributed in cash or in shares of our common stock having a fair market value equal to the amount of the Dividend Equivalents and earnings, if applicable, upon settlement of the RSU. If a RSU is forfeited, the recipient shall have no right to the related Dividend Equivalents.

SARs

An SAR is the right to receive, upon exercise, an amount payable in cash or shares, or a combination of shares and cash, equal to the number of shares subject to the SAR that is being exercised, multiplied by the excess of (a) the fair market value of a common share on the date the SAR is exercised, over (b) the exercise price specified in the SAR Award agreement. SARs may be granted either as free-standing SARs or in tandem with options. No SAR may be exercised later than 10 years after the date of grant.

The exercise price of an SAR shall not be less than 100% of the fair market value of one share of common stock on the date of grant. An SAR granted in conjunction with an option shall have the same exercise price as the related option, shall be transferable only upon the same terms and conditions as the related option, and shall be exercisable only to the same extent as the related option; provided, however, that the SAR by its terms shall be exercisable only when the fair market value per share exceeds the exercise price per share of the SAR or related option. Upon any exercise of an SAR granted in tandem with an option, the number of shares for which the related option shall be exercisable shall be reduced by the number of shares for which the SAR has been exercised. The number of shares for which an SAR issued in tandem with an option shall be exercisable shall be reduced by the number of shares for which the related option has been exercised.

Stock Appreciation Rights

A Stock Appreciation Right (or SAR) is the right to receive, upon exercise, an amount payable in cash or shares, or a combination of shares and cash, equal to the number of shares subject to the SAR that is being exercised, multiplied by the excess of (a) the fair market value of a share of our common stock on the date the SAR is exercised, over (b) the exercise price specified in the award agreement related to the SAR. SARs may be granted either as free-standing SARs or in tandem with options. No SAR may be exercised later than 10 years after the date of grant.

The exercise price of an SAR shall not be less than 100% of the fair market value of one share of our common stock on the date of grant. An SAR granted in conjunction with an option shall have the same exercise price as the related option, shall be transferable only upon the same terms and conditions as the related option, and shall be exercisable only to the same extent as the related option; provided, however, that the SAR by its terms shall be exercisable only when the fair market value per share exceeds the exercise price per share of the SAR or related option. Upon any exercise of an SAR granted in tandem with an option, the number of shares for which the related option shall be exercisable shall be reduced by the number of shares for which the SAR has been exercised. The number of shares for which an SAR issued in tandem with an option shall be exercisable shall be reduced by the number of shares for which the related option has been exercised.

Repricing Prohibition

The Incentive Plan prohibits any modification of the purchase price or exercise price of an outstanding option or other Award if the change would effect a “repricing’ without stockholder approval. As defined in the Incentive Plan, “repricing” means a reduction in the exercise price of an outstanding option or SAR or cancellation of an “underwater” or “out-of-the-money” Award in exchange for other Awards or cash. An “underwater” or “out-of-the-money” Award is defined to mean an Award for which the exercise price is less than the “fair market value” of our common stock. The fair market value is generally determined by the closing price per share of our common stock on The Nasdaq Stock Market LLC or any other national securities exchange or inter-dealer quotation system on which our common stock is traded.

Share Recycling

Shares subject to an Award shall that is canceled, forfeited or expires prior to exercise or realization, either in full or in part, shall again be made available for issuance or delivery under the Incentive Plan. This provision is designed to limit the number of shares that Oncocyte asks for, and incentivize the company to be prudent in its management of both employees and shares.

Adjustments Upon Changes in Stock

In the event of changes in the outstanding common stock or in the capital structure of the Company by reason of any stock or extraordinary cash dividend, stock split, reverse stock split, an extraordinary corporate transaction such as any recapitalization, reorganization, merger, consolidation, combination, exchange, or other relevant change in capitalization occurring after the grant date of any award, awards granted under the Incentive Plan and any award agreements, including the exercise price of stock options and Stock Appreciation Rights and the number of shares of common stock subject to such stock options, Stock Appreciation Rights, or stock awards, the maximum number of shares of common stock subject to all awards available under the Incentive Plan, and the maximum number of shares of common stock with respect to which any one person may be granted awards during any period under the Incentive Plan will be equitably adjusted or substituted, as to the number, price or kind of a share of common stock or other consideration subject to such awards to the extent necessary to preserve the economic intent of such award.

Term

The Incentive Plan will terminate automatically on July 2, 2028, which is ten years from the date the Incentive Plan was originally approved by our Board. No Award shall be granted pursuant to the Incentive Plan after such date, but Awards theretofore granted may extend beyond that date.

Amendment of Plan

The Board at any time, and from time to time, may amend or terminate the Incentive Plan. However, except with respect to adjustments upon changes in common stock and subject to applicable law, no amendment shall be effective unless approved by the shareholders of the Company to the extent shareholder approval is necessary to satisfy any applicable laws.

Clawback

Notwithstanding any other provisions in the Incentive Plan, any award which is subject to recovery under any law, government regulation or stock exchange listing requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation or stock exchange listing requirement (or any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement).

Federal Income Tax Consequence of Participation in the Incentive Plan

The following is a brief summary of certain federal income tax consequences relating to the transactions described under the Incentive Plan as set forth below. This summary does not purport to address all aspects of federal income taxation and does not describe any potential state, local, or foreign tax consequences. This discussion is based upon provisions of the Code and the applicable treasury regulations issued thereunder, and judicial and administrative interpretations under the Code and treasury regulations, all as in effect as of the date hereof, and all of which are subject to change (possibly on a retroactive basis) or different interpretation.

Laws Affecting Deferred Compensation

In 2004, Section 409A was added to the Code to regulate all types of deferred compensation. If the requirements of Section 409A of the Code are not satisfied, deferred compensation and earnings thereon will be subject to tax as it vests, plus an interest charge at the underpayment rate plus 1% and a 20% penalty tax. Certain performance awards, stock options, SARs, restricted stock units, and certain types of restricted stock are subject to Section 409A of the Code.

Incentive Stock Options

Under Section 422(a) of the Code, the grant and exercise of an incentive stock option pursuant to the Incentive Plan is entitled to the benefits of Section 421(a) of the Code. Under Section 421(a), an optionee will not be required to recognize income at the time the option is granted or at the time the option is exercised, except to the extent that the optionee is subject to the alternative minimum tax. If the applicable holding periods described below are met, when the shares of stock received upon exercise of an incentive stock option are sold or otherwise disposed of in a taxable transaction, the option holder will recognize compensation income (taxed as a long-term capital gain), for the taxable year in which disposition occurs, in an amount equal to the excess of the fair market value of our common stock at the time of such disposition over the amount paid for the shares.

We will not be entitled to any business expense deduction with respect to the grant or exercise of an incentive stock option, except in connection with a disqualifying disposition as discussed below. No portion of the amount received by the optionee upon the sale of our common stock acquired through the exercise of an incentive stock option will be subject to withholding for federal income taxes, or be subject to FICA or state disability taxes, except in connection with a disqualifying disposition.

In order for a participant to receive the favorable tax treatment provided in Section 421(a) of the Code, Section 422 requires that the participant make no disposition of the option shares within two years from the date the option was granted, nor within one year from the date the option was exercised and the shares were transferred to the participant. In addition, the participant must, with certain exceptions for death or disability, be an employee of Oncocyte (or of a parent or subsidiary of Oncocyte, as defined in Section 424(e) and (f) of the Code, or a corporation, or parent or subsidiary thereof, issuing or assuming the option in a merger or other corporate reorganization transaction to which Section 424(a) of the Code applies) at all times within the period beginning on the date of the grant of the option and ending on a date within three months before the date of exercise. In the event of the death of the participant, the holding periods will not apply to a disposition of the option or option shares by the participant’s estate or by persons receiving the option or shares under the participant’s will or by intestate succession.

If a participant disposes of stock acquired pursuant to the exercise of an incentive stock option before the expiration of the holding period requirements set forth above, the participant will realize, at the time of the disposition, ordinary income to the extent the fair market value of our common stock on the date the shares were purchased exceeded the purchase price. The difference between the fair market value of our common stock on the date the shares were purchased and the amount realized on disposition is treated as long-term or short-term capital gain or loss, depending on the participant’s holding period of the shares of our common stock. The amount treated as ordinary income may be subject to the income tax withholding requirements of the Code and FICA withholding requirements. The participant will be required to reimburse us, either directly or through payroll deduction, for all withholding taxes that we are required to pay on behalf of the participant. At the time of the disposition, we will be allowed a corresponding business expense deduction under Section 162 of the Code to the extent of the amount of the participant’s ordinary income. We may adopt procedures to assist us in identifying such deductions, and may require a participant to notify us of his or her intention to dispose of any such shares.

Regardless of whether a participant satisfies the requisite holding period for his or her option and shares, the participant may be subject to the alternative minimum tax with respect to the amount by which the fair market value of our common stock acquired exceeded the exercise price of the option on the date of exercise.

Other Options

The Incentive Plan also permits us to grant options that do not qualify as incentive stock options. These “non-qualified” stock options may be granted to employees or non-employees, such as persons performing consulting or professional services for us. An Incentive Plan participant who receives a non-qualified option will not be taxed at the time of receipt of the option, provided that the option does not have an ascertainable value or an exercise price below fair market value of our common stock on the date of grant, but the participant will be taxed at the time the option is exercised.

The amount of taxable income that will be earned upon exercise of a non-qualified option will be the difference between the fair market value of our common stock on the date of the exercise and the exercise price of the option. We will be allowed a business expense deduction to the extent of the amount of the participant’s taxable income recognized upon the exercise of a non-qualified option. Because the option holder is subject to tax immediately upon exercise of the option, there are no applicable holding periods for the stock. The option holder’s tax basis in our common stock purchased through the exercise of a non-qualified option will be equal to the exercise price paid for the stock plus the amount of taxable gain recognized upon the exercise of the option. The option holder may be subject to additional tax on sale of the stock if the price realized exceeds his or her tax basis.

SARs; Restricted Stock; and RSUs

A recipient of an SAR will not recognize taxable income upon the grant of the SAR. The recipient of the SAR will recognize ordinary income upon exercise of the SAR in an amount equal to the difference between the fair market value of the shares and the exercise price on the date of exercise. Any gain or loss recognized upon any later disposition of the shares generally will be a capital gain or loss.

A recipient of a Restricted Stock Award will not have taxable income upon the grant, unless the Restricted Stock is then vested, or unless the recipient elects under Section 83(b) of the Code to be taxed at the time of grant. Otherwise, upon vesting of the shares, the recipient will recognize ordinary income equal to the fair market value of the shares at the time of vesting less the amount paid for such shares, if any. Any gain or loss recognized upon any later disposition of the shares generally will be a capital gain or loss.

A recipient of an RSU does not recognize taxable income when the Award is granted. When a vested RSU (and dividend equivalents, if any) is settled and distributed, the participant will recognize ordinary income equal to the amount of cash or the fair market value of shares received, less the amount paid for the RSU, if any.

Federal Tax Withholding

Any ordinary income realized by a participant upon the granting, vesting, exercise, or conversion of an award under the Incentive Plan, as applicable, is subject to withholding of applicable federal, state, and local income tax and to withholding of the participant’s share of any tax under the Federal Insurance Contribution Act and the Federal Unemployment Tax Act. To satisfy our federal income tax withholding requirements, we will have the right to require, as a condition to delivery of any certificate for shares of our common stock or the registration of the shares in the participant’s name, that the participant remit to us an amount sufficient to satisfy those withholding requirements. Alternatively, we may withhold a portion of the shares (valued at fair market value) that otherwise would be issued to the participant to satisfy all or part of the withholding tax obligations or may, if we consent, accept delivery of shares (that the participant has not acquired from us within six months prior to the date of exercise) with an aggregate fair market value that equals or exceeds the required tax withholding payment. Withholding does not represent an increase in the participant’s total income tax obligation since it is fully credited toward his or her tax liability for the year. Additionally, withholding does not affect the participant’s tax basis in the shares. Compensation income realized and tax withheld will be reflected on Forms W-2 supplied by the Company to employees no later than January 31 of the succeeding year. Deferred compensation that is subject to Section 409A of the Code will be subject to certain federal income tax withholding and reporting requirements.

Tax Consequences to the Company

To the extent that a participant recognizes ordinary income in the circumstances described above, we will be entitled to a corresponding deduction provided that, among other things, the income meets the test of reasonableness, is an ordinary and necessary business expense, is not an “excess parachute payment” within the meaning of Section 280G of the Code, and is not disallowed by the $1,000,000 limitation on certain executive compensation under Section 162(m) of the Code discussed below. While deductibility of executive compensation for federal income tax purposes is among the factors the Board and Committee considers when structuring executive compensation arrangements, it is not the sole or primary factor considered. The Company retains the flexibility to authorize compensation that may not be deductible if we believe it is in the best interests of the Company.

Million Dollar Deduction Limit and Other Tax Matters

We may not deduct compensation of more than $1,000,000 that is paid to “covered employees” (as defined in Section 162(m) of the Code), which include (i) an individual (or, in certain circumstances, his or her beneficiaries) who, at any time during the taxable year, is either our principal executive officer or principal financial officer; (ii) an individual who is among our three highest compensated officers for the taxable year (other than an individual who was either our principal executive officer or principal financial officer at any time during the taxable year); or (iii) anyone who was a covered employee for purposes of Section 162(m) of the Code for any tax year beginning on or after January 1, 2017. This limitation on deductions (x) only applies to compensation paid by a publicly-traded corporation (and not compensation paid by non-corporate entities) and (z) may not apply to certain types of compensation, such as qualified performance-based compensation that is payable pursuant to a written, binding contract that was in effect as of November 2, 2017, so long as the contract is not materially modified after that date.

To the extent that compensation is payable pursuant to a prior plan award granted on or before November 2, 2017, and if the Company determines that Section 162(m) of the Code will apply to any such awards, the Company intends that the terms of those awards will not be materially modified and will be constructed so as to constitute qualified performance-based compensation and, as such, will be exempt from the $1,000,000 limitation on deductible compensation.

If an individual’s rights under the Incentive Plan are accelerated as a result of a change in control and the individual is a “disqualified individual” under Section 280G of the Code, then the value of any such accelerated rights received by such individual may be included in determining whether or not such individual has received an “excess parachute payment” under Section 280G of the Code, which could result in (i) the imposition of a 20% federal excise tax (in addition to federal income tax) payable by the individual on the value of such accelerated rights, and (ii) the loss by us of a corresponding compensation deduction on such amounts.

Employment Benefits Plans

401(k) Plan

The Company has a defined contribution retirement plan in which all employees are eligible to participate. This plan is intended to qualify under Section 401(k) of the Code so that contributions by employees and by the Company to the plan and income earned on plan contributions are not taxable to employees until withdrawn or distributed from the plan, and so that contributions, including employee salary deferral contributions, will be deductible by the Company when made. The Company currently provides contributions under this plan based on the employee’s compensation, subject to statutory limits.

Director Compensation Program

Directors and members of committees of our Board who are salaried employees of Oncocyte are entitled to receive compensation as employees but are not compensated for serving as directors or attending meetings of our Board or committees of our Board. All directors are entitled to reimbursements for their out-of-pocket expenses incurred in attending meetings of our Board or committees of our Board.

In 2024, non-employee directors, other than the Chairman of our Board, received an annual fee of $77,177 in cash for their service on our Board for the full year. Our Chairman received an annual cash fee of $87,177 for his service as Chairman of the Board and for his service on our Board. In addition to cash fees, non-employee directors received options to purchase 30,000 shares of common stock under the Incentive Plan and no restricted stock units under the Incentive Plan. Our Chairman received options to purchase an additional 50,000 shares of common stock under the Incentive Plan and no additional restricted stock units under the Incentive Plan.

Fees earned or paid in cash are paid in quarterly installments, and the stock options and restricted stock units will vest one year from the date of grant, subject to the non-employee director’s continued service as a director of Oncocyte or a subsidiary from the date of grant until the vesting date or, if earlier, until the next annual meeting of shareholders. The options will expire if not exercised ten years from the date of grant.

The following table summarizes certain information concerning the compensation paid during the past fiscal year to each of the persons who served as directors during the year ended December 31, 2024, and who were not our employees on the date the compensation was earned.

(1)

Equity awards granted will vest and become exercisable one year from the date of grant, subject to the non-employee director’s continued service as a director of Oncocyte or a subsidiary from the date of grant until the vesting date or, if earlier, until the next annual meeting of shareholders, but must be reported here at the aggregate grant date fair value, as if all options were fully vested and exercisable at the date of grant. Values are computed in accordance with FASB Accounting Standards Codification (ASC) Topic 718, Compensation - Stock Compensation. We used the Black-Scholes Pricing Model to compute option fair values based on applicable exercise and stock prices, an expected option term, volatility assumptions, and risk-free interest rates.

(2)

Mr. Kingsley no longer serves on the Board as of April 25, 2024, because he unexpectedly passed away.