Form 20-F ONCOLYTICS BIOTECH INC For: Dec 31

March 5, 2021 3:05 PM EST

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EXHIBIT 2.1

DESCRIPTION OF RIGHTS OF SECURITIES REGISTERED UNDER SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
Our authorized capital consists of an unlimited number of Common Shares. The following is a summary of the provisions attached to our Common Shares:
The holders of our Common Shares are entitled to one vote per share at meetings of shareholders, to receive such dividends as declared by the Board and to receive our remaining property and assets upon dissolution or wind up. Our Common Shares are not subject to any future call or assessment and there are no pre-emptive, conversion or redemption rights attached to such shares. As at March 4, 2021, we have 52,083,924 Common Shares issued and outstanding. After giving effect to the exercise or distribution of all outstanding options to acquire Common Shares, all outstanding share awards granted under the Corporation’s Incentive Share Award Plan and Common Share purchase warrants, we would have 57,804,242 Common Shares issued and outstanding. As at March 4, 2021, we have 16,443,500 (exercisable into 1,730,894 common shares) Common Share purchase warrants issued in 2017 (the “2017 Warrants”) and 110,572 Common Share purchase warrants issued in 2019 (the “2019 Warrants”) outstanding. 9.5 2017 Warrant entitles the holder to purchase one Common Share until June 1, 2022, at an exercise price of $9.05. The 2017 Warrants are subject to acceleration if the volume weighted average price of the Common Shares equals or exceeds $23.75 for a period of 15 consecutive trading dates. Each 2019 Warrant entitles the holder to purchase one Common Share until August 16, 2024, at an exercise price of US$0.90.

EXHIBIT 4.12
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (“Agreement”), effective August 3, 2020 (“Effective Date”), is made between Oncolytics Biotech (U.S.), Inc., (“Employer” or the “Company”), and Thomas C. Heineman, M.D., Ph.D. (“Employee”). Employee and the Company are sometimes referred to herein as the “Parties.”
RECITALS
A.Employer is in the business (the “Business”) of developing pharmaceutical products.
B.Employer desires to obtain the services of Employee as its Global Head of Clinical Development and Operations, in which capacity Employee has access to Employer’s Confidential Information (as hereinafter defined), and to obtain assurance that Employee will protect Employer’s Confidential Information during the term of employment and for a reasonable period of time after termination of employment pursuant to this Agreement, and Employee is willing to agree to these terms.
C.Employee desires to be assured of the salary, bonus opportunity and other benefits in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants in this Agreement, and other good and valuable consideration, the parties agree as follows:
a.Employment. Employer hereby employs Employee, and Employee agrees to be employed as Global Head of Clinical Development and Operations. Employee will perform the duties of Global Head of Clinical Development and Operations for Employer, its parent corporation, Oncolytics Biotech Inc. and other affiliated corporations. Employee will report initially to the President of Employer. Changes may be made from time to time by Employer in its sole discretion to the duties, reporting relationships and title of Employee. Employee will devote full time and attention to the duties on Exhibit A to this Agreement. Notwithstanding the foregoing, Employee may, with the written approval of the President of the Employer, undertake consulting work, whether personally or through a corporation controlled by Employee, provided that such consulting work does not interfere with or conflict with the performance of Employee’s duties and obligations under this Agreement. Employee will comply with all rules, policies and procedures of Employer as modified from time to time, including without limitation, rules and procedures set forth in the Employer’s Employee Handbook and Company Policy Manual. Employee will perform all of Employee’s responsibilities in compliance with all applicable laws and will ensure that the operations that Employee manages are in compliance with all applicable laws. During Employee’s employment, Employee will not engage in any other business activity which, in the reasonable judgment of the President of Employer, conflicts with
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the duties of Employee under this Agreement, whether or not such activity is pursued for gain, profit or other pecuniary advantage.
b.Term of Employment. The term of employment (“Term”) will not be for a definite period, but rather continue indefinitely until terminated in accordance with the terms and conditions of this Agreement. The first 6 months following the Effective Date will be a probation period (the “Probation Period”). Not less than 2 weeks prior to the end of the Probation Period, Employer will notify Employee in writing either that Employee’s employment is being continued or that Employee’s employment is being terminated at the completion of the Probation Period.
c.Compensation. For the duration of Employee’s employment under this Agreement, the Employee will be entitled to compensation which will be computed and paid pursuant to the following subparagraphs.
i.Base Salary. Employer will pay to Employee a base salary (“Base Salary”) at an annual rate of $400,000, payable in equal installments on the fifteenth and last day of each month, subject to withholdings and deductions as required or permitted by law. Employee’s Base Salary will be reviewed annually by the President of Employer and may be adjusted in the sole discretion of Employer based on such review, but will not be reduced by Employer unless a material adverse change in the financial condition or operations of Employer has occurred or unless Employee’s responsibilities are altered to reflect less responsibility.
ii.Incentive Bonus. Employee will participate in Employer’s annual incentive bonus plan under which Employee may earn an annual incentive bonus. The terms of the annual incentive bonus plan, including the criteria upon which Employee can earn the maximum bonus, will be determined annually by Employer’s Board of Directors or its President if so delegated. For 2020, Employee may earn an annual incentive of up to 30% of Employee’s then Base Salary, pro-rated based on the portion of the year from the Effective Date to December 31, 2020. Employee may also participate in other bonus or incentive plans adopted by Employer that are applicable to Employee’s position, as they may be changed from time to time, but nothing herein shall require the adoption or maintenance of any such plan.
iii.Incentive Stock Options. Upon commencement of employment, Employer will grant to Employee an incentive stock option to purchase 70,000 shares of Employer's Common Stock. The Stock Options will be priced at the time of the grant with 50% vesting on the first anniversary of employment, 25% vesting on the second anniversary of employment and the remaining 25% vesting on the third anniversary of employment. All Stock Option are pursuant and subject to the Stock Plan and Incentive Share Award Plan ("the Plans") of Oncolytics Biotech Inc. attached together as Exhibit C to this agreement.
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d.Other Benefits.
i.Certain Benefits. Employee will be eligible to participate in all employee benefit programs as outlined in Exhibit B.
ii.Vacations, Holidays and Expenses. For the duration of Employee’s employment hereunder, Employee will be provided such holidays and sick leave as Employer makes available to its management level employees generally. Employee will be entitled to 20 business days paid vacation per year of service and in addition to traditional U.S. holidays. Employer will reimburse Employee in accordance with company policies and procedures for reasonable expenses necessarily incurred in the performance of duties hereunder against appropriate receipts and vouchers indicating the specific business purpose for each such expenditure.
iii.Right of Set-off. By accepting this Agreement, Employee consents to a deduction from any amounts Employer owes Employee from time to time (including amounts owed to Employee as wages or other compensation, a bonus, fringe benefits, or vacation pay, as well as any other amounts owed to Employee by Employer), to the extent of the amounts Employee owes to Employer. Whether or not Employer elects to make any set-off in whole or in part, if Employer does not recover by means of set-off the full amount Employee owes it, calculated as set forth above, Employee agrees to pay immediately upon Employer’s demand, the unpaid balance to Employer.
e.Termination Or Discharge By Employer.
i.For Cause. Employer will have the right to immediately terminate Employee’s services and this Agreement for Cause. “Cause” means the Employer’s belief that any of the following has occurred:
(1)Employee’s breach of this Agreement by Employee, including, without limitation, breach of Employee’s covenants in Sections 7, 8, 9 and 10.
(2)Employee’s failure to perform Employee’s duties for the Company in a competent and effective manner as judged in good faith by either the Chief Executive Officer of the Company or the Company’s Board of Directors in their sole discretion. Employee shall be given written notice of Employee’s failure to perform Employee’s duties and 30 days in which to cure such failure. Employee shall be entitled to only one notice and cure opportunity over the course of Employee’s employment with the Company.
(3)Employee’s material violation of any statutory or common law duty of loyalty to Employer and its Affiliates.
(4)Employee’s commission of a felony.
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(5)Employer’s reasonable belief that Employee engaged in a violation of any statute, rule or regulation, any of which in the judgment of Employer is harmful to the Business or to Employer’s reputation.
(6)Employer’s reasonable belief that Employee engaged in unethical practices, dishonesty or disloyalty.
(7)Employer’s lack of funding sufficient to support Employee’s position.
Upon termination of Employee’s employment hereunder for Cause or upon the death or disability of Employee, Employee will have no rights to any unvested benefits or any other compensation or payments after the termination date or the last day of the month in which Employee’s death or disability occurred, respectively. For purposes of this Agreement, “disability” means the incapacity or inability of Employee, whether due to accident, sickness or otherwise, as determined by a medical doctor acceptable to the Board of Directors of Employer and confirmed in writing by such doctor, to perform the essential functions of Employee’s position under this Agreement, with or without reasonable accommodation (provided that no accommodation that imposes undue hardship on Employer will be required) for an aggregate of 90 days during any period of 180 consecutive days, or such longer period as may be required under applicable law.
ii.Without Cause. Employer may terminate Employee’s employment under this Agreement without Cause and without advance notice; provided, however, that Employer will continue to pay, as severance pay, Employee’s Base Salary at the rate in effect on the termination date through the date that is:
(1)if the Employee’s employment is terminated after the Employee has completed the Probation Period but prior to the first anniversary of the Effective Date, 1 month from the termination date;
(2)if the Employee’s employment is terminated after the first anniversary of the Effective Date but prior to the second anniversary of the Effective Date, 2 months from the termination date;
(3)if the Employee’s employment is terminated after the second anniversary of the Effective Date but prior to the fifth anniversary of the Effective Date, 4 months from the termination date;
(4)if the Employee’s employment is terminated after the fifth anniversary of the Effective Date, 6 months from the termination date;
provided, further, that Employer will be entitled to offset any severance pay otherwise payable to Employee by the amount of any compensation or consulting fees being paid to Employee by another party while severance pay would otherwise be payable. Employee shall only be entitled to such severance pay if Employee signs (and then Employee does not rescind, as may be permitted by law) a general release of claims in favor of Employer in a form acceptable to Employer, provided, however, that such
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release of claims shall only require Employee to release Employer from claims relating directly to Employee’s employment and the termination thereof, and shall not require Employee to release claims relating to vested employee benefits or relating to other matters, including, but not limited to, claims relating to his status as a shareholder of the Company. Such payments will be at usual and customary pay intervals of Employer and will be subject to all appropriate deductions and withholdings. Upon termination, Employee will have no rights to any unvested benefits or any other compensation or payments except as stated in this paragraph.
iii.Notwithstanding Section 5.2, if there is a change of control of Oncolytics Biotech Inc., as defined herein, and if this Agreement is terminated by Employer at any time within one (1) year following the change of control other than pursuant to Section 5.1, Employee shall be entitled to severance payment equal to the Employee’s Base Salary for 12 months. For the purposes of this Section 5.3, “change of control” means any amalgamation, merger or other corporate reorganization which results in any change in the present effective voting control of Oncolytics Biotech Inc., or will result in a change of the person or persons who own or control sufficient voting shares in Oncolytics Biotech Inc. to elect a majority of the directors of Oncolytics Biotech Inc., or will result in a person acquiring sufficient voting shares in Oncolytics Biotech Inc. to elect a majority of the directors of Oncolytics Biotech Inc.
f.Termination By Employee. Employee may terminate Employee’s employment under this Agreement for any reason provided that Employee gives Employer at least 30 days’ notice in writing. Employer may, at its option, accelerate such termination date to any date at least two weeks after Employee’s notice of termination. Employer may also, at its option, relieve Employee of all duties and authority after notice of termination has been provided. All compensation, payments and unvested benefits will cease on the termination date.
g.Delivery of Property.    Upon termination of this Agreement or upon request of the Company, Employee shall deliver to the Company all property, documents and materials pertaining to the Company’s Business including, but not limited to, memoranda, notes, records, drawings, manuals, disks, copies, representations, extracts, summaries and analyses, all inventory, demonstration units, and any other property, documents or media of the Company, and all equipment belonging to the Company, including but not limited to corporate cards, access cards, office keys, office equipment, laptop and desktop computers, cell phones and other wireless devices, thumb drives, zip drives and all other media storage devices.
h.Confidential Information. Employee recognizes that Employer’s Business and continued success depend upon the use and protection of confidential and proprietary business information, including, without limitation, the information and technology developed by or available through licenses to Employer, to which Employee has access (all such information being “Confidential Information”). For purposes of this Agreement, the phrase “Confidential Information” includes, for Employer and its current
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or future subsidiaries and affiliates, without limitation, and whether or not specifically designated as confidential or proprietary: all business plans and marketing strategies; information concerning existing and prospective markets and customers; financial information; information concerning the development of new products and services; information concerning any personnel of Employer (including, without limitation, skills and compensation information); and technical and non-technical data related to software programs, designs, specifications, compilations, inventions, improvements, methods, processes, procedures and techniques; provided, however, that the phrase does not include information that (a) was lawfully in Employee’s possession prior to disclosure of such information by Employer; (b) was, or at any time becomes, available in the public domain other than through a violation of this Agreement; (c) is documented by Employee as having been developed by Employee outside the scope of Employee’s employment and independently; or (d) is furnished to Employee by a third party not under an obligation of confidentiality to Employer. Employee agrees that during Employee’s employment and after termination of employment irrespective of cause, Employee will use Confidential Information only for the benefit of Employer and will not directly or indirectly use or divulge, or permit others to use or divulge, any Confidential Information for any reason, except as authorized by Employer. Employee’s obligation under this Agreement is in addition to any obligations Employee has under state or federal law. Employee agrees to deliver to Employer immediately upon termination of Employee’s employment, or at any time Employer so requests, all tangible items containing any Confidential Information (including, without limitation, all memoranda, photographs, records, reports, manuals, drawings, blueprints, prototypes, notes taken by or provided to Employee, and any other documents or items of a confidential nature belonging to Employer) whether in hard copy, electronic, or other format, together with all copies of such material in Employee’s possession or control. Employee agrees that in the course of Employee’s employment with Employer, Employee will not violate in any way the rights that any entity has with regard to trade secrets or proprietary or confidential information. Employee’s obligations under this Section 8 are indefinite in term and shall survive the termination of this Agreement. However, Employee further understands that nothing in this Agreement prohibits Employee from reporting to any governmental authority information concerning possible violations of law or regulation and that Employee may disclose Confidential Information to a government official or to an attorney and use it in certain court proceedings without fear of prosecution or liability, provided Employee files any document containing Confidential Information under seal and does not disclose the Confidential Information, except pursuant to court order.
i.Work Product and Copyrights. Employee agrees that all right, title and interest in and to the materials resulting from the performance of Employee’s duties at Employer and all copies thereof, including works in progress, in whatever media, (the “Work”), will be and remain in Employer upon their creation. Employee will mark all Work with Employer’s copyright or other proprietary notice as directed by Employer. Employee further agrees:
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i.To the extent that any portion of the Work constitutes a work protectable under the copyright laws of the United States (the “Copyright Law”), that all such Work will be considered a “work made for hire” as such term is used and defined in the Copyright Law, and that Employer will be considered the “author” of such portion of the Work and the sole and exclusive owner throughout the world of such copyright;
ii.If any portion of the Work does not qualify as a “work made for hire” as such term is used and defined in the Copyright Law, that Employee hereby assigns and agrees to assign to Employer, without further consideration, all right, title and interest in and to such Work or in any such portion of such Work and any copyright in such Work and further agrees to execute and deliver to Employer, upon request, appropriate assignments of such Work and copyright in such Work and such other documents and instruments as Employer may request to fully and completely assign such Work and copyright in such Work to Employer, its successors or nominees, and that Employee appoints Employer as attorney-in-fact to execute and deliver any such documents on Employee’s behalf in the event Employee should fail or refuse to do so within a reasonable period following Employer’s request;
iii.To waive and agree not to assert any moral rights Employee may have or acquire in any Inventions and agree to provide written waivers from time to time as requested by Employer; and
iv.Assist Employer (at Employer’s expense) in obtaining and maintaining copyright registrations with respect to such Works.
j.Inventions and Patents. For purposes of this Agreement, “Inventions” includes, without limitation, information, inventions, contributions, improvements, ideas, or discoveries, whether protectable or not, and whether or not conceived or made during work hours. Employee agrees that all Inventions conceived or made by Employee during the period of employment with Employer belong to Employer, provided they grow out of Employee’s work with Employer or are related in some manner to the Business, including, without limitation, research and product development, and projected business of Employer or its affiliated companies. Accordingly, Employee will:
i.Make adequate written records of such Inventions, which records will be Employer’s property;
ii.Assign to Employer, at its request, and does hereby assign to Employer, any rights Employee may have to such Inventions for the U.S. and all foreign countries; and
iii.Assist Employer (at Employer’s expense) in obtaining and maintaining patents registrations with respect to such Inventions.
Employee further agrees that Employee will promptly disclose in writing to Employer during the term of Employee’s employment and for 1 year thereafter, all
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Inventions whether developed during the time of such employment or thereafter (whether or not Employer has rights in such Inventions) so that Employee’s rights and Employer’s rights in such Inventions can be determined. Except as set forth on the initialed Exhibit D (List of Inventions) to this Agreement, if any, Employee represents and warrants that Employee has no Inventions, software, writings or other works of authorship useful to Employer in the normal course of the Business, which were conceived, made or written prior to the date of this Agreement and which are excluded from the operation of this Agreement.
NOTICE: This Section 10 does not apply to Inventions for which no equipment, supplies, facility, or trade secret information of Employer was used and which was developed entirely on Employee’s own time, unless: (a) the Invention relates (i) directly to the business of Employer or (ii) to Employer’s actual or demonstrably anticipated research or development, or (b) the Invention results from any work performed by Employee for Employer.
In accordance with California Labor Code Section 2870, Employee is notified that:
(a)     Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:
(1)     Relate at the time of conception or reduction to practice of the invention to the Employer’s Business, or actual or demonstrably anticipated research or development of the employer; or
(2)     Result from any work performed by the employee for the employer.
k.Remedies. Notwithstanding other provisions of this Agreement regarding dispute resolution, Employee agrees that Employee’s violation of any of Sections 7, 8, 9 or 10 of this Agreement would cause Employer irreparable harm which would not be adequately compensated by monetary damages and that an injunction may be granted by any court or courts having jurisdiction, restraining Employee from violation of the terms of this Agreement, upon any breach or threatened breach of Employee of the obligations set forth in any of Sections 7, 8, 9 or 10. The preceding sentence shall not be construed to limit Employer from any other relief or damages to which it may be entitled as a result of Employee’s breach of any provision of this Agreement, including Sections 7, 8, 9 or 10. Employee also agrees that a violation of any of Sections 7, 8, 9 or 10 would entitle Employer, in addition to all other remedies available at law or equity, to recover from Employee any and all funds, including, without limitation, wages, salary and profits, which will be held by Employee in constructive trust for Employer, received by Employee in connection with such violation.
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l.Dispute Resolution. Except for the right of Employer and Employee to seek injunctive relief in court, any controversy, claim or dispute of any type arising out of or relating to Employee’s employment or the provisions of this Agreement shall be resolved in accordance with this Section 12 regarding resolution of disputes, which will be the sole and exclusive procedure for the resolution of any disputes. This Agreement shall be enforced in accordance with the Federal Arbitration Act, the enforcement provisions of which are incorporated by this reference. Matters subject to these provisions include, without limitation, claims or disputes based on statute, contract, common law and tort and will include, for example, matters pertaining to termination, discrimination, harassment, compensation and benefits. Matters to be resolved under these procedures also include claims and disputes arising out of statutes such as the Fair Labor Standards Act, Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, and any state laws related to employment. Nothing in this provision is intended to restrict Employee from submitting any matter to an administrative agency with jurisdiction over such matter.
i.Mediation. Employer and Employee will make a good faith attempt to resolve any and all claims and disputes by submitting them to mediation in San Diego, California before resorting to arbitration or any other dispute resolution procedure. The mediation of any claim or dispute must be conducted in accordance with the then-current JAMS procedures for the resolution of employment disputes by mediation, by a mediator who has had both training and experience as a mediator of general employment and commercial matters. If the parties to this Agreement cannot agree on a mediator, then the mediator will be selected by JAMS in accordance with JAMS’ strike list method. Within thirty (30) days after the selection of the mediator, Employer and Employee and their respective attorneys will meet with the mediator for one mediation session of at least four hours. If the claim or dispute cannot be settled during such mediation session or mutually agreed continuation of the session, either Employer or Employee may give the mediator and the other party to the claim or dispute written notice declaring the end of the mediation process. All discussions connected with this mediation provision will be confidential and treated as compromise and settlement discussions. Nothing disclosed in such discussions, which is not independently discoverable, may be used for any purpose in any later proceeding. The mediator’s fees will be paid in equal portions by Employer and Employee, unless Employer agrees to pay all such fees.
ii.Arbitration. If any claim or dispute has not been resolved in accordance with Section 12.1, then the claim or dispute will be determined by arbitration in accordance with the then-current JAMS employment arbitration rules and procedures, except as modified herein. The arbitration will be conducted by a sole neutral arbitrator who has had both training and experience as an arbitrator of general employment and commercial matters and who is and for at least ten (10) years has been, a partner, a shareholder, or a member in a law firm. If Employer and Employee cannot agree on an arbitrator, then the arbitrator will be selected by JAMS in accordance with Rule 15 of the JAMS employment arbitration rules and procedures. No person who has served as a
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mediator under the mediation provision, however, may be selected as the arbitrator for the same claim or dispute. Reasonable discovery will be permitted and the arbitrator may decide any issue as to discovery. The arbitrator may decide any issue as to whether or as to the extent to which any dispute is subject to the dispute resolution provisions in Section 12 and the arbitrator may award any relief permitted by law. The arbitrator must base the arbitration award on the provisions of Section 12 and applicable law and must render the award in writing, including an explanation of the reasons for the award. Judgment upon the award may be entered by any court having jurisdiction of the matter, and the decision of the arbitrator will be final and binding. The statute of limitations applicable to the commencement of a lawsuit will apply to the commencement of an arbitration under Section 12.2. The arbitrator’s fees will be paid in equal portions by Employer and Employee, unless Employer agrees to pay all such fees.
m.Fees Related to Dispute Resolution. Unless otherwise agreed, the prevailing party will be entitled to its costs and attorneys’ fees incurred in any litigation or dispute relating to the interpretation or enforcement of this Agreement.
n.Disclosure. Employee agrees fully and completely to reveal the terms of this Agreement to any future employer or potential employer of Employee and authorizes Employer, at its election, to make such disclosure.
o.Representation of Employee. Employee represents and warrants to Employer that Employee is free to enter into this Agreement and has no contract, commitment, arrangement or understanding to or with any party that restrains or is in conflict with Employee’s performance of the covenants, services and duties provided for in this Agreement. Employee agrees to indemnify Employer and to hold it harmless against any and all liabilities or claims arising out of any unauthorized act or acts by Employee that, the foregoing representation and warranty to the contrary notwithstanding, are in violation, or constitute a breach, of any such contract, commitment, arrangement or understanding.
p.Conditions of Employment. Employer’s obligations to Employee under this Agreement are conditioned upon Employee’s timely compliance with requirements of the United States immigration laws.
q.Assignability. During Employee’s employment, this Agreement may not be assigned by either party without the written consent of the other; provided, however, that Employer may assign its rights and obligations under this Agreement without Employee’s consent to a successor by sale, merger or liquidation, if such successor carries on the Business substantially in the form in which it is being conducted at the time of the sale, merger or liquidation. This Agreement is binding upon Employee, Employee’s heirs, personal representatives and permitted assigns and on Employer, its successors and assigns.
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r.Notices. Any notices required or permitted to be given hereunder are sufficient if in writing and delivered by hand, by facsimile, by registered or certified mail, or by overnight courier, to Employee at 1011 Scarlett Way, Encinitas, California, 92024 or to the President of Employer at 4660 La Jolla Village Drive, Suite 850, San Diego, California, 92122 with a copy sent to Oncolytics Biotech Inc., 210, 1167 Kensington Crescent N.W, Calgary, Alberta, Canada T2N 1X7. Notices shall be deemed to have been given (i) upon delivery, if delivered by hand, (ii) seven days after mailing, if mailed, (iii) one business day after delivery, if delivered by courier, and (iv) one business day following receipt of an appropriate electronic confirmation, if by facsimile.
s.Severability. If any provision of this Agreement or compliance by any of the parties with any provision of this Agreement constitutes a violation of any law, or is or becomes unenforceable or void, then such provision, to the extent only that it is in violation of law, unenforceable or void, shall be deemed modified to the extent necessary so that it is no longer in violation of law, unenforceable or void, and such provision will be enforced to the fullest extent permitted by law. The Parties shall engage in good faith negotiations to modify and replace any provision which is declared invalid or unenforceable with a valid and enforceable provision, the economic effect of which comes as close as possible to that of the invalid or unenforceable provision which it replaces. If such modification is not possible, said provision, to the extent that it is in violation of law, unenforceable or void, shall be deemed severable from the remaining provisions of this Agreement, which provisions will remain binding on the parties.
t.Waivers. No failure on the part of either party to exercise, and no delay in exercising, any right or remedy hereunder will operate as a waiver thereof; nor will any single or partial waiver of a breach of any provision of this Agreement operate or be construed as a waiver of any subsequent breach; nor will any single or partial exercise of any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right or remedy granted hereby or by law.
u.Governing Law. Except as provided in Section 12 above, the validity, construction and performance of this Agreement shall be governed by the laws of the State of California without regard to the conflicts of law provisions of such laws. The courts of the state of California shall have exclusive jurisdiction of any lawsuit arising from or relating to Employee’s employment with, or termination from, Employer, or arising from or relating to this Agreement. Employee consents to such venue and personal jurisdiction.
v.409A Savings Clause. The parties intend that payments or benefits payable under this Agreement not be subject to the additional tax imposed pursuant to Section 409A of the Code (“Section 409A”), and the provisions of this Agreement shall be construed and administered in accordance with such intent. To the extent such potential payments or benefits could become subject to Section 409A, the parties shall cooperate to amend this Agreement with the goal of giving Executive the economic benefits described herein in a manner that does not result in such tax being imposed. If
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the parties are unable to agree on a mutually acceptable amendment, the Company may, without Executive’s consent and in such manner as it deems appropriate or desirable, amend or modify this Agreement or delay the payment of any amounts hereunder to the minimum extent necessary to meet the requirements of Section 409A.
w.Counterparts. This agreement may be executed in counterpart in different places, at different times and on different dates, and in that case all executed counterparts taken together collectively constitute a single binding agreement. Delivery of an executed counterpart signature hereof by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature.
x.Costs and Fees Related to Negotiation and Execution of Agreement. Each Party Shall be responsible for the payment of its own costs and expenses, including legal fees and expenses, in connection with the negotiation and execution of this Agreement. Neither Party will be liable for the payment of any commissions or compensation in the nature of finders' fees or brokers' fees, gratuity or other similar thing or amount in consideration of the other Party entering into this Agreement to any broker, agent or third party acting on behalf of the other Party.
y.Entire Agreement. This instrument contains the entire agreement of the parties with respect to the relationship between Employee and Employer and supersedes all prior agreements and understandings, and there are no other representations or agreements other than as stated in this Agreement related to the terms and conditions of Employee’s employment. This Agreement may be changed only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought, and any such modification will be signed by the President of Employer.
IN WITNESS WHEREOF, the parties have duly signed and delivered this Agreement as of the day and year first above written.
Oncolytics Biotech (U.S.), Inc.


By: /s/ Andrew de Guttadauro

Title: President


By: /s/ Gilles L. Gosselin

Title: Director


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EMPLOYEE


/s/ Thomas C. Heineman


Print Name: Thomas C. Heineman, M.D., Ph.D.





































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EXHIBIT A
INITIAL DUTIES AND RESPONSIBILITIES
The Employee shall have primary responsibility for the execution of the existing clinical trial strategy, contribute to the Company’s future clinical development strategy, and manage the clinical studies being conducted by or supported by the Company.

The Employee will manage operational and logistical tasks of clinical development to ensure efficient execution of trials, ensuring all activities occur in compliance with the appropriate regulations in the relevant jurisdictions. The Employee shall co-ordinate the efforts of internal and external resources to ensure quality and efficiency in patient recruitment, trial site selection and performance, for optimal execution of the clinical trial program. The Employee will also be expected to provide strategic opinions on the overall clinical development strategy.
Responsibilities:
Membership to the global team, contributing to the development of the clinical programs and decision making in relation to the clinical development strategy.
Applying a sound understanding of disease targets, market needs and regulatory issues in advising the clinical development pathways.
Assisting in defining the Company’s clinical development strategy and providing expert medical expertise and direction in its implementation, including acting as a medical monitor, thus ensuring the successful progression of the company’s products through clinical development.
Overseeing the planning, design, organization and conduct of clinical trials and ensuring the delivery of clinical development activities on time and on budget.
Ensuring that the company is accessing valuable expertise through external networks where appropriate, managing trials with appropriate use of CROs and building effective, long term relationships with appropriate KOLs.
Playing an appropriate part in business and corporate development, bringing drug development expertise to decision making and providing expert input to the strategic management of the company’s portfolio.
Maintaining current awareness of developments and competitor activity in the medical fields relevant to the company.
Provide day to day leadership and guidance to the clinical group on all operational issues and have managerial responsibility for their effectiveness.
Prepares manuscripts, posters, and other scientific communications and makes presentations at scientific meetings.
Coach, mentor, and develop the team to maximize resources.
Recommend training programs as appropriate and required.
Ensure clinical study reports, annual reports, investigator brochures, and other required reports are prepared in an accurate and timely manner.
Participate in the assessment and cost-effective management of external vendors, including CROs and CRAs
Develop, as required, and ensure compliance with all SOPs and applicable regulatory standards
Enhance the overall effectiveness of the clinical operations team
Participate in marketing application planning and execution
Perform other duties as assigned from time to time.

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EXHIBIT B
BENEFITS
Physical Fitness Benefit:
The Employee is entitled to the Physical Fitness Benefit in the amount of Seven Hundred and Fifty ($750.00) United States Dollars per annum to use towards an item or service that promotes physical activity; the details of which are outlined in the Company Policy Manual.

Deferred Compensation:
Employee shall, if qualified to do so, be entitled to allocate a portion of his salary to a 401(K) Plan established for the Employee, up to the prescribed maximum, and in accordance with the requirements thereof.
The employer will match the employee contribution up to 4% of the employee’s base salary or the annual compensation limit set by the IRS, whichever is lower.

Health Care Benefit:
Employee shall, if qualified to do so, be entitled to access the health care menu sponsored by the employer. The menu includes:
Plans for which the employer will contribute towards the premium at 100% for the employee and at 75% for the dependents:
Medical HMO for California based employees
Medical PPO
Medical HSA
Dental PPO
Vision PPO
Insurance contributed at 100% of the premium for:
Life Insurance and AD&D
Short Term Disability
Long Term Disability
Voluntary life insurance may be added for the employer and/or the dependents at the employee’s expense
Further details are outlined in the Enrollment Guide.
















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EXHIBIT C
STOCK OPTION PLAN AND INCENTIVE SHARE AWARD PLAN

AMENDED AND RESTATED STOCK OPTION PLAN

1. The Plan
The Board of Directors of Oncolytics Biotech Inc. (the “Corporation”) has adopted this Stock Option Plan (the “Plan”) governing the issuance of Options (as defined herein) of the Corporation to Eligible Persons (as defined herein).
2. Purpose
The purpose of this Plan is to advance the interests of the Corporation by encouraging the Directors, Officers, Employees and Consultants to acquire Shares, thereby (i) increasing the proprietary interests of such persons in the Corporation; (ii) aligning the interests of such persons with the interests of the Corporation’s shareholders generally; (iii) encouraging such persons to remain associated with the Corporation; and (iv) furnishing such persons with an additional incentive in their efforts on behalf of the Corporation.
3. Definitions
(a) “associate” has the meaning ascribed thereto in the TSX Policies.
(b) “Board” means the board of directors of the Corporation as constituted from time to time and shall be deemed to include any committee thereof to which the Board has, fully or partially, delegated the administration and operation of this Plan pursuant to Section 4 of this Plan.
(c) “Change of Control” means:
(i) the acceptance by the holders of Shares, representing in the aggregate of more than 50 percent (50%) of all issued and outstanding Shares, of any offer, whether by way of a takeover bid or otherwise, for all or any of the Shares;
(ii) the acquisition, by whatever means (including, without limitation, amalgamation, arrangement, consolidation or merger), by a person (or two or more persons who in such acquisition have acted jointly or in concert or intend to exercise jointly or in concert any voting rights attaching to the Shares acquired), directly or indirectly, of the beneficial ownership of such number of Shares, which together with such person’s then owned Shares, if any, represent more than 50 percent (50%) of the Corporation’s then outstanding Shares;
(iii) the sale, lease or other disposition of all or substantially all of the assets of the Corporation;
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(iv) the passing of a resolution by the board of directors of the Corporation or shareholders of the Corporation to substantially liquidate assets or windup its business or significantly rearrange its affairs in one or more transactions or series of transactions or the commencement of proceedings for such a liquidation, winding-up or re-arrangement (except where such re-arrangement is part of a bona fide reorganization of the Corporation in circumstances where the business of the Corporation is continued and where the shareholdings remain substantially the same following the re-arrangement as existed prior to the re-arrangement);
(v) individuals who were members of the board of directors of the Corporation immediately prior to a meeting of the shareholders of the Corporation involving a contest for or, an item of business relating to the election of directors shall not constitute a majority of the board of directors of the Corporation following such election;
(vi) the completion of any transaction or the first of a series of transactions which would have the same or similar effect as any transaction or series of transactions referred to in subsections (i), (ii), (iii), (iv) or (v) referred to above; or
(vii) a determination by the board of directors of the Corporation that there has been a change, whether by way of a change in the holding of the Shares, in the ownership of the Corporation’s assets or by any other means, as a result of which any person or group of persons acting jointly or in concert is in a position to exercise effective control of the Corporation.
(d) “Corporation” means Oncolytics Biotech Inc.
(e) “Consultant” means an individual or Consultant Corporation, other than a Director, Officer or Employee, that:
(i) is engaged to provide on an ongoing bona fide basis, consulting, technical, management or other services to the Corporation or a subsidiary of the Corporation, other than services in relation to a distribution;
(ii) provides the services under a written contract for an initial, renewable or extended period of twelve months or more; and
(iii) spends or will spend a significant amount of time and attention on the affairs of the Corporation or a subsidiary of the Corporation.
(f) “Consultant Corporation” means for an individual consultant, a company or partnership of which the individual is an employee, shareholder or partner.
(g) “Director” means a director of the Corporation or any subsidiary of the Corporation.
(h) “Eligible Person” means a Director, Officer, Employee or Consultant of the Corporation or its subsidiaries.
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(i) “Employee” means a person who would be considered an ‘employee’ under the Tax Act, or who works full-time or for a specified number of hours per week on a continuing regular basis and is subject to the same control and direction by the Corporation or a subsidiary of the company over the details and methods of work as an employee of the company, but for whom tax and other deductions are not made at source.
(j) “Exchange” means the Toronto Stock Exchange and such other stock exchange(s) on which the Shares are then listed and posted for trading from time to time.
(k) “insider” has the meaning ascribed thereto in the TSX Policies.
(l) “insider participation limit” has the meaning ascribed thereto in the TSX Policies.
(m) “Market Price” means the closing price of the Shares on the TSX (or, if the Shares are not then listed and posted for trading on the TSX or are then listed and posted for trading on more than one Exchange, on such Exchange on which the Shares are then listed and posted for trading as may be selected for such purpose by the Board acting reasonably and in good faith) on the last trading date prior to the date of grant of an Option hereunder.
(n) "Non-Employee Director" means any Director who is not also an Employee.
(o) “Officer” means an officer of the Corporation.
(p) “Option” means an option to purchase Shares granted pursuant to this Plan.
(q) “Participant” means each of the Eligible Persons granted an Option pursuant to this Plan and their heirs, executors and administrators.
(r) “Plan” means this Stock Option Plan.
(s) “Security Based Compensation Arrangement” has the meaning ascribed thereto in the TSX Policies.
(t) “Shares” means common shares in the capital of the Corporation and shall be deemed to include any other listed securities that may be acquired by a Participant upon the exercise of an Option the terms of which have been modified in accordance with Section 17.
(u) “Tax Act” means the Income Tax Act (Canada), as amended from time to time.
(v) “TSX” means the Toronto Stock Exchange.
(w) “TSX Policies” means the policies included in the TSX Company Manual.
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4. Administration
(a) The Plan shall be administered by the Board and, for greater certainty, the board of directors of the Corporation shall have the right to delegate the administration and operation of this Plan, in whole or in part, to a committee of the board of directors that has been assigned the responsibility of determining the Corporation’s policies with respect to executive compensation.
(b) Subject to the terms and conditions set forth herein and the TSX Policies, the Board is authorized to provide for the granting, exercise and method of exercise of Options, all on such terms (which may vary between Options granted from time to time) as it shall determine. In addition, the Board shall have the authority to:
(i) construe and interpret this Plan and all option agreements entered into hereunder,
(ii) prescribe, amend and rescind rules and regulations relating to this Plan; And
(iii) make all other determinations necessary or advisable for the administration of this Plan. All determinations and interpretations made by the Board shall be binding on all Participants and on their legal, personal representatives and beneficiaries.
(c) Options shall be evidenced by an agreement, signed on behalf of the Corporation and by the person to whom an Option is granted, which agreement shall be in such form as the Board shall approve or authorize from time to time.
5. Shares Subject to this Plan
(a) Subject to Section 17, the securities that may be acquired by Participants under this Plan shall consist of authorized but unissued Shares.
(b) The number of Shares reserved for issuance under this Plan and all other Security Based Compensation Arrangements in aggregate shall not exceed ten percent (10%) of the total number of issued and outstanding Shares from time to time.
(c) If any Option granted under this Plan shall be exercised or shall expire or terminate for any reason without having been exercised in full, any Shares to which such Option relates shall be available for the purposes of the granting of Options under this Plan.
6. Maintenance of Sufficient Capital
The Corporation shall at all times during the term of this Plan ensure that the number of Shares it is authorized to issue shall be sufficient to satisfy the requirements of this Plan.

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7. Eligibility and Participation
The Board may from time to time, in its discretion, grant an Option to any Eligible Person, upon such terms, conditions and limitations as the Board may determine, including the terms, conditions and limitations set forth herein, provided that Options granted to any Participant shall be approved by the shareholders of the Corporation if the TSX Policies or the requirements of any other Exchange on which the Shares are listed require such approval.
8. Exercise Price
Options may be exercised at a price (the “Exercise Price”) which shall be fixed by the Board at the time that the Option is granted. No Option shall be granted with an Exercise Price at a discount to the Market Price.
9. Number of Optioned Shares
The number of Shares that may be acquired under an Option granted to a Participant shall be determined by the Board as at the time the Option is granted, provided that the aggregate number of Shares reserved for issuance to any one Participant under this Plan or any other Security Based Compensation Arrangement, shall not exceed five percent (5%) of the total number of issued and outstanding Shares (calculated on a non-diluted basis).
10. Term
The period during which an Option may be exercised (the “Option Period”) shall be determined by the Board at the time the Option is granted, subject to any vesting limitations which may be imposed by the Board in its sole unfettered discretion at the time such Option is granted, provided that:
(a) no Option shall be exercisable for a period exceeding ten (10) years from the date the Option is granted;
(b) the Option Period shall be automatically reduced in accordance with Sections 12 and 13 upon the occurrence of any of the events referred to therein; and
(c) no Option in respect of which shareholder approval is required under the TSX Policies or the requirements of any other Exchange on which the Shares are then listed shall be exercisable until such time as the Option has been approved by the shareholders of the Corporation.
Notwithstanding the foregoing, if the Option Period of an Option expires during a Blackout Period (as defined below) or within five (5) business days after a Blackout Period, such Option Period shall be deemed to be extended to the date which is the tenth (10th) business day after the last day of the applicable Black Out Period. For the purposes of this Plan, Blackout Period means, with respect to an Option, any period
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during which the holder of such Option is not permitted to trade Shares pursuant to the policies of the Corporation.
11. Method of Exercise of Option
(a) Except as set forth in Sections 12 and 13 or as otherwise determined by the Board, no Option may be exercised unless the holder of such Option is, at the time the Option is exercised, an Eligible Person.
(b) Options may be exercised in whole or in part and may be exercised on a cumulative basis where a vesting limitation has been imposed at the time of grant.
(c) Any Participant (or his legal, personal representative) wishing to exercise an Option shall deliver to the Corporation, at its principal office in the City of Calgary, Alberta:
(i) a written notice expressing the intention of such Participant (or his legal, personal representative) to exercise his Option and specifying the number of Shares in respect of which the Option is exercised; and (ii) a cash payment, cheque or bank draft, representing the full purchase price of the Shares in respect of which the Option is exercised. For greater certainty, the Corporation shall not provide financial assistance in regards to the exercise of an Option.
(d) Upon the exercise of an Option as aforesaid, the Corporation shall use its reasonable efforts to forthwith deliver, or cause the registrar and transfer agent of the Shares to deliver, to the relevant Participant (or his legal, personal representative) or to the order thereof, a certificate representing the aggregate number of fully paid and non-assessable Shares as the Participant (or his legal, personal representative) shall have then paid for.
(e) In order to fulfill the Corporation’s obligations under the Tax Act in respect of withholding and remittance on account of tax payable by Participants on the exercise of Options under this Section 11, the Corporation shall advise each Participant, on receiving such Participant’s notice of intention to exercise, of the amount of such remittance (the “Remittance Amount”) required under the Tax Act. Prior to the delivery of the Shares, the Corporation may, in its sole discretion:
(i) require the Participant to pay to the Corporation, as an additional amount on the exercise of their Options, the Remittance Amount;
(ii) withhold from any remuneration or consideration payable to the Participant an amount equal to the Remittance Amount;
(iii) retain and sell on behalf of the Participant such number of Shares to obtain proceeds from the sale of such shares on the principal stock exchange on which the common shares are traded sufficient to satisfy the Remittance Amount; or
(iv) any combination of the above.
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Upon receipt or payment of this amount in the manner described above, the Corporation shall in accordance with Section 11(d) issue to the Participant the Shares (or in the case of subsection 11(d)(iii), the remaining Shares) for which the Option was exercised.
(f) Notwithstanding anything else contained herein, each Participant shall be responsible for the payment of all applicable taxes, including, but not limited to, income taxes payable in connection with the exercise of any Options under this Plan and the Corporation, its Directors, Officers, Employees and agents shall bear no liability in connection with the payment of such taxes.
12. Ceasing to be an Eligible Person
Subject to any written agreement between the Corporation and a Participant providing otherwise, if any Participant shall cease to be an Eligible Person for any reason other than the termination for cause or the death or permanent disability of the Participant, such Participant’s Option will terminate immediately as to the then unvested portion thereof and at 5:00 p.m. (Calgary time) on the earlier of the date of the expiration of the Option Period and the ninetieth (90th) day after the date such Participant ceases to be an Eligible Person as to the then vested portion of the Option.
If a Participant ceases to be an Eligible Person as a result of the termination of such Participant for cause, effective as of the date notice is given to the Participant of such termination, all outstanding Option Agreements under which Options have been granted to such Participant shall be terminated and all rights to receive Shares thereunder shall be forfeited by such Participant, and the Participant shall not be entitled to receive any Shares or other compensation in lieu thereof.
Neither the selection of any person as a Participant nor the granting of an Option to any Participant under this Plan shall (i) confer upon such Participant any right to continue as a Director, Officer, Employee or Consultant of the Corporation or a subsidiary thereof, as the case may be, or (ii) be construed as a guarantee that the Participant will continue as a Director, Officer, Employee or Consultant of the Corporation or a subsidiary thereof, as the case may be.
Notwithstanding the foregoing, the Board may, at its sole discretion, extend the period during which any Options may be exercised by a Participant that has ceased to be an Eligible Person, in the case of Options held by non-management Directors, by not more than one (1) year, and in the case of Options held by other persons, by not more than three (3) years, but in no case longer than the original expiry date of the Options established at the time of grant.
13. Death or Permanent Disability of a Participant
Subject to any written agreement between the Corporation and a Participant providing otherwise, if in the event of the death or permanent disability of a Participant, any Option previously granted to such Participant shall be exercisable until the end of the Option
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Period or until the expiration of 12 months after the date of death or permanent disability of such Participant, whichever is earlier, and then only:
(a) by the person or persons to whom the Participant’s rights under the Option shall pass by the Participant’s will or applicable law;
(b) to the extent that he was entitled to exercise the Option as at the date of the Participant’s death or permanent disability.
14. Change of Control
Notwithstanding any other provision hereof, in the event of a Change of Control, all Options which have not otherwise vested in accordance with their terms shall immediately vest and be exercisable, notwithstanding the other terms of the Options or this Plan for a period of time ending on the earlier of the expiry time of the Option and the ninetieth (90th) day following the Change of Control.
15. Transferability
All benefits, rights and Options accruing to any Participant in accordance with the terms and conditions of this Plan shall not be transferable or assignable unless specifically provided herein. The Corporation shall not recognize any attempted exercise of any purported assignee of a Participant. During the lifetime of a Participant any Options granted hereunder may only be exercised by the Participant and in the event of the death or permanent disability of a Participant, by the person or persons to whom the Participant’s rights under the Option pass by the Participant’s will or applicable law.
16. Amendment and Termination of Plan
(a) The Board may, at any time, suspend or terminate this Plan.
(b) Subject to Section 16(c) and 16(d), the Board may, at any time and from time to time, amend this Plan or any Option, subject to applicable TSX Policies and the requirements of any other Exchange on which the Shares are then listed, without the consent or approval from any Participant or shareholder of the Corporation (provided that no such amendment may be made that will materially prejudice the rights of any Participant under any Option previously granted to the Participant without consent by such Participant) including without limitation:
(i) to amend, modify or terminate this Plan with respect to all Shares in respect of Options which have not yet been granted thereunder;
(ii) to make any amendment of a “housekeeping nature”, including to make any amendment typographical, grammatical, clerical or administrative nature or clarification correcting or rectifying any ambiguity, immaterial inconsistency, defective provision, mistake, or error or omission in this Plan or any Option;
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(iii) to change the provisions relating to the manner of exercise of Options, including changing or adding any form of financial assistance provided by the Corporation or adding or amending provisions relating to a cashless exercise of Options;
(iv) accelerating vesting or extending the expiration date of any Option (provided that such Option is not held by an insider), provided that the period during which an Option is exercisable does not exceed 10 years from the date the Option is granted;
(v) adding a cashless exercise feature, payable in cash or securities, whether or not providing for a full deduction of the number of underlying Shares from this Plan reserve; and
(vi) to make any addition to, deletion from or alteration of the provisions of this Plan or any Option that are necessary to comply with applicable law, the TSX Policies, or the requirements of any other Exchange on which the Shares are then listed and to avoid unanticipated consequences deemed by the Board to be inconsistent with the purpose of this Plan.
(c) Notwithstanding Section 16(b), the Board may not, without approval of the holders of a majority of Shares present and voting in person or by proxy at a meeting of holders of Shares, amend this Plan or any Option to:
(i) increase the number of Shares reserved for issuance pursuant to this Plan;
(ii) extend eligibility to participate in this Plan to persons other than Eligible Persons;
(iii) permit Options to be transferred, other than for normal estate settlement purposes or to an RRSP or similar plan;
(iv) permit awards other than Options to be made under this Plan;
(v) amend or delete Section 10(a) to extend the term of any Option beyond the Option Period of such Option or allow for such Option to be exercisable for a period exceeding ten (10) years from the date the Option is granted, or extend any Option benefitting an insider other than as otherwise provided for under this Plan; or
(vi) reduce the Exercise Price of an Option, except for the purpose of maintaining Option value in connection with a conversion, change, reclassification, redivision, redesignation, subdivision or consolidation of shares or a reorganization, amalgamation, consolidation, merger, takeover bid or similar transaction involving the Corporation (for this purpose, cancellation or termination of an Option prior to its expiry date for the purpose of reissuing Options to the same option-holder with
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a lower Exercise Price will be considered an amendment to reduce the Exercise Price of an Option); or
(vii) change the insider participation limitation under this Plan; or
(viii) amend this Section 16.
(d) Notwithstanding Section 16(b), no amendment or revision to this Plan or any Option pursuant to Section 16(b) shall in any manner materially adversely affect the rights of any Participant under any Options granted under this Plan prior to such amendment or revision without such Participant’s consent.
17. Necessary Approvals
(a) The obligation of the Corporation to issue and deliver Shares in accordance with this Plan is subject to applicable securities legislation and to the receipt of any approvals that may be required from any regulatory authority or any Exchange on which the Shares are then listed. If Shares cannot be issued to a Participant upon the exercise of an Option for any reason whatsoever, the obligation of the Corporation to issue such Shares shall terminate and any funds paid to the Corporation in connection with the exercise of such Option will be returned to the relevant Participant as soon as practicable.
(b) Without obtaining the approval of the shareholders of the Corporation in accordance with the TSX Policies or the requirements of any other Exchange on which the Shares are then listed, no Options shall be granted pursuant to this Plan, if such grant together with grants pursuant to all other share compensation arrangements of the Corporation, could result, at any time, in:
(i) a number of Shares issuable pursuant to Options granted to insiders exceeding ten percent (10%) of the number of outstanding Shares at any time;
(ii) the issuance within a one year period to insiders, of a number of Shares exceeding ten percent (10%) of the number of outstanding Shares; or
(iii) the issuance to any one insider and such insider’s associates, within a one year period, of a number of Shares exceeding five percent (5%) of the number of outstanding Shares.
(c) The total annual grant of Options to any one Non-Employee Director cannot exceed a grant value of $150,000.
18. Stock Exchange Rules
This Plan and any option agreements entered into hereunder shall comply with the TSX Policies and the requirements of any other Exchange on which the Shares are then listed.
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19. Right to Issue Other Shares
The Corporation shall not by virtue of this Plan be in any way restricted from declaring and paying stock dividends, issuing further Shares, varying or amending its share capital or corporate structure or conducting its business in any way whatsoever.
20. Notice
Any notice required to be given by this Plan shall be in writing and shall be given by registered mail, postage prepaid or delivered by courier or by facsimile or email transmission addressed, if to the Corporation, at its principal address in Calgary, Alberta (being currently 210, 1167 Kensington Crescent N.W., Calgary, Alberta T2N 1X7), Attention: Chief Financial Officer; or if to a Participant, to such Participant at his address as it appears on the books of the Corporation or in the event of the address of any such Participant not so appearing then to the last known address of such Participant; or if to any other person, to the last known address of such person.
21. Gender
Whenever used herein words importing the masculine gender shall include the feminine and neuter genders and vice versa.
22. Interpretation
This Plan will be governed by and construed in accordance with the laws of the Province of Alberta.
[DATED: May 4, 2017]


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AMENDED AND RESTATED INCENTIVE SHARE AWARD PLAN
The Board of Directors of Oncolytics Biotech Inc. (the “Corporation”) has adopted this Incentive Share Award Plan (the “Plan”) governing the issuance of: (i) Restricted Share Awards to Eligible Persons; and (ii) Performance Share Awards to Employees.
1. Purposes
The principal purposes of the Plan are as follows:
(a) to retain and attract qualified directors, officers, employees and consultants for the Corporation;
(b) to promote ownership of common shares of the Corporation by such directors, officers, employees and consultants and to encourage such persons to remain in the employ or service of the Corporation and put forth maximum efforts for the success of the affairs of the Corporation; and
(c) to focus management of the Corporation on operating and financial performance and total long-term shareholder return.
2. Definitions
Where used herein, the following terms shall have the following meanings, respectively:
(a) Black-Out Period” means any period during which the holder of a Share Award is not permitted to trade Shares pursuant to the policies of the Corporation.
(b) Board” means the board of directors of the Corporation as constituted from time to time and shall be deemed to include any committee thereof to which the Board has, fully or partially, delegated the administration and operation of this Plan pursuant to Section 3 of this Plan.
(c) Business Day” means each day other than a Saturday, Sunday, a statutory holiday in Alberta or any day on which the principal chartered banks located in Calgary, Alberta are not open for business during normal business hours.
(d) Cessation Date” means, in respect of a Participant, the last day of active employment or service of the Participant with the Corporation, regardless of the reason for the cessation of employment or service and regardless of whether any or any adequate or proper advance notice of termination or resignation is provided in respect of such cessation of employment or service.
(e) Change of Control” means:
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(i) the acceptance by the holders of Shares, representing in the aggregate of more than 50 percent (50%) of all issued and outstanding Shares, of any offer, whether by way of a takeover bid or otherwise, for all or any of the Shares;
(ii) the acquisition, by whatever means (including, without limitation, amalgamation, arrangement, consolidation or merger), by a person (or two or more persons who in such acquisition have acted jointly or in concert or intend to exercise jointly or in concert any voting rights attaching to the Shares acquired), directly or indirectly, of the beneficial ownership of such number of Shares, which together with such person's then owned Shares, if any, represent more than 50 percent (50%) of the Corporation's then outstanding Shares;
(iii) the sale, lease or other disposition of all or substantially all of the assets of the Corporation;
(iv) the passing of a resolution by the board of directors of the Corporation or shareholders of the Corporation to substantially liquidate assets or windup its business or significantly rearrange its affairs in one or more transactions or series of transactions or the commencement of proceedings for such a liquidation, winding-up or re-arrangement (except where such re-arrangement is part of a bona fide reorganization of the Corporation in circumstances where the business of the Corporation is continued and where the shareholdings remain substantially the same following the re-arrangement as existed prior to the re-arrangement);
(v) individuals who were members of the board of directors of the Corporation immediately prior to a meeting of the shareholders of the Corporation involving a contest for or, an item of business relating to the election of directors shall not constitute a majority of the board of directors of the Corporation following such election;
(vi) the completion of any transaction or the first of a series of transactions which would have the same or similar effect as any transaction or series of transactions referred to in subsections (i), (ii), (iii), (iv) or (v) referred to above; or
(vii) a determination by the board of directors of the Corporation that there has been a change, whether by way of a change in the holding of the Shares, in the ownership of the Corporation's assets or by any other means, as a result of which any person or group of persons acting jointly or in concert is in a position to exercise effective control of the Corporation.
"Consultant" means an individual or Consultant Corporation, other than an Employee or a Non- Employee Director, that:
(a) is engaged to provide on an ongoing bona fide basis, consulting, technical, management or other services to the Corporation or a subsidiary of the Corporation, other than services in relation to a distribution;
4825-1831-5011\3


(b) provides the services under a written contract for an initial, renewable or extended period of twelve months or more; and
(c) spends or will spend a significant amount of time and attention on the affairs of the Corporation or a subsidiary of the Corporation.
(d) "Consultant Corporation" means for an individual consultant, a company or partnership of which the individual is an employee, shareholder or partner.
(e) Eligible Person” means an Employee, a Non-Employee Director or a Consultant.
(f) "Employee" means a persons who would be considered an 'employee' under the Tax Act, or who works full-time or for a specified number of hours per week on a continuing regular basis and is subject to the same control and direction by the Corporation or a subsidiary of the company over the details and methods of work as an employee of the company, but for whom tax and other deductions are not made at source.
(g) Exchange” means the TSX and such other stock exchange(s) on which the Shares are then listed and posted for trading from time to time.
(h) Grant Date” means the grant date for a Share Award.
(i) "insider" has the meaning ascribed thereto in the TSX Policies.
(j) "insider participation limit" has the meaning ascribed thereto in the TSX Policies.
(k) Issue Date” means the date on which Shares are issued to a Participant in respect of a Share Award following completion of the applicable Vesting Period.
(l) Non-Employee Director” means any director of the Corporation (including, for greater certainty, any subsidiary of the Corporation) who is not also an Employee.
(m) "Officer" means an officer of the Corporation.
(n) Participant” means an Eligible Person to whom a Share Award has been granted.
(o) Performance Criteria” means any performance-related measures or criteria as determined by the Board in its sole discretion at Grant Date to be taken into consideration over the Vesting Period of a Performance Share Award for purposes of determining the applicable Vesting Percentage, which measures or criteria may include, the Corporation’ performance compared to identified operational or financial targets, the Corporation’ shareholder return, and any such other performance-related measures or criteria matters as the Board may determine, in its sole discretion.
(p) Performance Share Award” means an award to an Employee under the Plan pursuant to which Shares shall be issued on the Issue Dates, as applicable, determined
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in accordance with Section 5 hereof, based upon achieving the applicable Performance Criteria and subject to adjustment in accordance with the terms of the Plan.
(q) Restricted Share Award” means an award to an Eligible Person under the Plan pursuant to which Shares shall be issued on the Issue Dates, as applicable, determined in accordance with Section 5 hereof, subject to adjustment in accordance with the terms of the Plan.
(r) Security Based Compensation Arrangement” has the meaning ascribed thereto in the TSX Policies.
(s) Share” mean a common share in the capital of the Corporation.
(t) Share Award” means a Performance Share Award or Restricted Share Award, as applicable.
(u) Share Award Agreement” has the meaning set forth in Section 5 hereof.
(v) Shareholder” means a holder of Shares.
(w) TSX” means the Toronto Stock Exchange.
(x) TSX Policies” means the policies included in the TSX Company Manual.
(y) Vested” means the applicable Vesting Period having been completed and additionally in the case of Performance Share Awards, the applicable Performance Criteria in relation to a whole or percentage of the number of Shares covered by such Performance Share Award determined by the Board having been met, where “Vesting” (or any applicable derivative term) has a comparable meaning.
(z) Vesting Percentage” means the percentage of outstanding Performance Share Awards that will vest based upon the relative achievement of the Performance Criteria for such award during the Vesting Period, where such percentage will range from 0 percent to 100 percent reflecting the Board’s determination, in its sole discretion, of the achievement of the Performance Criteria.
(aa) Vesting Period” means the period over which Share Awards granted under the Plan shall vest in accordance with Section 5(b)(i), subject to adjustment or modification pursuant to the terms and conditions of the Plan.
3. Administration
(a) The Plan shall be administered by the Board and, for greater certainty, the board of directors of the Corporation shall have the right to delegate the administration and operation of this Plan, in whole or in part, to a committee of the board of directors that has been assigned the responsibility of determining the Corporation’s policies with respect to executive compensation. The Board shall have the authority in its sole and
4825-1831-5011\3


absolute discretion to administer the Plan and to exercise all the powers and authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the Plan including, without limitation, the authority to:
(i) grant Restricted Share Awards to Eligible Persons and Performance Share Awards to Employees;
(ii) determine the Grant Date for Share Awards;
(iii) determine the Eligible Persons who may participate in this Plan and designate any officer or employee of the Corporation as being an Employee under this Plan;
(iv) determine Performance Criteria applicable to any Performance Share Award;
(v) approve the form and determine the terms and provisions of Share Award Agreements (which need not be identical) entered into in connection with Share Awards;
(vi) interpret the Plan and the Share Award Agreements;
(vii) prescribe, amend and rescind rules and regulations relating to the Plan;
(viii) determine whether and the extent to which adjustments shall be made pursuant to the Plan; and
(ix) make all other determinations deemed necessary or advisable for the administration of the Plan.
(b) For greater certainty and without limiting the discretion conferred on the Board pursuant to this Section 3, the Board’s decision to approve the grant of a Share Award in any period shall not require the Board to approve the grant of a Share Award to any Participant in any other period; nor shall the Board’s decision with respect to the amount or terms and conditions of a Share Award in any period require it to approve the grant of a Share Award of the same or similar amount or with the same or similar terms and conditions to any Participant in any other period. The Board shall not be precluded from approving the grant of a Share Award to any Participant solely because such Participant may previously have been granted a Share Award under this Plan or any other Security Based Compensation Arrangement. No Participant has any claim or right to be granted a Share Award. There is no obligation for uniformity of treatment of Non-Employee Directors, Employees or Consultants, or any group of Non-Employee Directors, Employees or Consultants.
(c) Any interpretation, rule, regulation, determination or other act of the Board hereunder shall be made in its sole discretion and shall be final and conclusively binding upon the Corporation and all persons affected by the Plan. No member of the Board shall be
4825-1831-5011\3


liable for any action or determination made in good faith pursuant to the Plan or any instrument of grant evidencing any Share Award awarded under the Plan.
4. Reservation of Shares; Participation Limits
(a) The number of Shares reserved for issuance under the Plan and all other Security Based Compensation Arrangements in aggregate shall not exceed 10% of the total number of issued and outstanding Shares from time to time.
(b) The number of Shares issuable to Insiders at any time, under all Security Based Compensation Arrangements of the Corporation, shall not exceed 10% of the issued and outstanding Shares.
(c) The number of Shares issued to Insiders, within any one-year period, under all Security Based Compensation Arrangements of the Corporation, shall not exceed 10% of the issued and outstanding Shares.
(d) The number of Shares reserved for issuance under all Security Based Compensation Arrangements of the Corporation to any one Participant shall not exceed 5% of the total number of issued and outstanding Shares.
(e) Notwithstanding any other provision of this Plan, Performance Share Awards may only be granted to Employees.
(f) Share Awards that are vested and redeemed, or are cancelled, terminated or expire prior to the settlement of all or a portion thereof, shall result in the Shares that were reserved for issuance thereunder being available for a subsequent grant of Share Awards pursuant to this Plan.
(g) The maximum number of Shares that may be reserved for issuance to Non-Employee Directors pursuant to Restricted Share Awards under the Plan is 1% of the Shares outstanding at the time of the grant (on a non-diluted basis), less the aggregate number of Shares reserved for issuance to such Non-Employee Director under any other Security Based Compensation Arrangement, and the total annual grant of Restricted Share Awards to any one Non-Employee Director cannot exceed a grant value of $150,000 (less the amount awarded to such Non-Employee Director in the year pursuant to any other Security Based Compensation Arrangement).
5. Terms and Conditions of Share Awards
Each Share Award granted under the Plan shall be subject to the terms and conditions of the Plan and evidenced by a written agreement between the Corporation and the Participant or an award letter from the Corporation to the Participant (a “Share Award Agreement”) which agreement shall comply with, and be subject to, the requirements of the Exchange and the following terms and conditions (and with such other terms and conditions as the Board, in its discretion, shall establish):
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(a) Number of Share Awards - The Board may determine the number of Share Awards to be awarded to a Participant in its sole discretion.
(b) Vesting of Share Awards -
(i) Unless otherwise determined by the Board, the Vesting Period in respect of Share Awards granted hereunder shall be three (3) years from the Grant Date of such Share Awards. The Board may, in its sole discretion, accelerate the vesting of all or any Share Awards at any time and from time to time.
(ii) Upon vesting, each Restricted Share Award and each Performance Share Award (following application of the applicable Vesting Percentage) so vested will entitle the holder to receive one Share (subject to adjustment in accordance with the terms of this Plan) on the applicable Issue Date. For greater certainty, a Participant shall have no right to receive any Shares or other consideration in respect of any Performance Share Awards other than for the Vesting Percentage of such Performance Share Awards.
(iii) The Board shall determine the Performance Criteria for each grant of Performance Share Awards at the time of the grant of the award and, the Board shall, as soon as reasonably practicable following the completion of the Vesting Period applicable to a particular grant of Performance Share Awards determine, in its sole discretion, the applicable “Vesting Percentage”.
(iv) Notwithstanding any other provision of this Plan, no term or condition of a grant of Share Awards hereunder or any Share Award Agreement may have the effect of causing any Shares to be issued pursuant to any Share Award under the Plan to a Participant in satisfaction of such Participant’s Performance Share Awards under the Plan (or any portion thereof) to occur after December 31 in the third (3rd) calendar year following the calendar year in respect of which such Share Awards were granted.
(c) Issuance of Shares - Shares that are issuable to the Participant on the Issue Date shall be issued from treasury as fully paid and non-assessable Shares. No fractional Shares will be issued and all fractional entitlements shall be rounded down to the nearest whole number.
(d) Delivery of Shares - The Issue Date shall occur as soon as practicable and in any event within 31 days following the completion of the Vesting Period applicable to a Share Award. Subject to the remainder of this Section 5(d), on the Issue Date, the Corporation will issue from treasury to the Participant that number of Shares to which the Participant is entitled to receive in respect of such Share Award in accordance with this Section 5, subject to Section 7 hereof, and sent by pre-paid mail or delivered to the Participant. Notwithstanding the foregoing, if on the Issue Date a Black-Out Period has been imposed upon a Participant which is still in effect, then the Issue Date shall not
4825-1831-5011\3


occur until the date which is the tenth (10th) business day after the last day of the applicable Black Out Period.
(e) Change of Control - Unless otherwise determined by the Board in its sole discretion, upon a Change of Control, all unvested Share Awards shall become automatically vested (in the case of Performance Share Awards, with a deemed Vesting Percentage of 100). Shares issuable in respect of Share Awards shall be, and shall be deemed to be, issued to Participants effective immediately prior to the completion of the transaction which would result in the Change of Control unless issued prior thereto in accordance with this Plan.
(f) Board Discretion - Notwithstanding anything else in this Plan, the Board may, in its sole discretion, but subject to the limits described in Sections 4 and 9 hereof and any other applicable requirements of the Exchange or other regulatory authority:
(i) make any additional adjustments to the Vesting Percentage (in respect of any Performance Share Awards) or the number of Shares to be issued or delivered to a Participant in connection with any Share Award if, in the sole discretion of the Board, such adjustments are appropriate in the circumstances having regard to the principal purposes of the Plan;
(ii) change the Issue Date (including amending the Vesting Period related thereto) for all or any Share Awards at any time and from time to time; and
(iii) otherwise amend or modify the terms and conditions regarding any grant of Share Awards or payments in respect of any Share Awards hereunder, provided, however, that no such amendment or modification may, without the consent of the affected Participant, impair or adversely affect a Share Award granted to the Participant under the Plan prior to the date of such amendment or modification.
(g) Effect of Certain Changes - In the event:
(i) of any change in the Shares through subdivision, consolidation, reclassification, recapitalization or similar transaction; or
(ii) that any rights are granted to Shareholders to purchase Shares at prices substantially below fair market value, and such events do not constitute a Change of Control, then, in any such case, the Board may make such adjustments to the Plan, to any Share Awards and to any Share Award Agreements outstanding under the Plan as the Board may, in its sole discretion, consider appropriate in the circumstances to prevent dilution or enlargement of the rights granted to Participants hereunder.
(h) Ceasing to be an Eligible Person - Unless otherwise determined by the Board or unless otherwise expressly set forth in a Share Award Agreement pertaining to a particular Share Award or any written employment or other agreement governing a
4825-1831-5011\3


Participant’s role as an Eligible Person, the following provisions shall apply in the event that a Participant ceases to be an Eligible Person:
(i) Termination for Cause – If a Participant ceases to be an Eligible Person as a result of the termination of such Participant for cause, effective as of the date notice is given to the Participant of such termination, all outstanding Share Awards Agreements under which Share Awards have been granted to such Participant shall be terminated and all rights to receive Shares thereunder shall be forfeited by such Participant, and the Participant shall not be entitled to receive any Shares or other compensation in lieu thereof.
(ii) Voluntary Resignation - If a Participant voluntarily ceases to be an Eligible Person for any reason other than as a result of the death, permanent disability or retirement of the Participant as set forth in Section 7(h)(iii), effective as of the date notice is given by the Participant of such resignation, unless otherwise determined by the Board, all outstanding Share Award Agreements under which Share Awards have been made to such Participant shall be terminated and all rights to receive Shares thereunder shall be forfeited by the Participant, and the Participant shall not be entitled to receive any Shares or other compensation in lieu thereof.
(iii) Termination Upon Death or Permanent Disability or Retirement – Upon the death, permanent disability or retirement of a Participant (other than the early retirement of an Eligible Employee), all outstanding Share Award Agreements under which Share Awards have been made to such Participant prior to the Cessation Date shall immediately vest as of the Cessation Date, and the Issue Date in respect of all Share Awards held by such Participant shall be the earlier of: (A) the 90th day following the Cessation Date; and (B) the original Issue Date contemplated by Section 5(d) of this Plan.
(iv) Termination not for Cause - If a Participant ceases to be an Eligible Person other than as set forth in Sections 7(h)(i), (ii) or (iii), effective as of the Cessation Date all Share Awards awarded to such Participant under any outstanding Share Award Agreements shall fully vest effective as of the Cessation Date, unless otherwise determined by the Board. On the applicable Issue Date in respect of such Share Awards, the Participant shall be entitled to receive the number of Shares equal to the number of Share Awards granted multiplied by a fraction (A) the numerator of which is the number of days from the Grant Date in respect of the applicable Share Award to the Cessation Date; and (B) the denominator of which is the total number of days comprising the Vesting Period in respect of such Share Award. In such circumstances, the Vesting Percentage in respect of Performance Share Awards shall be determined as of the Cessation Date. The Issue Date in respect of any such Awards shall be the earlier of: (A) the 90th day following the Cessation Date; and (B) the original Issue Date contemplated by Section 5(d) of this Plan.
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(i) Rights as a Shareholder - Until the Shares underlying any Share Award have been issued in accordance with the terms of the Plan, the Participant to whom such Share Award has been made shall not possess any incidents of ownership of such Shares including, for greater certainty and without limitation, the right to exercise voting rights in respect of such Shares. Such Participant shall only be considered a Shareholder in respect of such Shares when such issuance has been entered upon the records of the duly authorized transfer agent of the Corporation.
6. Ratification and Approval by Shareholders
Notwithstanding any other provision of this Plan:
(a) no Shares may be issued pursuant to any Share Award until the Plan has been approved by the Shareholders at a duly called meeting of the Shareholders; and (b) any grants of Share Awards by the Board prior to the Plan being approved by the Shareholders must be ratified by the Shareholders at the meeting of the Shareholders at which the Shareholders approve the Plan.
7. Withholding Taxes
When a Participant or other person becomes entitled to receive Shares under any Share Award, the Corporation shall have the right to require the Participant or such other person to remit to the Corporation an amount sufficient to satisfy any withholding tax requirements relating thereto. Unless otherwise prohibited by the Board or by applicable law, satisfaction of the withholding tax obligation may be accomplished by any of the following methods or by a combination of such methods:
(a) the tendering by the Participant of cash payment to the Corporation in an amount equal to the total withholding tax obligation;
(b) the withholding or sale by the Corporation from the Shares otherwise due to the Participant, of such number of Shares having a value determined by the Corporation in its sole discretion, acting reasonably, equal to the amount of the total withholding tax obligation (and in the case of a treasury issuance of Shares to settle Share Awards hereunder, such sale of Shares shall be automatically made on or as soon as practicable after the applicable Issue Date for the purposes of satisfying withholding tax obligations, unless otherwise agreed to by the Corporation and the Participant);
(c) the withholding by the Corporation from any cash payment otherwise due to the Participant of such amount of cash as is equal to the amount of the total withholding tax obligation; or
(d) any other method determined by the Corporation in its sole discretion, acting reasonably, provided, however, that the sum of any cash so paid or withheld and the value of any Shares so withheld or sold is, sufficient, in the reasonable estimation of the Corporation, to satisfy the total withholding tax obligation.
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8. Non-Transferability
The right to receive Shares pursuant to a Share Award granted to a Participant may only be settled by such Participant personally or through the Participant’s personal representative or estate and no assignment, sale, transfer, pledge or charge of a Share Award, whether voluntary, involuntary, by operation of law or otherwise (except by will or the laws of descent and distribution), vests any interest or right in such Share Award whatsoever in any assignee or transferee and, immediately upon any assignment, sale, transfer, pledge or charge or attempt to assign, sell, transfer, pledge or charge, such Share Award shall terminate and be of no further force or effect.
9. Amendment and Termination of Plan
(a) The Board may, at any time, suspend or terminate this Plan.
(b) Subject to Section 9(c), the Board may, at any time and from time to time, amend this Plan or any Share Award, subject to applicable TSX Policies and the requirements of any other Exchange on which the Shares are then listed, without the consent or approval from any Participant or shareholder of the Corporation, including without limitation:
(i) to amend, modify or terminate this Plan with respect to all Shares in respect of Share Awards which have not yet been granted thereunder;
(ii) to make any amendment of a "housekeeping nature", including to make any amendment typographical, grammatical, clerical or administrative nature or clarification correcting or rectifying any ambiguity, immaterial inconsistency, defective provision, mistake, or error or omission in this Plan or any Share Award; and
(iii) to make any addition to, deletion from or alteration of the provisions of this Plan or any Share Award that are necessary to comply with applicable law, the TSX Policies, or the requirements of any other Exchange on which the Shares are then listed and to avoid unanticipated consequences deemed by the Board to be inconsistent with the purpose of this Plan.
(c) Notwithstanding Section 9(b), the Plan or any Share Award may not be amended without Shareholder approval to:
(i) increase the number of Shares issuable pursuant to outstanding Share Awards at any time pursuant to Section 4 hereof;
(ii) change the insider participation limitation under this Plan;
(iii) expand the categories of individuals contained in the definition of "Employee" who are eligible to participate in the Plan;
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(iv) extend the term of any Share Award beyond the term of such awards provided for under the terms and conditions of this Plan;
(v) permit the transfer or assignment of Share Awards, except to permit a transfer to a family member, an entity controlled by the holder of the Share Awards or a family member, a charity or for estate planning or estate settlement purposes; or
(vi) amend this Section 9.
(d) In addition, no amendment to the Plan or Share Awards granted pursuant to the Plan may be made without the consent of the Participant, if such amendment adversely alters or impairs the rights of any Participant in respect of any Share Award previously granted to such Participant under the Plan.
10. Miscellaneous
(a) Effect of Headings - The Section headings contained herein are for convenience only and shall not affect the construction hereof.
(b) Compliance with Legal Requirements - The Corporation shall not be obliged to issue any Shares if such issuance would violate any law or regulation or any rule of any government authority or Exchange. The Corporation, in its sole discretion, may postpone the issuance or delivery of Shares under any Share Award as the Board may consider appropriate, and may require any Participant to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of Shares in compliance with applicable laws, rules and regulations. The Corporation shall not be required to qualify for resale pursuant to a prospectus or similar document any Shares awarded under the Plan, provided that, if required, the Corporation shall notify the Exchange and any other appropriate regulatory bodies in Canada of the existence of the Plan and the granting of Share Awards hereunder in accordance with any such requirements.
(c) No Right to Continued Employment - Nothing in the Plan or in any Share Award Agreement entered into pursuant hereto shall confer upon any Participant the right to continue in the employ or service of the Corporation, to be entitled to any remuneration or benefits not set forth in the Plan or a Share Award Agreement or to interfere with or limit in any way the right of the Corporation to terminate Participant’s employment or service arrangement with the Corporation.
(d) Expenses - All expenses in connection with the Plan shall be borne by the Corporation.
(e) Governing Language -This Plan is drawn up in the English language and each notice, instrument, certificate or other communication to be given under or in connection with this Plan shall be in the English language. If this Plan or any notice, instrument,
4825-1831-5011\3


certificate or other communication is translated into any other language, the English language text shall prevail.
(f) Market Fluctuations - No amount will be paid to, or in respect of, a Participant under the Plan to compensate for a downward fluctuation in the price of Shares which impacts the Share Award, nor will any other form of benefit be conferred upon, or in respect of, a Participant for such purpose. The Corporation makes no representations or warranties to a Participant with respect to the Plan or the Share Awards whatsoever. In seeking the benefits of participation in the Plan, a Participant agrees to exclusively accept all risks associated with a decline in the market price of Shares and all other risks associated with the holding of Share Awards.
(g) Currency - Any payments and benefits under the Plan to be paid in cash shall be determined in the lawful currency of Canada and paid in the local currency of the Participant’s country of residence using the currency exchange rate available to the Corporation at the time of payment.
(h) Participation is Voluntary; No Additional Rights - Participation in the Plan shall be entirely voluntary and any decision by a Participant not to participate shall not affect any Participant’s employment or service with the Corporation. In such instance where a Participant provides notice in writing to the Corporation of his or her intent to not participate in a Share Award, such award shall be immediately terminated and the Participant shall not be eligible to receive any form of in lieu compensation.
11. Governing Law
The Plan shall be governed by, interpreted and construed in accordance with the laws in force in the Province of Alberta.
12. Effective Date
This Plan shall take effect on May [4], 2017. The issuance of Shares under the Plan is subject to the acceptance of the Plan by the Exchange and any other relevant regulatory authorities and approval of the Shareholders.











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EXHIBIT D
LIST OF INVENTIONS
Halozyme: PCT/US19/32537

Methods of selecting subjects for combination cancer therapy with a polymer-conjugated soluble PH20

Genocea: PCT/US 62/855,309; PCT/US 62/848,527

Methods of identifying and/or selecting antigens that improve, increase and/or stimulate immune control of a tumor or cancer and methods of administering the same

GSK: EP 2 281 831 A3; US20180008700A1

Compositions for use in and methods for protecting against Herpes Zoster (HZ)
4825-1831-5011\3

EXHIBIT 4.13
AMENDING AGREEMENT #2

THIS AMENDING AGREEMENT made effective as of the 1st day of January, 2021.
BETWEEN:
Oncolytics Biotech Inc.
("Oncolytics")
- and -
Matt Coffey
(the “Employee”)

WHEREAS Oncolytics and the Employee entered into an Executive Employment Agreement dated January 1, 2019, amended by Amending Agreement #1 dated January 1, 2020 (together the “Employment Agreement”);
AND WHEREAS Oncolytics and the Employee wish to amend the Employment Agreement;
NOW THEREFORE in consideration of the mutual covenants contained in this Amending Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed as follows:
1.Interpretation
This Amending Agreement is supplemental to and shall form one agreement with the Employment Agreement, and the Employment Agreement and this Amending Agreement shall be read together and have effect so far as practicable as though all the provisions thereof and hereof were contained in one instrument. In this Amending Agreement, including the recitals hereto, unless there is something within the subject matter or context inconsistent therewith, expressions herein, unless otherwise defined herein, have the same meanings as the corresponding expressions defined in the Employment Agreement.
2.Amendment to the Employment Agreement
The Employment Agreement Section 3 – Remuneration is amended as follows:
(1) Commencing January 1, 2021, Oncolytics shall pay to the Employee a salary of SIX HUNDRED THIRTY-SEVEN THOUSAND TWO HUNDRED ($637,200.00) CANADIAN DOLLARS per annum, exclusive of bonuses, benefits and other compensation, payable in equal installments of TWENTY-SIX THOUSAND FIVE HUNDRED FIFTY DOLLARS ($26,550.00) on the 15th and last day of each month.





3.Confirmation
The parties hereto hereby acknowledge and confirm that, except as specifically amended by the provisions of this Amending Agreement, all of the terms and conditions contained in the Employment Agreement are and shall remain in full force and effect, unamended, in accordance with the provisions thereof.
4.Miscellaneous
(a)This Agreement shall be governed by and construed in accordance with the laws in force in the Province of Alberta. The parties hereby submit to the jurisdiction of the Courts of Alberta.
(b)The parties shall with reasonable diligence take all action, do all things, attend or cause their representatives to attend all meetings and execute all further documents, agreements and assurances as may be required from time to time in order to carry out the terms and conditions of this Agreement in accordance with their true intent.
(c)This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which together shall constitute one document. Delivery of an executed counterpart signature hereof by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature.
IN WITNESS WHEREOF the parties hereto have executed this Amending Agreement as of the date and year first above written.
ONCOLYTICS BIOTECH INC.
Per:/s/ Wayne Pisano
Wayne Pisano
Chair
Per:/s/ Deborah Brown


Deborah Brown
Chair, Compensation Committee, Director


___/s/ Matt Coffey____________________
MATT COFFEY



EXHIBIT 4.14
AMENDING AGREEMENT #2

THIS AMENDING AGREEMENT made effective as of the 1st day of January, 2021.
BETWEEN:
Oncolytics Biotech Inc.
("Oncolytics")
- and -
Kirk Look
(the “Employee”)

WHEREAS Oncolytics and the Employee entered into an Executive Employment Agreement dated January 1, 2019 amended by Amending Agreement #1 dated January 1, 2020 (together the “Employment Agreement”);
AND WHEREAS Oncolytics and the Employee wish to amend the Employment Agreement;
NOW THEREFORE in consideration of the mutual covenants contained in this Amending Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed as follows:
1.Interpretation
This Amending Agreement is supplemental to and shall form one agreement with the Employment Agreement, and the Employment Agreement and this Amending Agreement shall be read together and have effect so far as practicable as though all the provisions thereof and hereof were contained in one instrument. In this Amending Agreement, including the recitals hereto, unless there is something within the subject matter or context inconsistent therewith, expressions herein, unless otherwise defined herein, have the same meanings as the corresponding expressions defined in the Employment Agreement.
2.Amendment to the Employment Agreement
The Employment Agreement Section 3 – Remuneration is amended as follows:
(1) Commencing January 1, 2021, Oncolytics shall pay to the Employee a salary of FOUR HUNDRED SEVENTY-THREE THOUSAND EIGHT HUNDRED ($473,800.00) CANADIAN DOLLARS per annum, exclusive of bonuses, benefits and other compensation, payable in equal installments of NINETEEN THOUSAND SEVEN HUNDRED FORTY-ONE DOLLARS and SIXTY-SEVEN CENTS ($19,741.67) on the 15th and last day of each month.






3.Confirmation
The parties hereto hereby acknowledge and confirm that, except as specifically amended by the provisions of this Amending Agreement, all of the terms and conditions contained in the Employment Agreement are and shall remain in full force and effect, unamended, in accordance with the provisions thereof.
4.Miscellaneous
(a)This Agreement shall be governed by and construed in accordance with the laws in force in the Province of Alberta. The parties hereby submit to the jurisdiction of the Courts of Alberta.
(b)The parties shall with reasonable diligence take all action, do all things, attend or cause their representatives to attend all meetings and execute all further documents, agreements and assurances as may be required from time to time in order to carry out the terms and conditions of this Agreement in accordance with their true intent.
(c)This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which together shall constitute one document. Delivery of an executed counterpart signature hereof by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature.
IN WITNESS WHEREOF the parties hereto have executed this Amending Agreement as of the date and year first above written.
ONCOLYTICS BIOTECH INC.
Per:
/s/ Wayne Pisano
Wayne Pisano
Chair
Per:
/s/ Deborah Brown


Deborah Brown
Chair, Compensation Committee, Director


_/s/ Kirk Look________________________
KIRK LOOK



EXHIBIT 4.15
AMENDING AGREEMENT

THIS AMENDING AGREEMENT made effective as of the 1st day of January, 2021.
BETWEEN:
Oncolytics Biotech Inc.
("Oncolytics")
- and -
Allison Hagerman,
(the "Employee")
WHEREAS Oncolytics and the Employee entered into a Letter of Employment dated August 3, 2010;
AND WHEREAS Oncolytics and the Employee entered into an Employment Agreement dated August 1, 2013, which has been amended by amending agreements including that dated January 1, 2020 (collectively the “Employment Agreement”);
AND WHEREAS Oncolytics and the Employee wish to further amend the Employment Agreement;
NOW THEREFORE in consideration of the mutual covenants contained in this Amending Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed as follows:
1.Interpretation
This Amending Agreement is supplemental to and shall form one agreement with the Employment Agreement, and the Employment Agreement and this Amending Agreement shall be read together and have effect so far as practicable as though all the provisions thereof and hereof were contained in one instrument. In this Amending Agreement, including the recitals hereto, unless there is something within the subject matter or context inconsistent therewith, expressions herein, unless otherwise defined herein, have the same meanings as the corresponding expressions defined in the Employment Agreement.
2.Amendment to the Employment Agreement
The Employment Agreement Section 3 – Remuneration is amended as follows:
(1) Commencing January 1, 2021, Oncolytics shall pay to the Employee a salary of THREE HUNDRED EIGHTY THOUSAND FIVE HUNDRED ($380,500.00) CANADIAN DOLLARS per annum, exclusive of bonuses, benefits and other compensation, payable in equal installments of FIFTEEN THOUSAND EIGHT HUNDRED FIFTY-FOUR DOLLARS and SEVENTEEN CENTS ($15,854.17) on the 15th and last day of each month.






3.Confirmation
The parties hereto hereby acknowledge and confirm that, except as specifically amended by the provisions of this Amending Agreement, all of the terms and conditions contained in the Employment Agreement are and shall remain in full force and effect, unamended, in accordance with the provisions thereof.
4.Miscellaneous
(a)This Agreement shall be governed by and construed in accordance with the laws in force in the Province of Alberta. The parties hereby submit to the jurisdiction of the Courts of Alberta.
(b)The parties shall with reasonable diligence take all action, do all things, attend or cause their representatives to attend all meetings and execute all further documents, agreements and assurances as may be required from time to time in order to carry out the terms and conditions of this Agreement in accordance with their true intent.
(c)This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which together shall constitute one document. Delivery of an executed counterpart signature hereof by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature.
IN WITNESS WHEREOF the parties hereto have executed this Amending Agreement as of the date and year first above written.

ONCOLYTICS BIOTECH INC.
Per:/s/ Wayne Pisano
Wayne Pisano
Chair
Per:/s/ Deborah Brown


Deborah Brown
Chair, Compensation Committee,
Director

_/s/ Allison Hagerman_________________
ALLISON HAGERMAN



EXHIBIT 4.16
AMENDING AGREEMENT #4
THIS AMENDING AGREEMENT made effective as of the 1st day of January, 2021.
BETWEEN:
ONCOYLYTICS BIOTECH (U.S.), INC.,
("OBUS")
- and -
ANDREW DE GUTTADAURO
(the "Employee")
WHEREAS the Employee is an officer of OBUS whose terms of employment are set forth in the Employment Agreement dated effective June 29, 2017, as amended by Amending Agreement #1, Amending Agreement #2 and Amending Agreement #3 (collectively the “Employment Agreement”);
AND WHEREAS OBUS and the Employee wish to further amend the Employment Agreement;
NOW THEREFORE in consideration of the mutual covenants contained in this Amending Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed as follows:
1.Interpretation

This Amending Agreement is supplemental to and shall form one agreement with the Employment Agreement, and the Employment Agreement and this Amending Agreement shall be read together and have effect so far as practicable as though all the provisions thereof and hereof were contained in one instrument. In this Amending Agreement, including the recitals hereto, unless there is something within the subject matter or context inconsistent therewith, expressions herein, unless otherwise defined herein, have the same meanings as the corresponding expressions defined in the Employment Agreement.

2.Amendment to the Employment Agreement

The Employment Agreement Section 3 – Remuneration is amended as follows:

(1)    Commencing January 1, 2021, OBUS shall pay to the Employee a salary of THREE HUNDRED TWENTY-TWO THOUSAND NINE HUNDRED ($322,900.00) UNITED STATES DOLLARS per annum, exclusive of bonuses, benefits and other compensation, payable in equal installments of THIRTEEN THOUSAND FOUR HUNDRED FIFTY-FOUR UNITED STATES DOLLARS and SEVENTEEN CENTS ($13,454.17) on the 15th and last day of each month.









3.Confirmation

(1)    The parties confirm that the increase in Base Salary is a result of an assessment of increases in cost-of-living indices and salary benchmarking.

(2)    The parties hereto hereby acknowledge and confirm that, except as specifically amended by the provisions of this Amending Agreement, all of the terms and conditions contained in the Employment Agreement are and shall remain in full force and effect, unamended, in accordance with the provisions thereof.

4.Miscellaneous

(a)This Agreement shall be governed by and construed in accordance with the laws of California.

(b)The parties shall with reasonable diligence take all action, do all things, attend or cause their representatives to attend all meetings and execute all further documents, agreements and assurances as may be required from time to time in order to carry out the terms and conditions of this Agreement in accordance with their true intent.

(c)This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which together shall constitute one document. Delivery of an executed counterpart signature hereof by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature.

IN WITNESS WHEREOF the parties hereto have executed this Amending Agreement as of the date and year first above written.
ONCOLYTICS BIOTECH (U.S.), INC.
Per:/s/ Matt Coffey
Matt Coffey
Director

__/s/ Andrew de Guttadauro______________
ANDREW DE GUTTADAURO



EXHIBIT 4.17
AMENDING AGREEMENT #1
THIS AMENDING AGREEMENT made effective as of the 1st day of January, 2021
BETWEEN:
ONCOYLYTICS BIOTECH (U.S.), INC.,
("OBUS")
- and -
THOMAS C. HEINEMAN, M.D., Ph.D.
(the "Employee")
WHEREAS the Employee is an officer of OBUS whose terms of employment are set forth in the Employment Agreement dated effective August 3, 2020, (the “Employment Agreement”);
AND WHEREAS OBUS and the Employee wish to amend the Employment Agreement;
NOW THEREFORE in consideration of the mutual covenants contained in this Amending Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed as follows:
1.Interpretation

This Amending Agreement is supplemental to and shall form one agreement with the Employment Agreement, and the Employment Agreement and this Amending Agreement shall be read together and have effect so far as practicable as though all the provisions thereof and hereof were contained in one instrument. In this Amending Agreement, including the recitals hereto, unless there is something within the subject matter or context inconsistent therewith, expressions herein, unless otherwise defined herein, have the same meanings as the corresponding expressions defined in the Employment Agreement.

2.Amendment to the Employment Agreement

The Employment Agreement Section 3.1 – Base Salary is amended as follows:

Commencing January 1, 2021, OBUS shall pay to the Employee a Base Salary at an annual rate of FOUR HUNDRED AND TEN THOUSAND ($410,000.00) UNITED STATES DOLLARS per annum, exclusive of bonuses, benefits and other compensation, payable in equal installments of SEVENTEEN THOUSAND AND EIGHTY-THREE UNITED STATES DOLLARS and THIRTY-THREE CENTS ($17,083.33) on the 15th and last day of each month.

3.Confirmation

(1)    The parties confirm that the increase in Base Salary is a result of an assessment of increases in cost-of-living indices and salary benchmarking.






(2)    The parties hereto hereby acknowledge and confirm that, except as specifically amended by the provisions of this Amending Agreement, all of the terms and conditions contained in the Employment Agreement are and shall remain in full force and effect, unamended, in accordance with the provisions thereof.

4.Miscellaneous

(a)This Agreement shall be governed by and construed in accordance with the laws of California.

(b)The parties shall with reasonable diligence take all action, do all things, attend or cause their representatives to attend all meetings and execute all further documents, agreements and assurances as may be required from time to time in order to carry out the terms and conditions of this Agreement in accordance with their true intent.

(c)This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which together shall constitute one document. Delivery of an executed counterpart signature hereof by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature.

IN WITNESS WHEREOF the parties hereto have executed this Amending Agreement as of the date and year first above written.
ONCOLYTICS BIOTECH (U.S.), INC.
Per:
/s/ Matt Coffey
Matt Coffey
Director


_/s/ Thomas Heineman________________
THOMAS C. HEINEMAN, M.D., Ph.D.





EXHIBIT 8.0
LIST OF SUBSIDIARIES
2020
Name
Jurisdiction
Oncolytics Biotech (Barbados) Inc.
Barbados
Oncolytics Biotech (US) Inc.
Delaware





EXHIBIT 12.1
CERTIFICATION

I, Matthew Coffey, certify that:

1.I have reviewed this annual report on Form 20-F of Oncolytics Biotech Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4.The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5.     The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.
Date:
March 5, 2021
/s/ Matthew Coffey
Dr. Matthew Coffey, PhD, MBA
Chief Executive Officer
Principal Executive Officer



EXHIBIT 12.2
CERTIFICATION

I, Kirk Look, certify that:

1.           I have reviewed this annual report on Form 20-F of Oncolytics Biotech Inc.;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4.           The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5.     The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.
Date:
March 5, 2021
/s/ Kirk Look
Kirk Look, CA
Chief Financial Officer
Principal Accounting and Financial Officer


EXHIBIT 13.1


CERTIFICATION PURSUANT TO
18 U.S.C. §1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the annual report of Oncolytics Biotech Inc. (the “Company”) on Form 20-F for the fiscal year ended December 31, 2020 as filed with the Securities and Exchange Commission on the date here of (the “Report”), I, Matthew Coffey, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)          The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)          The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ Matthew Coffey
_________________________________
Dr. Matthew Coffey, PhD, MBA
Chief Executive Officer
Principal Executive Officer
March 5, 2021


A signed original of this written statement required by Section 906 has been provided to Oncolytics Biotech Inc. and will be retained by Oncolytics Biotech Inc. and furnished to the Securities and Exchange Commission or its staff upon request.












EXHIBIT 13.2

CERTIFICATION PURSUANT TO
18 U.S.C. §1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the annual report of Oncolytics Biotech Inc. (the “Company”) on Form 20-F for the fiscal year ended December 31, 2020 as filed with the Securities and Exchange Commission on the date here of (the “Report”), I, Kirk Look, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)          The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)          The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ Kirk Look
__________________________________
Kirk Look, CA
Chief Financial Officer
Principal Accounting and Financial Officer
March 5, 2021


A signed original of this written statement required by Section 906 has been provided to Oncolytics Biotech Inc. and will be retained by Oncolytics Biotech Inc. and furnished to the Securities and Exchange Commission or its staff upon request.






oncolyticslogotaglineblueaa.jpg


MANAGEMENT DISCUSSION & ANALYSIS

2020



March 4, 2021

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

BASIS OF PRESENTATION

Our Management Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with our 2020 audited consolidated financial statements and notes thereto, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). This MD&A along with our consolidated financial statements for the year ended December 31, 2020, were authorized for issue in accordance with a resolution of the Board of Directors (the "Board") on March 4, 2021. Unless otherwise indicated, all references to "$" and "dollars" in this discussion and analysis mean Canadian dollars.

FORWARD-LOOKING STATEMENTS

The following discussion contains forward-looking statements, within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended and forward-looking information under applicable Canadian securities laws (such forward-looking statements and forward-looking information are collectively referred to herein as “forward-looking statements”). Forward-looking statements, including: our belief as to the potential and mode of action of pelareorep, an intravenously delivered immuno-oncolytic virus, as a cancer therapeutic; our expectation that we will incur substantial losses and will not generate significant revenues until and unless pelareorep becomes commercially viable; our business strategy, goals, focus and objectives for the development of pelareorep; the impact of the COVID-19 pandemic on our research and development activities, business operations and financial condition, our plans to mitigate any such impact; the potential impact of the COVID-19 pandemic on stock markets and global economic activity; our plan to actively manage the development of our clinical trial program, our pre-clinical and collaborative programs, our manufacturing process and pelareorep supply; our plans respecting regulatory approval for pelareorep; our planned clinical development program, including the timing thereof; our expectations as to the purpose, design, outcomes and benefits of our current or pending clinical trials involving pelareorep; our expectations regarding enrollment under our various clinical trials; our expectations respecting the delivery of additional clinical data and the timing thereof; our anticipated milestones and catalysts; our planned 2021 development activity for pelareorep; our 2021 manufacturing program; our anticipated 2021 expenses relating to clinical trials, manufacturing, intellectual property, research collaborations and other research and development and operating expenses; our plans respecting the maintenance of adequate cash reserves to support our planned activities; our anticipated cash usage in 2021; our plans for funding our capital expenditure requirements; our approach to credit rate, interest rate, foreign exchange and liquidity risk mitigation; and other statements that are not historical facts or which are related to anticipated developments in our business and technologies. In any forward-looking statement in which we express an expectation or belief as to future results, such expectations or beliefs are expressed in good faith and are believed to have a reasonable basis, but there can be no assurance that the statement or expectation or belief will be achieved. Forward-looking statements, involve known and unknown risks and uncertainties, which could cause our actual results to differ materially from those in the forward-looking statements. We may be impacted by business interruptions resulting from COVID-19 coronavirus, including operating, manufacturing supply chain, clinical trial and project development delays and disruptions, labor shortages, travel and shipping disruption and shutdowns (including as a result of government regulation and prevention measures). It is unknown whether and how the Company may be affected if the COVID-19 pandemic persists for an extended period of time. We may incur expenses or delays relating to such events outside of our control, which could have a material adverse impact on our business, operating results and financial condition.

Such risks and uncertainties include, among others, the need for and availability of funds and resources to pursue research and development projects, the efficacy of pelareorep as a cancer treatment, the success and timely completion of clinical studies and trials, our ability to successfully commercialize pelareorep, uncertainties related to the research, development and manufacturing of pelareorep, uncertainties related to competition, changes in technology, the regulatory process and general changes to the economic environment.

With respect to the forward-looking statements made within this MD&A, we have made numerous assumptions regarding among other things: our ability to recruit and retain talented employees, our continued ability to obtain financing to fund our clinical development plan, our ability to receive regulatory approval to commence enrollment in the clinical studies which are part of our clinical development plan, our ability to maintain our supply of pelareorep and future expense levels being within our current expectations.

1


Investors should consult our quarterly and annual filings with the Canadian and U.S. securities commissions for additional information on risks and uncertainties relating to the forward-looking statements. Forward-looking statements are based on assumptions, projections, estimates, and expectations of management at the time such forward-looking statements are made, and such assumptions, projections, estimates and/or expectations could change or prove to be incorrect or inaccurate. Investors are cautioned against placing undue reliance on forward-looking statements. We do not undertake any obligation to update these forward-looking statements except as required by applicable law.

Pelareorep Development Update For 2020

Oncolytics Biotech Inc. is a Development Stage Company

Since our inception in April of 1998, Oncolytics Biotech Inc. has been a development stage company. We have focused our research and development efforts on the development of pelareorep, an intravenously delivered immuno-oncolytic virus (IOV) with the potential to treat a variety of cancers. We have not been profitable since our inception and expect to continue to incur substantial losses as we continue research and development efforts. We do not expect to generate significant revenues until, and unless, pelareorep becomes commercially viable.

Our goal each year is to advance pelareorep through the various steps and stages of development required for potential pharmaceutical products. In order to achieve this goal, we proactively manage all aspects of the development of our clinical trial program, our pre-clinical and collaborative programs, our manufacturing process and pelareorep supply, and our intellectual property.

Potential Impact of COVID-19

During 2020, the global outbreak of a novel coronavirus identified as the SARS-coronavirus-2 (SARS-CoV-2) led to the associated coronavirus infectious disease 2019 (COVID-19). In order to combat the spread of COVID-19, governments and businesses worldwide have enacted emergency measures including travel bans, legally enforced or self-imposed quarantine periods, social distancing and business and organization closures.

Although COVID-19 has impacted our research and development activities, it has not caused a significant disruption to our business operations to date. In March 2020, we transitioned our workforce to a remote working arrangement to protect the health and safety of our employees and in accordance with enhanced health and safety protocols consistent with guidelines issued by local health authorities. Clinical trial activities by Oncolytics, including patient enrollment and site activation, were not materially delayed due to COVID-19. To date, COVID-19 has not had a material impact on our financial condition, liquidity or longer-term strategic development. The global outbreak of COVID-19 has also caused and may continue to cause significant fluctuations in stock markets, global economic activity and healthcare systems. The scale and duration of these developments remain uncertain and could affect our ability to finance and execute our operations.

The extent to which COVID-19 may cause more significant disruptions to our business and greater impacts to our results of operations will depend on future developments, which are highly uncertain and cannot be predicted, such as the duration of the outbreak (including future potential waves or cycles), travel restrictions and social distancing, business closures or business disruptions and the effectiveness of actions taken to contain and treat the disease and to address its impact, including on financial markets.

We have collaborated with our investigators to ensure the safety of patients and employees, as well as the productivity of our clinical programs. We expect these measures will allow us to build on the positive momentum of the past year, despite any COVID-19-related challenges that may arise. Moving forward, we plan to remain in contact with relevant stakeholders and keep the market apprised of any new information that may impact clinical timelines.

Clinical Trial Program

The ultimate objective of our clinical development plan is to obtain regulatory approval for pelareorep and is based on the compelling efficacy data from previous studies in breast, multiple myeloma, and selected gastrointestinal cancers. Our current clinical development program centers on the role of pelareorep in immuno-oncology mechanisms, particularly in combination with key immune checkpoint inhibitors and potentially other immune-based therapies. Our primary focus is to demonstrate enhanced antitumor efficacy with high profile checkpoint inhibitors, as we believe this may be the most immediately impactful clinical data and the most expeditious path to approval.
2


We believe pelareorep has the potential to provoke specific innate and adaptive immune responses when combined with different classes of immunotherapies. Therefore, as our clinical development program evolves and delivers additional data, we will consider appropriate expansion of our plan to investigate potential opportunities with such immunotherapies.

2020 Developments:

Clinical studies aiding breast cancer program

Collaboration with Pfizer Inc. and Merck KGaA, Darmstadt, Germany: BRACELET-1 study
In 2019, we entered into a co-development agreement with Merck KGaA, Darmstadt, Germany and Pfizer Inc. to co-develop pelareorep in combination with paclitaxel and avelumab, a human anti-PD-L1 antibody, for the treatment of hormone receptor-positive / human epidermal growth factor 2-negative (HR+ / HER2-) metastatic breast cancer (mBC). This phase 2 clinical trial is jointly funded by Oncolytics and Pfizer. The study, known as BRACELET-1 (BReast cAnCEr with the Oncolytic Reovirus PeLareorEp in CombinaTion with anti-PD-L1 and Paclitaxel), is an open-label study planned to enroll 48 patients into three cohorts: paclitaxel alone, paclitaxel in combination with pelareorep, and paclitaxel in combination with both pelareorep and avelumab (Bavencio®). PrECOG LLC, a leading cancer research network, is managing operations of the BRACELET-1 study.

The study will examine the expression of immune-related biomarkers to identify changes in T cell population between pretreatment and on-therapy biopsies and seek to confirm our previously identified biomarker and is designed to assess efficacy in terms of overall response rate at week 16 per RECIST 1.1 and iRECIST. The safety of the combination will also be evaluated. Similar to the AWARE-1 study (see below), the results of this study may provide an opportunity to add an arm to our proposed phase 3 study that includes a checkpoint inhibitor in addition to the chemotherapy-virus combination. Furthermore, the results of the BRACELET-1 study may provide important confirmatory data in the same patient population where we presented compelling mBC survival data at the 2017 AACR Annual Meeting. These endpoints, including the biomarker data, are designed to further de-risk our planned phase 3 registration study, hopefully permitting for a smaller study with a higher likelihood of clinical success.

In 2020, we dosed our first patient, continued patient enrollment and treatment and study initiating activities including selecting and readying additional clinical trial sites.

Collaboration with SOLTI: AWARE-1 study
In February 2019, we received approval for our AWARE-1 study, which was announced in September 2018, from the Spanish Agency for Medicine and Health Products. This clinical collaboration with SOLTI, an academic research group dedicated to breast cancer research, is a window of opportunity study in the neoadjuvant setting for breast cancer using pelareorep in combination with F. Hoffmann-La Roche (Roche)'s anti-PD-L1 checkpoint inhibitor, atezolizumab (Tecentriq®), which we are utilizing under our Master Clinical Supply Agreement with Roche. In 2019, we announced preliminary trial data demonstrating viral replication and promotion of inflammation following systemic administration of pelareorep when combined with Tecentriq®.

The study plans to enroll 38 patients. Data generated from this study is intended to confirm that the virus is acting as a novel immunotherapy in breast cancer and to confirm biomarker data for breast cancer. The primary objective of this study is to supplement the existing randomized phase 2 results by providing key biomarker data points to enhance our probability of success in the phase 3 registration study. The results of this study may also provide an opportunity to add an arm to our proposed phase 3 study that includes a checkpoint inhibitor in addition to the chemotherapy-virus combination.

In 2020, we continued with patient enrollment, treatment and data analysis.











3


We also published the following electronic-posters (ePoster) with clinical data from our AWARE-1 window-of-opportunity breast cancer study. These data in the table below demonstrated the ability of pelareorep to promote a pro-inflammatory tumor microenvironment (TME) and provided a basis for the findings of a prior successful phase 2 trial (IND-213) that showed a near doubling of overall survival with pelareorep treatment in HR+/HER2- breast cancer patients. These data also highlighted the potential of a predictive biomarker (T cell clonality) to identify patients with breast cancer most likely to respond to pelareorep.

TitleLocationDescription/Conclusion
A window-of-opportunity study with atezolizumab and the oncolytic virus pelareorep in early breast cancerEuropean Society for Medical
Oncology Breast
Cancer Virtual
Meeting
Key data and conclusions demonstrated:
Intravenous systemic administration resulted in tumor cell specific pelareorep replication
All patients treated with pelareorep demonstrated an increase in CD8+ T cells as confirmed in tumor biopsies (range of 1.6-fold to 11.2-fold increase)
All patients treated with pelareorep experienced an increase in the number of PD-L1 positive cells in their tumors in as early as three weeks after beginning treatment (range of 1.3-fold to 11.0-fold increase)
Four out of six evaluated patients exhibited an increase in CelTIL, which is associated with favorable clinical response, the study's primary endpoint
Peripheral T cell clonality correlated with changes in the TME and CelTIL, highlighting its potential as a compelling biomarker of pelareorep response in breast cancer
Changes in T cell clonality in AWARE-1 study, a window-of-opportunity study with atezolizumab and the oncolytic virus pelareorep in early breast cancerThe Society for Immunotherapy of Cancer (SITC) 35th Anniversary Annual Meeting
Key data and conclusions included:
Tumor-cell specific pelareorep replication was observed in all cohort-1 patients following systemic pelareorep administration
70% of cohort 1 patients saw an increase in CelTIL, the study's primary endpoint and a measure of tumor-associated cellularity and tumor-infiltrating lymphocytes that is associated with favorable clinical outcomes
On average, there was a 14-fold increase in intratumoral CD8+ T cells from baseline (pre-pelareorep administration) to surgery (21-days post-administration), with increases observed in all cohort-1 patients
Pelareorep administration led to the generation and expansion of new T cell clones in the tumor and periphery, which included both anti-tumor and anti-viral clones
A window-of-opportunity study with atezolizumab and the oncolytic virus pelareorep in early breast cancer (REO-027, AWARE-1)2020 San Antonio Breast Cancer Symposium (SABCS)
Key data and conclusions included:
72% of evaluated patients (n=18) saw an increase in CelTIL, the study's primary endpoint that is associated with favorable clinical outcomes
The maximum percentage increase in CelTIL (~300%) was achieved in a cohort 2 patient receiving pelareorep in combination with checkpoint blockade therapy
On average, there was a 105-fold increase in TME PD-L1 expression (n=13) from baseline (pre-pelareorep administration) to surgery (21-days post-administration)
Tumor microenvironment PD-L1 expression increased in all evaluated patients (n=13)
Preliminary imaging mass cytometry analysis showed pelareorep treatment promoted broad anti-tumor changes in the TME, including enhanced CD8+ T cell activation and the recruitment of memory T cells

Additional checkpoint inhibitor combinations

Triple-negative breast cancer study combining pelareorep and retifanlimab
In 2020, we dosed the first patient in our investigator-sponsored trial (IST) managed by Rutgers Cancer Institute of New Jersey. The phase 2 trial, known as IRENE (INCMGA00012 and the oncolytic virus pelaREorep in metastatic triple-NEgative breast cancer), will investigate the use of pelareorep in combination with Incyte's anti-PD-1 checkpoint inhibitor retifanlimab (INCMGA00012) in patients with unresectable locally advanced or metastatic triple-negative breast cancer (TNBC). This single-arm, open-label, phase 2 study plans to enroll 25 patients and will be conducted at the Rutgers Cancer Institute of New Jersey and the Ohio State University Comprehensive Cancer Center.

4


The IRENE study represents an expansion of our lead breast cancer program into a new disease subtype (TNBC). In addition to investigating the safety and efficacy of pelareorep-anti-PD-1 combination treatment in TNBC patients, the study will also evaluate changes in PD-L1 expression and correlations between treatment outcomes and peripheral T cell clonality, a previously identified biomarker of pelareorep response that may enable the success of future pivotal studies by facilitating the patient selection process.

Collaboration with Roche and AIO-Studien-gGmbH: GOBLET platform study
In October 2020, we entered into a collaboration with Roche and AIO-Studien-gGmbH, a leading academic cooperative medical oncology group based in Germany. The phase 1/2 trial, known as GOBLET (Gastrointestinal tumOrs exploring the treatment comBinations with the oncolytic reovirus peLarEorep and anTi-PD-L1), will investigate the use of pelareorep, in combination with Roche's anti-PD-L1 checkpoint inhibitor atezolizumab (Tecentriq®), in patients with metastatic pancreatic, metastatic colorectal and advanced anal cancers. The study is expected to be conducted at 25 centers in Germany. The primary endpoint of the study is safety, with overall response rate and blood-based biomarkers (T cell clonality and CEACAM6) as exploratory endpoints. Approximately 55 patients are planned for enrollment across four separate cohorts: pelareorep in combination with atezolizumab, gemcitabine, and nab-paclitaxel in 1st line metastatic pancreatic cancer patients, pelareorep in combination with atezolizumab in 2nd and 3rd line metastatic colorectal cancer patients that are diagnosed as MSI high (microsatellite instability), pelareorep in combination with atezolizumab and TAS-102 in 3rd line metastatic colorectal cancer patients, and pelareorep in combination with atezolizumab in 2nd line advanced and unresectable anal cancer patients.

Pancreatic cancer study combining pelareorep and Keytruda®
In 2020, we continued patient treatment in our IST supported by Merck Inc. (Merck), Northwestern University and Oncolytics. This study, an extension of our phase 1 study (REO 024), will investigate pelareorep in combination with Merck’s anti-PD1 checkpoint inhibitor Keytruda®, to treat second-line pancreatic cancer patients. The study plans to enroll approximately 40 patients.

In May 2020, at the 2020 American Society of Clinical Oncology (ASCO) Virtual Annual Meeting, we published an abstract on treatment tolerability and efficacy in pancreatic cancer patients treated with pelareorep, in combination with pembrolizumab (Keytruda®). Preliminary data indicate that the combination of pelareorep and pembrolizumab resulted in tumor-specific replication, a high degree of T cell repertoire turnover, and the creation of new T cell clones in the peripheral blood during treatment. The treatment was found to be well tolerated, with most treatment-related adverse events being grade 1 or 2. One patient achieved a partial response and three achieved stable disease, with an overall disease control rate of 30% in evaluable patients. The study will not proceed to stage 2 in unselected patients, however further evaluation of the anti-tumor activity of pelareorep and anti-PD-1 therapy is now planned in biomarker defined pancreatic patients in a subsequent study.

Multiple myeloma study combining pelareorep and Opdivo®
In 2020, we continued patient enrollment and treatment of our IST with Emory University and the University of Utah investigating the combination of pelareorep and Bristol-Myers Squibb's anti-PD1 checkpoint inhibitor Opdivo® in 40 - 50 relapsed or refractory myeloma patients.

Additional research collaborations

Key studies that have been presented at scientific forums are as follows:

In January 2020, at the 2020 Gastrointestinal Cancers Symposium, we made a poster presentation highlighting statistically significant data identifying CEACAM6 as a prospective biomarker for pelareorep in the treatment of pancreatic cancer.

In April 2020, we published positive clinical data in a peer-reviewed journal highlighting that the combination of FOLFIRI, bevacizumab and pelareorep was well tolerated, with promising efficacy signals in colorectal cancer patients with KRAS mutated tumors. The article, entitled "Elucidation of Pelareorep Pharmacodynamics in a Phase I Trial in Patients with KRAS Mutated Colorectal Cancer,", was published on March 10, 2020, in Molecular Cancer Therapeutics.

In May 2020, at the 2020 American Society of Clinical Oncology (ASCO) Virtual Annual Meeting, we published an ePoster with clinical proof-of-concept data from our phase 1b study in carfilzomib-refractory multiple myeloma patients treated with pelareorep in combination with carfilzomib (Kyprolis®). Data presented in the ePoster demonstrated that the pelareorep-carfilzomib combination treatment resulted in selective replication of pelareorep in cancer cells and beneficial induction of an inflamed tumor environment associated with clinical responses. Key
5


findings included a 50% Overall Response Rate and 83% Clinical Benefit Rate in patients who failed carfilzomib, and T cell activation resulting in the 1st report of cytokine storm associated with tumor response in multiple myeloma.

In November 2020, at the 2020 Society of Neuro-Oncology Annual Meeting, we announced positive results from ReoGlio, an investigator-sponsored, phase 1b trial evaluating the combination of pelareorep and granulocyte-macrophage colony-stimulating factor (GM-CSF) alongside standard chemoradiotherapy and adjuvant temozolomide for the treatment of glioblastoma multiforme (GBM). The results showed a compelling signal of efficacy and demonstrate the safety and tolerability of the pelareorep-based combination therapy in newly diagnosed GBM patients.

Post 2020 Developments:
In February 2021, at the CAR-TCR Summit Europe 2021, we published an ePoster, in collaboration with subject matter expert investigators at the Mayo Clinic, with data from a preclinical study evaluating pelareorep and chimeric antigen receptor (CAR) T cell combination therapy in solid tumors. The results show that loading CAR T cells with pelareorep vastly improved their persistence and efficacy in a murine solid tumor model, in stark contrast to preclinical studies using intratumoral infection with the VSV oncolytic virus that weakened CAR T cells. Efficacy of pelareorep-loaded CAR T cell therapy was further enhanced by boosting mice 8 days later with a single intravenous dose of pelareorep, generating highly persistent CAR T cells, inhibition of recurrent tumor growth, and ultimately tumor cures.

Manufacturing and Process Development

Throughout 2020, we completed a current good manufacturing practices (cGMP) production run and the associated release testing at audited manufacturing facilities, completed two product fills and continued distribution activities with the product supply. As well, we continued our activities to develop clinical and commercial production capabilities to fill pelareorep into vials, representing the next step in the process validation master plan. Process validation is required to ensure that the resulting product meets required specifications and quality standards and will form part of the Company’s submission to regulators, including The United States Food and Drug Administration ("FDA"), for product approval.

Intellectual Property

At the end of 2020, we had been issued 377 patents including 40 US and 17 Canadian patents as well as issuances in other jurisdictions. We have an extensive patent portfolio covering the oncolytic reovirus that we use in our clinical trial program including a composition of matter patent that expires in 2028. Our patent portfolio also includes methods for treating proliferative disorders using modified adenovirus, HSV, parapoxvirus and vaccinia virus.


Financing Activity

Warrant exercise
In 2020, 1,418,369 warrants in connection with our August 2019 underwritten public offering were exercised for gross proceeds of US$1,276,532.

2020 U.S. "at-the-market" equity distribution agreement
In 2020, we sold 5,441,014 common shares for gross proceeds of US$12,628,775 at an average price of US$2.11. We received, net of commissions of US$378,863, proceeds of US$12,249,911. In total, we incurred share issue costs (including commissions) of $884,886.

2018 U.S. "at-the-market" equity distribution agreement
In 2020, we sold 6,741,518 common shares for gross proceeds of US$17,538,342 at an average price of US$2.42. We received, net of commissions of US$526,150, proceeds of US$17,012,192. In total, we incurred share issue costs (including commissions) of $856,754.

Financial Impact

We had estimated that our cash requirements for 2020 to fund operations for the year would be between $23 - $25 million. Our actual cash usage for the year was $22,068,441 for operating activities, $29,305 for the acquisition of property and equipment
6


and $460,724 for the payment of office leases. Our net loss for the year was $22,505,057, which included a non-cash change in fair value of warrant derivative gain of $3,491,928 and a foreign exchange loss of $659,173 primarily due to unrealized translation loss on U.S. dollar denominated cash balances.

Cash Resources

We ended 2020 with cash and cash equivalents totaling $31,219,574 (see “Liquidity and Capital Resources”).

Subsequent Events

Between January 1, 2021 and March 4, 2021, through our June 2020 ATM equity distribution agreement, we issued 5,685,097 common shares for gross proceeds of US$18,503,188 at an average price of US$2.85. We received, net of commissions of US$555,096, proceeds of US$17,948,092.

Expected Pelareorep Development For 2021

Our planned 2021 development activity for pelareorep focuses on our clinical development plan along with our manufacturing and intellectual property programs. Our primary 2021 clinical objectives will focus on BRACELET-1 enrollment, the commencement of enrollment in our GOBLET platform study and the assessment of our clinical data to help form the nature of our registration strategy, our path to approval and possible other clinical development opportunities. While we are making every effort to maintain the timing of our future milestones, the full impact of the COVID-19 pandemic on these milestones is not known. Patient safety is our foremost concern and we will provide updates as they become known.

Our 2021 manufacturing program includes product fills and the associated analytical testing, process development activities as well as labeling, packaging and shipping of pelareorep to our various clinical sites for ongoing and upcoming activities. We also intend to assess a process development plan investigating application of single-use equipment to our drug substance production process. These activities are consistent with our process validation master plan. Finally, our intellectual property program includes filings for additional patents along with monitoring activities required to protect our patent portfolio.

We currently estimate the cash requirements to fund our operations for 2021 will be approximately $28 - $30 million but will depend on our ultimate clinical program. (see “Liquidity and Capital Resources”).

Our Accounting Policies

In preparing our financial statements we use IFRS as issued by the International Accounting Standards Board. IFRS requires that we make certain estimates, judgments and assumptions that we believe are reasonable based upon the information available in selecting our accounting policies. Our selection of accounting policies, along with our estimates and assumptions affect the reported amounts of our assets and liabilities at the date of the financial statements and the reported amounts of expenses during the periods presented.

Critical Accounting Policies

In preparing our financial statements, we are required to make certain estimates, judgments and assumptions that we believe are reasonable based upon the information available. These estimates and assumptions affect the reported amounts of assets at the date of the financial statements and the reported amounts of expenses during the periods presented. Significant estimates are used for, but not limited to, the treatment of our research and development expenditures, revenue recognition, the calculation of share-based compensation and warrant derivative (see Note 4 "Significant Judgments, Estimates and Assumptions") of our audited consolidated financial statements.

The significant accounting policies which we believe are the most critical to aid in fully understanding and evaluating our reported financial results include the following:

Research and Development
Research and development costs are expensed as incurred, net of recoveries. We record accruals for the estimated costs of our research and development activities performed by third parties. The financial terms of the agreements with our vendors are
7


subject to negotiation, vary from contract to contract and may result in uneven payment flows to our vendors. Advance payments for goods or services that will be used or rendered for future research and development activities are capitalized as prepaid expenses and recognized as expense as the related goods are delivered or the related services are performed. We base our estimates on the best information available at the time. However, additional information may become available to us which may allow us to make a more accurate estimate in future periods. In this event, we may be required to record adjustments to research and development expenses in future periods.
Development costs that meet specific criteria related to technical, market and financial feasibility will be capitalized. To date, all development costs have been expensed.
Revenue recognition
Revenue relates to a long-term contract associated with the Licensing Agreement with Adlai Nortye Biopharma Co., Ltd. ("Adlai"). The pricing for the contract was based on the specific negotiations with Adlai and includes non-refundable upfront license fees, development and regulatory milestone payments, royalties and sales-based milestone payments. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable.
Under the Licensing Agreement, we have granted a regional license to our intellectual property. The granting of this license is accounted for as one performance obligation. We have determined that we provide Adlai with a right to access our intellectual property, and therefore recognize revenue related to the upfront license fee over time. Revenue is recognized based on the extent of progress towards completion of the performance obligation using the input method. Under the input method, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. We use this method because Adlai receives and consumes the benefit of our intellectual property as we undertake activities that impact the intellectual property. Management must use judgment in making assumptions and estimates regarding total estimated costs, the complexity of the work to be performed, and the length of time to complete the performance obligation, among other variables.
The contract also provides for development and regulatory milestone payments, royalties and sales-based milestone payments. These amounts are contingent on the occurrence of a future event and therefore give rise to variable consideration. We estimate variable consideration at the most likely amount to which we expect to be entitled. We include estimated amounts in the transaction price when it becomes highly probable that the amount will not be subject to significant reversal when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us. Based on this information and related analysis, any quarterly adjustments to revenue are recognized as necessary in the period they become known.

Significant Estimates

Revenue recognition
We entered into a Licensing Agreement which provides, among other payments, for upfront license fees in exchange for a regional license to our intellectual property. Management uses its judgment in applying the input method when determining the extent of progress towards completion of the performance obligation. Revenue recognition requires assumptions and estimates regarding total estimated costs, the complexity of the work to be performed, and the length of time to complete the performance obligation, among other variables.
Clinical trial expenses
Clinical trial expenses represent a significant component of our research and development expenses and we outsource a significant portion of these activities to third-party contract research organizations. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows to these organizations. Payments under the contracts depend on factors such as the achievement of certain events, successful enrollment of patients, and completion of certain clinical trial activities. As part of preparing the consolidated financial statements, we estimate the expense to recognize based on services that have been performed by the contract research organizations. When making these estimates, we use operational and contractual information from third-party service providers, operational data from internal personnel, and considerable judgment. We base our estimates on the best information available at the time. However, additional information may become available to us which may allow us to make a more accurate estimate in future periods. In this event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain. Such increases or decreases in cost are generally considered to be changes in estimates and will be reflected in research and development expenses in the period identified.
8


Valuation of share-based payments
Estimating fair value for stock options granted requires determining the most appropriate valuation model which is dependent on the terms and conditions of the grant. We have chosen to use the Black-Scholes valuation model (“Black-Scholes” or the “Model”) to calculate the fair value of our stock options. Black-Scholes is currently widely used and accepted by other publicly traded companies. Therefore, we have concluded that Black-Scholes is the appropriate option pricing model to use for our stock options at this time. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life, share price volatility, dividend yield, and forfeiture rate and making assumptions about them. The assumptions and inputs used for estimating fair value for stock options granted issued are disclosed in Note 10 of our audited consolidated financial statements. Consequently, in complying with IFRS and selecting what we believe are the most appropriate assumptions under the circumstances, we have recorded non-cash share-based payment expense for the year of $2,558,974. However, given the above discussion, these amounts could have been different and still be in accordance with IFRS.
Valuation of warrant derivative
Estimating fair value of the warrant derivative at initial measurement, at each exercise date and at each reporting period requires determining the most appropriate valuation model. We have chosen to use Black-Scholes to calculate the fair value of our warrant derivative. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life, share price volatility, dividend yield, and making assumptions about them. The assumptions and inputs used for estimating fair value for warrant derivative are disclosed in Note 8 of our audited consolidated financial statements. Consequently, in complying with IFRS and selecting what we believe are the most appropriate assumptions under the circumstances, we have recorded a non-cash change in fair value of warrant derivative for the year of $3,491,928. However, given the above discussion, these amounts could have been different and still be in accordance with IFRS.
Selected Annual Information
2020
$
2019
$
2018
$
Revenue — — 
Consolidated net loss(1)(2)
(22,505,057)(33,122,888)(17,037,225)
Basic and diluted loss per share(2)(3)
(0.56)(1.50)(1.06)
Total assets(3)
34,345,567 19,657,865 14,865,253 
Cash dividends declared per share(4)
NilNilNil
Notes:
(1) Included in consolidated net loss and loss per common share for 2020 is a non-cash change in fair value of warrant derivative gain of $3,491,928 (2019 - loss of $12,608,808; 2018 - nil).
(2) Included in consolidated net loss and loss per common share for 2020, 2019 , and 2018 are share-based payment expenses of $2,558,974, $1,470,153 and $1,415,833, respectively.
(3) We issued 13,968,527 common shares for net cash proceeds of $40.2 million in 2020 (2019 - 14,798,704 common shares for net cash proceeds of $21.5 million; 2018 - 2,472,909 common shares for net cash proceeds of $13.3 million).
(4) We have not declared or paid any dividends since incorporation.

9


Results of Operations

Net loss for the year was $22,505,057 compared to $33,122,888 and $17,037,225 for the years ending December 31, 2019 and December 31, 2018, respectively. Net loss in 2020 included a non-cash change in fair value of warrant derivative gain of $3,491,928 (2019 - loss of $12,608,808; 2018 - nil) and a foreign exchange loss of $659,173 (2019 - loss of $316,719; 2018 - gain of $610,106).

Research and Development Expenses (“R&D”)
2020
$
2019
$
2018
$
Clinical trial expenses3,054,869 2,189,622 2,938,911 
Manufacturing and related process development expenses3,384,172 3,776,288 2,073,726 
Intellectual property expenditures906,657 827,375 869,991 
Research collaboration expenses317,757 143,966 362,622 
Other R&D expenses4,237,682 3,319,326 3,102,203 
Share-based payments1,043,373 561,420 680,541 
Research and development expenses12,944,510 10,817,997 10,027,994 

Clinical Trial Program

Clinical trial expenses include those costs associated with our clinical trial program which primarily included expenses related to the preparation and development of our multi-study breast cancer program and immunotherapy combinations. Included in clinical trial expenses are regulatory and consulting activities, contract research organization expenses, data management expenses and other costs associated with our clinical trial program.
2020
$
2019
$
2018
$
Clinical trial expenses3,054,869 2,189,622 2,938,911 

During 2020, our clinical trial expenses were $3,054,869 compared to $2,189,622 and $2,938,911 for the years ended December 31, 2019 and December 31, 2018, respectively. In all three years, our clinical trial program focused mainly on our breast cancer program. In 2020, these costs included continued patient enrollment and treatment as well as data analysis for our AWARE-1 study as well as our portion (net of Pfizer's contribution) of trial initiation activities and patient enrollment and treatment related to our BRACELET-1 study. In 2019, these costs included startup activities and patient enrollment and treatment for our AWARE-1 study as well as our portion (net of Pfizer's contribution) of trial initiation activities related to the BRACELET-1 study. We also incurred costs to complete our supporting regulatory documents and key opinion leader activities. In 2018, these costs included phase 3 development activities, activities related to obtaining the special protocol assessment from the FDA and our AWARE-1 study.

In 2020, in addition to activities related to our breast cancer program, we also incurred GOBLET study initiation expenses, costs related to our ongoing ISTs, data management consultant costs, and close-out costs related to our fully enrolled legacy clinical trials. In 2019 and 2018, in addition to activities related to our breast cancer program, we also incurred close-out costs related to our fully enrolled legacy clinical trials, patient enrollment and/or treatment in our checkpoint inhibitor pancreatic cancer study investigating Keytruda® in combination with pelareorep.

We expect our clinical trial expenses to increase in 2021 compared to 2020. During 2021, we will focus on BRACELET-1 enrollment, the commencement of enrollment in our GOBLET platform study and the assessment of our clinical data to help form the nature of our registration strategy, our path to approval and possible other clinical development opportunities.

Manufacturing & Related Process Development (“M&P”)

M&P expenses include product manufacturing and process development activities. Product manufacturing expenses include third-party direct manufacturing costs, quality control testing, fill, label, packaging and storage costs and are net of any recoveries that are received from any R&D collaborators. Process development expenses include costs associated with studies
10


that examine components of our manufacturing and analytical processes looking for improvements and costs associated with the creation of our process validation master plan and related conformity testing.
2020
$
2019
$
2018
$
Product manufacturing expenses3,237,960 3,535,632 1,667,481 
Process development expenses146,212 240,656 406,245 
Manufacturing and related process development expenses3,384,172 3,776,288 2,073,726 

Our M&P expenses for 2020 were $3,384,172 compared to $3,776,288 and $2,073,726 for the years ending December 31, 2019 and December 31, 2018. In 2020, our product manufacturing costs primarily related to completion of a cGMP production run, two product fills and the associated consulting and testing expenses, as well as shipping and storage costs of our bulk and vialed product. In 2019, our product manufacturing costs primarily related to the completion of training and engineering production runs required to support our clinical development plan and the associated product testing, shipping and storage costs of our bulk and vialed product, and an ongoing product fill. In 2018, our product manufacturing activities mainly related to shipping and storage costs of our bulk and vialed product along with startup costs for a product fill and a production run. We also incurred costs related to relabeling activities in line with extended stability data.

Our process development expenses for 2020 were $146,212 compared to $240,656 and $406,245 for the years ending December 31, 2019 and December 31, 2018, respectively. During 2020, our process development activities focused on analytical development and stability studies. During 2019, our process development activities focused on analytic development studies. During 2018, our process development activities focused on analytic development and stability studies.

We expect our M&P expenses for 2021 to increase compared to 2020. In 2021, we expect to fill products and perform the associated analytical testing, carry out process development activities as well as labeling, packaging and shipping of pelareorep to our various clinical sites for ongoing and upcoming activities. We also intend to assess a process development plan investigating application of single-use equipment to our drug substance production process. These activities are consistent with our process validation master plan.

Intellectual Property Expenses

Intellectual property expenses include legal and filing fees associated with our patent portfolio.
2020
$
2019
$
2018
$
Intellectual property expenses906,657 827,375 869,991 

Our intellectual property expenses for 2020 were $906,657 compared to $827,375 and $869,991 for the years ending December 31, 2019 and December 31, 2018, respectively. At the end of 2020, we had been issued over 377 patents including 40 U.S. and 17 Canadian patents, as well as issuances in other jurisdictions.

We expect that our intellectual property expenses will remain consistent in 2021 compared to 2020.

Research Collaborations

Research collaborations are intended to expand our intellectual property related to pelareorep and identify potential licensing opportunities arising from our technology base.
2020
$
2019
$
2018
$
Research collaborations317,757 143,966 362,622 

During 2020, our research collaboration expenses were $317,757 compared to $143,966 and $362,622 for the years ending December 31, 2019 and December 31, 2018, respectively. In 2020, 2019 and 2018, our research collaborations included studies investigating the interaction of the immune system with pelareorep, and biomarker studies.
11


We expect that our research collaborations in 2021 will increase compared to 2020. We expect to complete our ongoing collaborative program carried over from 2020 and will continue to be selective in the types of new collaborations we enter into in 2021.

Other Research and Development Expenses

Other research and development expenses include compensation expenses for employees (excluding share-based payments), travel and other miscellaneous R&D expenses.
2020
$
2019
$
2018
$
R&D personnel-related expenses4,135,300 3,096,231 2,868,251 
Other R&D expenses102,382 223,095 233,952 
Other Research and Development expenses4,237,682 3,319,326 3,102,203 

In 2020, our Other Research and Development expenses were $4,237,682 compared to $3,319,326 and $3,102,203 for the years ending December 31, 2019 and December 31, 2018, respectively. Our Other Research and Development activities focused on supporting our clinical development program along with other third-party trials and clinical trials sponsored by Oncolytics.

The change in R&D personnel-related expenses in 2020 compared to 2019 was due to an increase in headcount as we expanded our U.S. office, recruitment-related costs and a change in salary level, partly offset by personnel cost recovery from Pfizer related to BRACELET-1. The change in R&D personnel-related expenses in 2019 compared to 2018 was due to the timing of filling open positions in our U.S. office and a change in salary level, partly offset by personnel cost recovery from Pfizer related to BRACELET-1.

The change in Other R&D expenses in 2020 compared to 2019 and 2018 was primarily due to decreased travel expenses as a result of COVID-19.

We expect our Other Research and Development expenses to increase in 2021 compared to 2020 as we look to continue expanding our U.S. office.

Share-Based Payments
2020
$
2019
$
2018
$
Share-based payments1,043,373 561,420 680,541 

Non-cash share-based payments for the year ending December 31, 2020 were $1,043,373 compared to $561,420 and $680,541 for the years ending December 31, 2019 and December 31, 2018, respectively. We incurred share-based payment expenses associated with the vesting of options and share awards to officers and employees. In the third quarter of 2020, we also recognized a recovery of share-based payment expenses as a result of changes in personnel and the forfeiture of unvested options.












12


Operating Expenses
2020
$
2019
$
2018
$
Public company-related expenses7,432,418 5,089,918 3,041,226 
Office expenses3,120,290 3,074,416 3,372,898 
Depreciation - property and equipment88,957 122,982 95,375 
Depreciation - right-of-use assets357,230 362,592 — 
Share-based payments1,515,601 908,733 735,292 
Operating expenses12,514,496 9,558,641 7,244,791 

Public company-related expenses include costs associated with investor relations and business development and financial advisory activities, legal and accounting fees, corporate insurance, director fees and transfer agent and other fees relating to our U.S. and Canadian stock listings. In 2020, we incurred public company-related expenses of $7,432,418 compared to $5,089,918 and $3,041,226 for the years ending December 31, 2019 and December 31, 2018, respectively. The change in public company-related expenses in 2020 compared to 2019 was due to increased directors and officers insurance premiums, increased investor relations and business development activities and the associated professional expenses. This is partly offset by decreased travel related expenses as a result of COVID-19 and transaction costs of $233,143 incurred in 2019 related to our August 2019 public offering (see Note 9 of our audited consolidated financial statements). The change in public company-related expenses in 2019 compared to 2018 was due to increased investor relations and business development activities, transaction costs of $233,143 related to our August 2019 public offering as discussed above, as well as increased insurance premiums. This is partly offset by lower professional fees, including legal fees and costs related to the special meeting of shareholders held in February 2018.

Office expenses include compensation costs (excluding share-based payments), rent related to short-term leases, and other office-related costs. In 2020, we incurred office expenses of $3,120,290 compared to $3,074,416 and $3,372,898 for the years ending December 31, 2019 and December 31, 2018, respectively. The change in office expenses in 2020 compared to 2019 was primarily due to the timing of filling open positions in our U.S. office and a change in salary level. The change in office expenses in 2019 compared to 2018 was due to a reduction in office rent expense following the adoption of IFRS 16 with an increase in depreciation of the newly created right-of-use assets and personnel cost recovery from Pfizer related to BRACELET-1, and is partly offset by change in salary level.

In 2020, our non-cash share-based payment expenses were $1,515,601 compared to $908,733 and $735,292 for the years ending December 31, 2019 and December 31, 2018, respectively. In 2020, 2019 and 2018, we incurred share-based payment expenses associated with the vesting of granted options and share awards to officers, employees, consultants and independent board members.

We expect our operating expenses in 2021 to increase compared to 2020.

Change in Fair Value of Warrant Derivative

We issued warrants in connection with our August 2019 underwritten public offering. Warrants issued with an exercise price denominated in a foreign currency are reported as a liability until they are exercised or expire. These warrants are adjusted to fair value at each exercise date and at each reporting period and any change in fair value is recorded in the consolidated statements of loss and comprehensive loss. Gains and losses resulting from the revaluation of the warrant derivative are non-cash and do not impact our cash flows.
2020
$
2019
$
2018
$
Change in fair value of warrant derivative3,491,928 (12,608,808)— 

For the year ending December 31, 2020, we recognized a gain of $3,491,928 on the change in fair value of our warrant derivative compared to a loss of $12,608,808 and nil for the years ending December 31, 2019 and December 31, 2018, respectively. The change in fair value in 2020 was based on several factors including changes in market price of our shares to US$2.38 on December 31, 2020 from US$4.76 on December 31, 2019, and the revaluation on warrants exercised. The change in fair value in 2019 was based on several factors including changes in the market price of our shares to US$4.76 on December 31, 2019 from US$0.54 at warrant issuance, the revaluation on warrants exercised, as well as a decrease in the remaining term
13


of the warrants and changes in estimated future volatility of our common shares. The number of outstanding warrants was 265,757 and 1,684,126 as at December 31, 2020 and December 31, 2019, respectively.

Foreign Exchange (Loss) Gain
2020
$
2019
$
2018
$
Foreign exchange (loss) gain(659,173)(316,719)610,106 

For the year ending December 31, 2020, our foreign exchange loss was $659,173 compared to a loss of $316,719 and a gain of $610,106 for the years ending December 31, 2019 and December 31, 2018, respectively. The foreign exchange (loss) gain incurred in all three years was primarily due to unrealized translation (loss) gain on U.S. dollar denominated cash balances.

Summary of Quarterly Results
(in thousands, except per share data)
20202019
Dec.Sept.JuneMarchDec.Sept.JuneMarch
Revenue— — — — — — — — 
Net (loss) income(1)(2)
(9,329)(6,749)(6,827)400 (19,402)(3,529)(5,254)(4,939)
Basic (loss) earnings per common share(1)(2)
$(0.21)$(0.16)$(0.17)$0.01 $(0.71)$(0.16)$(0.26)$(0.27)
Diluted loss per common share(3)
$(0.21)$(0.16)$(0.17)$(0.04)$(0.71)$(0.16)$(0.26)$(0.27)
Total assets(4)
34,34631,242 34,604 34,553 19,658 16,285 15,302 16,461 
Total cash(4)
31,220 26,711 29,911 30,567 14,148 12,299 12,276 14,214 
Total long-term debt     — — — 
Cash dividends declared(5)
NilNilNilNilNilNilNilNil
(1)Included in consolidated net (loss) income and (loss) earnings per common share between December 2020 and July 2019 are non-cash change in fair value of warrant derivative (loss) gain of $(213,168), $60,264, $(507,150), $4,151,982, $(12,486,310) and $(122,498), respectively. There was no change in fair value of warrant derivative expense between June 2019 and January 2019.
(2)Included in net (loss) income and (loss) earnings per common share between December 2020 and January 2019 are quarterly share-based payment expenses of $1,704,453, $201,076, $260,640, $392,805, $658,662, $250,384, $260,184 and $300,923, respectively.
(3)Q1 2020 included the effect of dilutive warrant derivative, stock options and share awards. For all other periods presented, the effect of any potential exercise of our stock options and warrants outstanding during the year has been excluded from the calculation of diluted loss per common share, as it would be anti-dilutive.
(4)We issued 13,968,527 common shares for net cash proceeds of $40.2 million in 2020 (2019 - 14,798,704 common shares for net cash proceeds of $21.5 million).
(5)We have not declared or paid any dividends since incorporation.

14


Fourth Quarter

Statement of loss for the three-month periods ended December 31, 2020 and 2019:
For the three-month periods ending December 31,2020
$
2019
$
Expenses
   Research and development4,061,464 2,696,443 
   Operating4,010,894 4,132,548 
Loss before the following(8,072,358)(6,828,991)
 Change in fair value of warrant derivative(213,168)(12,486,310)
   Foreign exchange loss(1,052,531)(114,279)
   Interest income, net9,385 27,938 
Loss before income taxes(9,328,672)(19,401,642)
   Income tax expense — 
Net loss(9,328,672)(19,401,642)
   Other comprehensive loss - translation adjustment(144,433)(56,754)
Net comprehensive loss(9,473,105)(19,458,396)
Basic and diluted loss per common share(0.21)(0.71)
Weighted average number of shares (basic and diluted)44,108,936 27,200,947 

Fourth Quarter Review of Operations

For the three-month period ended December 31, 2020, our net loss was $9,328,672 compared to $19,401,642 for the three-month period ended December 31, 2019. Net loss for the three-month period ended December 31, 2020 included a non-cash change in fair value of warrant derivative loss of $213,168 (2019 - loss of $12,486,310) and a foreign exchange loss of $1,052,531 (2019 - loss of $114,279).

Research and Development Expenses (“R&D”)
2020
$
2019
$
Clinical trial expenses1,200,998 581,436 
Manufacturing and related process development expenses434,943 474,077 
Intellectual property expenses106,940 68,036 
Research collaboration expenses70,815 41,391 
Other R&D expenses1,430,167 1,295,083 
Share-based payments817,601 236,420 
Research and development expenses4,061,464 2,696,443 

Clinical Trial Expenses
2020
$
2019
$
Clinical trial expenses1,200,998 581,436 

During the fourth quarter of 2020, our clinical trial expenses were $1,200,998 compared to $581,436 for the fourth quarter of 2019. In the fourth quarter of 2020, these activities mainly related to continued patient enrollment and treatment as well as data analysis for our AWARE-1 study and our portion (net of Pfizer's contribution) of patient enrollment and treatment related to our BRACELET-1 study. In the fourth quarter of 2019, these activities mainly related to patient enrollment and treatment for our AWARE-1 study and our portion (net of Pfizer's contribution) of trial initiation activities related to our BRACELET-1 study.

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In addition to the activities related to our breast cancer program, in the fourth quarter of 2020, we also incurred trial initiation costs related to our GOBLET study, costs related to our ongoing ISTs and data management consulting costs. In the fourth quarter of 2019, our clinical activities also included costs related to patient enrollment and/or treatment in our checkpoint inhibitor pancreatic cancer study investigating Keytruda® in combination with pelareorep and close-out costs related to our fully enrolled legacy clinical trials.

Manufacturing & Related Process Development Expenses (“M&P”)
2020
$
2019
$
Product manufacturing expenses399,522 393,309 
Process development expenses35,421 80,768 
Manufacturing and related process development expenses434,943 474,077 

During the fourth quarter of 2020, our M&P expenses were $434,943 compared to $474,077 for the fourth quarter of 2019. During the fourth quarters of 2020 and 2019, our product manufacturing costs mainly related to shipping and storage costs of our bulk and vialed product, as well as costs related to a product fill and product test.

Our process development activity for the fourth quarter of 2020 and 2019 related to analytic development studies.

Intellectual Property Expenses
2020
$
2019
$
Intellectual property expenses106,940 68,036 

Our intellectual property expenses for the fourth quarter of 2020 were $106,940 compared to $68,036 for the fourth quarter of 2019. At the end of the fourth quarter of 2020, we had been issued over 377 patents including 40 U.S. and 17 Canadian patents, as well as issuances in other jurisdictions.
Research Collaboration Expenses
2020
$
2019
$
Research collaboration expenses70,81541,391

Our research collaboration expenses were $70,815 for the fourth quarter of 2020 compared to $41,391 for the fourth quarter of 2019. During the fourth quarters of 2020 and 2019, our research collaborations were primarily focused on studies investigating the interaction of the immune system and pelareorep.

Other Research and Development Expenses
2020
$
2019
$
R&D personnel-related expenses1,406,242 1,219,536 
Other R&D expenses23,925 75,547 
Other research and development expenses1,430,167 1,295,083 

Our other research and development expenses were $1,430,167 in the fourth quarter of 2020 compared to $1,295,083 in the fourth quarter of 2019. Our R&D personnel-related expenses increased in the fourth quarter of 2020 compared to the fourth quarter of 2019 primarily due to the timing of filling open positions in our U.S. office and a change in salary level.

The change in Other R&D expenses in the fourth quarter of 2020 compared to the fourth quarter of 2019 was primarily due to decreased travel expenses as a result of COVID-19.




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Share-Based Payments
2020
$
2019
$
Share-based payments817,601 236,420 

During the fourth quarters of 2020 and 2019, we incurred share-based payment expenses associated with the vesting of granted options and share awards to officers and employees.

Operating Expenses
2020
$
2019
$
Public company-related expenses2,037,925 2,590,135 
Office expenses978,484 1,004,988 
Depreciation - property and equipment21,437 24,792 
Depreciation - right-of-use assets86,196 90,391 
Share-based payments886,852 422,242 
Operating expenses4,010,894 4,132,548 

Our operating expenses for the fourth quarter of 2020 were $4,010,894 compared to $4,132,548 for the fourth quarter of 2019. Public company-related expenses include costs associated with investor relations, business development and financial advisory activities, legal and accounting fees, corporate insurance, director fees and transfer agent and other fees relating to our Canadian and U.S. stock listings. During the fourth quarter of 2020, our public company-related expenses were $2,037,925 compared to $2,590,135 for the fourth quarter of 2019. The change was primarily due to lower investor relation activities and lower travel related expenses as a result of COVID-19, partly offset by increased insurance premiums.

Office expenses include compensation costs (excluding share-based payments), rent related to short-term leases, and other office-related costs. During the fourth quarter of 2020, our office expenses were $978,484 compared to $1,004,988 for the fourth quarter of 2019. The change in the fourth quarter of 2020 compared to the fourth quarter of 2019 was primarily due to the timing of filling open positions in our U.S. office and a change in salary level.

Our non-cash share-based payment expenses in the fourth quarter of 2020 were $886,852 compared to $422,242 for the fourth quarter of 2019. We incurred share-based payment expenses associated with the vesting of granted options and share awards to officers, employees, consultants and independent board members.

Change in Fair Value of Warrant Derivative
2020
$
2019
$
Change in fair value of warrant derivative(213,168)(12,486,310)

We recognized a loss of $213,168 on the change in fair value of our warrant derivative compared to a loss of $12,486,310 for the fourth quarter of 2019. The change in fair value in 2020 was based on several factors including changes in the market price of our shares to US$2.38 on December 31, 2020 from US$1.69 on September 30, 2020. The change in fair value in 2019 was based on several factors including changes in the market price of our shares to US$4.76 on December 31, 2019 from US$0.57 on September 30, 2019, the revaluation on warrants exercised in the quarter, as well as a decrease in the remaining term of the warrants and changes in estimated future volatility of our common shares. Gains and losses resulting from the revaluation of the warrant derivative are non-cash and do not impact our cash flows. The number of outstanding warrants was 265,757 and 1,684,126 as at December 31, 2020 and December 31, 2019, respectively.






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Foreign Exchange Loss
2020
$
2019
$
Foreign exchange loss(1,052,531)(114,279)

Our foreign exchange loss was $1,052,531 for the fourth quarter of 2020 compared to a loss of $114,279 for the fourth quarter of 2019. The foreign exchange loss incurred in 2020 and 2019 was primarily due to unrealized translation loss on U.S. dollar denominated cash balance.

Liquidity and Capital Resources
2020 Financing Activities

Warrant exercise
In 2020, 1,418,369 warrants in connection with our August 2019 underwritten public offering were exercised for gross proceeds of US$1,276,532.

2020 U.S. "at-the-market" equity distribution agreement
In 2020, we sold 5,441,014 common shares for gross proceeds of US$12,628,775 at an average price of US$2.11. We received, net of commissions of US$378,863, proceeds of US$12,249,911. In total, we incurred share issue costs (including commissions) of $884,886.

2018 U.S. "at-the-market" equity distribution agreement
In 2020, we sold 6,741,518 common shares for gross proceeds of US$17,538,342 at an average price of US$2.42. We received, net of commissions of US$526,150, proceeds of US$17,012,192. In total, we incurred share issue costs (including commissions) of $856,754.
2019 Financing Activities

Public offering
On August 16, 2019, pursuant to an underwritten public offering, 4,619,773 units were sold at a purchase price of US$0.81 per unit for gross proceeds of US$3,742,016. Each unit included one common share with a fair value of US$0.54 and one common share purchase warrant with a fair value of US$0.27. Each common share purchase warrant entitles the holder to purchase one common share at an exercise price of US$0.90 until August 16, 2024. We incurred transaction costs of $699,427 of which $466,284 were allocated to share issue costs and $233,143 were allocated to operating expenses, based on their relative fair values. In 2019, 2,935,647 warrants were exercised for gross proceeds of US$2,642,082.

2018 U.S. "at-the-market" equity distribution agreement
In 2019, we sold 4,425,040 common shares for gross proceeds of US$6,390,691 at an average price of US$2.42. We received, net of commission of US$191,721, proceeds of US$6,198,970. In total, we incurred share issue costs of (including commissions) of $344,834.

Common Stock Purchase Agreement
In 2019, we sold 2,477,665 common shares for gross proceeds of US$4,055,725 and issued 17,278 commitment shares. The commitment shares were fair valued at US$29,758 and were recorded as share issue costs in addition to cash share issue costs of $3,757.

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Liquidity

As at December 31, 2020 and 2019, we had cash and cash equivalents and working capital positions as follows:
2020
$
2019
$
Cash and cash equivalents31,219,574 14,148,021 
Working capital position31,558,550 14,570,105 

The increase in our cash and cash equivalent reflects the cash usage from our operating activities of $22.1 million and $0.5 million for the payment of office leases along with the cash provided by our financing activities of $40.2 million for the year ending December 31, 2020.

We desire to maintain adequate cash reserves to support our planned activities which include our clinical trial program, product manufacturing, administrative costs, and our intellectual property expansion and protection. To date, we have funded our operations mainly through the issue of additional capital via public and private offerings and through the exercise of warrants and stock options. In 2020, we were able to raise funds through our U.S. ATM.

We have no assurances that we will be able to raise additional funds through the sale of our common shares, consequently, we will continue to evaluate all types of financing arrangements. On June 12, 2020, we renewed our short form base shelf prospectus (the "Base Shelf") that qualifies for distribution of up to 150 million of common shares, subscription receipts, warrants, or units (the "Securities") in either Canada, the U.S. or both. Under a Base Shelf, we may sell Securities to or through underwriters, dealers, placement agents or other intermediaries and also may sell Securities directly to purchasers or through agents, subject to obtaining any applicable exemption from registration requirements. The distribution of Securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be subject to change, at market prices prevailing at the time of sale, or at prices related to such prevailing market prices to be negotiated with purchasers and as set forth in an accompanying Prospectus Supplement.
Renewing our Base Shelf provides us with additional flexibility when managing our cash resources as, under certain circumstances, it shortens the time period required to close a financing and is expected to increase the number of potential investors that may be prepared to invest in our company. Funds received as a result of using our Base Shelf would be used in line with our Board approved budget and multi-year plan. Our renewed Base Shelf will be effective until July 12, 2022.

Our Base Shelf allowed us to enter into our ATM equity distribution agreement in June 2020 (see Note 9 of our audited consolidated financial statements). We will use this equity arrangement to assist us in achieving our capital objective. This arrangement provides us with the opportunity to raise capital at our sole discretion providing us with the ability to better manage our cash resources.
Our ATM equity distribution agreement provide us with access to, subject to terms and conditions, US$40 million of which we have raised gross proceeds of approximately US$12.6 million at December 31, 2020. We expect to continue to access our equity arrangement to help support our current clinical trial, manufacturing, intellectual property and collaboration programs.

We anticipate that the expected cash usage from our operations in 2021 will be approximately $28 - $30 million. We continue to manage our research and development plan with the objective of ensuring optimal use of our existing resources. Additional activities continue to be subject to adequate resources and we believe we will have sufficient cash resources and access to additional cash resources through our equity arrangement to fund our presently planned operations into 2022. Factors that will affect our anticipated cash usage in 2021, and for which additional funding might be required include, but are not limited to, expansion of our clinical trial program, the timing of patient enrollment in our approved clinical trials, the actual costs incurred to support each clinical trial, the number of treatments each patient will receive, the timing of R&D activity with our clinical trial research collaborations, the number, timing and costs of manufacturing runs required to conclude the validation process and supply product to our clinical trial program, and the level of collaborative activity undertaken.

We are not subject to externally imposed capital requirements and there have been no changes in how we define or manage our capital in 2020.

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Contractual Obligations

We have the following contractual obligations as at December 31, 2020:
Contractual ObligationsPayments Due by Period

Total
$
Less than 1 year
$

2 -3 years
$

4 - 5 years
$
More than
5 years
$
Capital lease obligationsNil— — — — 
Operating lease458,512 286,509 172,003 — — 
Purchase obligations9,360,653 6,240,435 3,120,218 — — 
Other long term obligationsNil— — — — 
Total contractual obligations9,819,165 6,526,944 3,292,221 — — 

We expect to fund our capital expenditure requirements and commitments with existing working capital.

Off-Balance Sheet Arrangements

As at December 31, 2020, we had not entered into any off-balance sheet arrangements.

Transactions with Related Parties

In 2020, 2019 and 2018, we did not enter into any other related party transactions other than compensation paid to Key Management Personnel disclosed in Note 22 of our audited consolidated financial statements.

Financial Instruments and Other Instruments

Our financial instruments consist of cash and cash equivalents, other receivables, accounts payable and warrant derivative. As at December 31, 2020, the carrying amount of our cash and cash equivalents, other receivables and accounts payable approximated their fair value. The warrant derivative is a recurring Level 2 fair value measurement as these warrants have not been listed on an exchange and therefore do not trade on an active market. As at December 31, 2020, the fair value of our warrant derivative was $531,228 (December 31, 2019 - $8,508,764).
Credit risk
Credit risk is the risk of financial loss if a counterparty to a financial instrument fails to meet its contractual obligations. We are exposed to credit risk on our cash and cash equivalents in the event of non-performance by counterparties, but we do not anticipate such non-performance. Our maximum exposure to credit risk at the end of the period is the carrying value of our cash and cash equivalents and other receivables.

We mitigate our exposure to credit risk connected to our cash and cash equivalent by maintaining our primary operating and investment bank accounts with Schedule I banks in Canada. For our foreign domiciled bank accounts, we use referrals or recommendations from our Canadian banks to open foreign bank accounts and these accounts are used solely for the purpose of settling accounts payable or payroll.

Interest rate risk
Interest rate risk is the risk that future cash flows of a financial instrument will fluctuate because of changes in market interest rates. We are exposed to interest rate risk through our cash and cash equivalents. We mitigate this risk through our investment policy that only allows investment of excess cash resources in investment grade vehicles while matching maturities with our operational requirements.
 
Fluctuations in market rates of interest do not have a significant impact on our results of operations due to the short term to maturity of the investments held.
 
Foreign exchange risk
Foreign exchange risk arises from changes in foreign exchange rates that may affect the fair value or future cash flows of our financial assets or liabilities. We are primarily exposed to the risk of changes in the Canadian dollar relative to the U.S. dollar,
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British pound and Euro as a portion of our financial assets and liabilities are denominated in such currencies. The impact of a $0.01 increase in the value of the U.S. dollar against the Canadian dollar would have decreased our net comprehensive loss in 2020 by approximately $172,000. The impact of a $0.10 increase in the value of the British pound against the Canadian dollar would have increased our net comprehensive loss in 2020 by approximately $20,000. The impact of a $0.10 increase in the value of the Euro against the Canadian dollar would have increased our net comprehensive loss in 2020 by approximately $3,000.
 
We mitigate our foreign exchange risk by maintaining sufficient foreign currencies, through the purchase of foreign currencies or receiving foreign currencies from financing activities, to settle our foreign accounts payable.
Balances in foreign currencies at December 31, 2020 are as follows:

U.S. dollars
$

British pounds
£
Euro
Cash and cash equivalents23,134,11326,76837,347
Accounts payable and other liabilities(455,588)(2,244)(930)
Warrant derivative(417,238)
22,261,28724,52436,417
Liquidity risk
Liquidity risk is the risk that we will encounter difficulty in meeting obligations associated with financial liabilities. We manage liquidity risk through the management of our capital structure as outlined in the notes to our audited financial statements. Accounts payable are all due within the current operating period.

Other MD&A Requirements

We have 52,083,924 common shares outstanding at March 4, 2021. If all of our options, restricted share units and performance share units (3,878,852), common share purchase warrants with a $9.025 exercise price (16,443,500 warrants exercisable into 1,730,894 common shares) and common share purchase warrants with a US$0.90 exercise price (110,572), were exercised or were to vest, we would have 57,804,242 common shares outstanding.
Our 2020 annual report on Form 20-F will be available on www.sedar.com.

Disclosure Controls and Procedures

Evaluation of Disclosure Controls and Procedures:
Our chief executive and financial officers reviewed and evaluated our disclosure controls and procedures. Based on that evaluation, they have concluded that our disclosure controls and procedures are effective in providing timely material information relating to the Company.

Management's Annual Report on Internal Control Over Financial Reporting:
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, and has designed such internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of financial statements for external purposes in accordance with International Financial Reporting Standards.

Management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our internal controls and procedures over financial reporting will prevent all error and all fraud. A control system can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Also,
21


projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has evaluated the design and operation of our internal control over financial reporting as of December 31, 2020, and has concluded that such internal control over financial reporting is effective as of December 31, 2020. There are no material weaknesses that have been identified by management in this regard. This assessment was based on criteria for effective internal control over financial reporting described in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework).

Changes in Internal Controls over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the last fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Risk Factors Affecting Future Performance

General Risk Factors

Prospects for biotechnology companies in the research and development stage should generally be regarded as speculative. It is not possible to predict, based upon studies in animals, or early studies in humans, whether a new therapeutic will ultimately prove to be safe and effective in humans, or whether necessary and sufficient data can be developed through the clinical trial process to support a successful product application and approval.
If a product is approved for sale, product manufacturing at a commercial scale and significant sales to end users at a commercially reasonable price may not be successful. There can be no assurance that we will generate adequate funds to continue development, or will ever achieve significant revenues or profitable operations. Many factors (e.g. competition, patent protection, appropriate regulatory approvals) can influence the revenue and product profitability potential.
In developing a pharmaceutical product, we rely upon our employees, contractors, consultants and collaborators and other third-party relationships, including the ability to obtain appropriate product liability insurance. There can be no assurance that this reliance and these relationships will continue as required.
In addition to developmental and operational considerations, market prices for securities of biotechnology companies generally are volatile, and may or may not move in a manner consistent with the progress we have made or are making.

All of our potential products, including pelareorep, are in the research and development stage and will require further development and testing before they can be marketed commercially.

Prospects for companies in the biotechnology industry generally may be regarded as uncertain given the nature of the industry and, accordingly, investments in biotechnology companies should be regarded as speculative. We are currently in the research and development stage on one product, pelareorep, for human application, the riskiest stage for a company in the biotechnology industry. It is not possible to predict, based upon studies in animals and early-stage human clinical trials, whether pelareorep will prove to be safe and effective in humans. Pelareorep will require additional research and development, including extensive additional clinical testing, before we will be able to obtain the approvals of the relevant regulatory authorities in applicable countries to market pelareorep commercially. There can be no assurance that the research and development programs we conduct will result in pelareorep or any other products becoming commercially viable products, and in the event that any product or products result from the research and development program, it is unlikely they will be commercially available for a number of years.
To achieve profitable operations we, alone or with others, must successfully develop, introduce and market our products. To obtain regulatory approvals for products being developed for human use, and to achieve commercial success, human clinical trials must demonstrate that the product is safe for human use and that the product shows efficacy. Unsatisfactory results obtained from a particular study relating to a program may cause us to abandon our commitment to that program or the product being tested. No assurances can be provided that any current or future animal or human test, if undertaken, will yield favorable results. If we are unable to establish that pelareorep is a safe, effective treatment for cancer, we may be required to abandon further development of the product and develop a new business strategy.


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There are inherent risks in pharmaceutical research and development.
Pharmaceutical research and development is highly speculative and involves a high and significant degree of risk. The marketability of any product we develop will be affected by numerous factors beyond our control, including but not limited to:

the discovery of unexpected toxicities or lack of sufficient efficacy of products which make them unattractive or unsuitable for human use;
preliminary results as seen in animal and/or limited human testing may not be substantiated in larger, controlled clinical trials;
manufacturing costs or other production factors may make manufacturing of products ineffective, impractical and non-competitive;
proprietary rights of third parties or competing products or technologies may preclude commercialization;
requisite regulatory approvals for the commercial distribution of products may not be obtained; and
other factors may become apparent during the course of research, up-scaling or manufacturing which may result in the discontinuation of research and other critical projects.

Our products under development have never been manufactured on a commercial scale, and there can be no assurance that such products can be manufactured at a cost or in a quantity to render such products commercially viable. Production and utilization of our products may require the development of new manufacturing technologies and expertise. The impact on our business in the event that new manufacturing technologies and expertise are required to be developed is uncertain. There can be no assurance that we will successfully meet any of these technological challenges or others that may arise in the course of development.

Our business, including our research and development operations, has been and may continue to be adversely affected by the COVID-19 pandemic.
During 2020, the global outbreak of a novel coronavirus identified as the SARS-coronavirus-2 (SARS-CoV-2) led to the associated coronavirus infectious disease 2019 (COVID-19). COVID-19 has had a broad adverse impact on the global economy across many industries and has resulted in significant governmental measures being implemented to control the spread of the virus, including quarantines, travel restrictions and business shutdowns, as well as significant volatility in global financial markets. In March 2020, we transitioned our workforce to a remote working arrangement to protect the health and safety of our employees and in accordance with to enhanced health and safety protocols consistent with guidelines issued by local health authorities. Clinical trial activities, including patient enrollment and site activation, were not materially delayed due to COVID-19. To date, COVID-19 has not had a material impact on our financial condition, liquidity or longer-term strategic development.

The extent to which COVID-19 may cause more significant disruptions to our business and greater impacts to our results of operations will depend on future developments, which are highly uncertain and cannot be predicted, such as the duration of the outbreak (including future potential waves or cycles), travel restrictions and social distancing, business closures or business disruptions and the effectiveness of actions taken to contain and treat the disease and to address its impact, including on financial markets.

If the COVID-19 pandemic worsens or continues for a prolonged period of time, particularly in regions where we or our collaborators and suppliers do business, we could experience disruptions that could significantly impact our current and planned clinical trials, preclinical research and other business activities, including:

disruption to and delays in preclinical research activities due to an extended closure or reduced capacity of lab facilities;
further delays or difficulties in enrolling patients in our ongoing and planned clinical trials;
patients discontinuing their treatment or follow-up visits;
further delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;
disruptions in supply, logistics or other activities related to the procurement of materials, which could have a negative impact on our ability to conduct preclinical research, initiate or complete our clinical trials;
diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of clinical trials;
interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others;
23


interruption of key business activities due to illness and/or quarantine of key individuals and delays associated with recruiting, hiring and training new temporary or permanent replacements for such key individuals, both internally and at our third-party service providers and strategic partners;
limitations in resources that would otherwise be focused on the conduct of our business or our current or planned clinical trials or preclinical research, including because of sickness, the desire to avoid contact with large groups of people, restrictions on travel, or prolonged stay-at-home or similar working arrangements;
delays in receiving approvals from regulatory authorities to initiate our planned clinical trials;
changes in regulations as part of a response to the COVID-19 pandemic which may require us to change the ways in which our clinical trials are conducted and incur unexpected costs, or require us to discontinue clinical trials altogether;
delays in necessary interactions with regulators (including the FDA), ethics committees and other important agencies and contractors due to limitations in employee resources or furlough of government or contractor personnel;
disruptions to our strategic partners’ operations, which could delay the development of our product candidates in certain geographical regions and thereby affect the timing of development and commercial milestone payments and royalties on potential future product sales we may receive; and
limitations on our ability to recruit preclinical research, clinical, regulatory and other professional staff on the timeframe required to support our research and development programs.

In addition, COVID-19 could result in the continued significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity. Such financial market volatility may continue and the value of our common shares may be adversely impacted.

The COVID-19 pandemic continues to rapidly evolve, and we will continue to monitor the effects of COVID-19 on our business. While the extent of the impact of the COVID-19 pandemic on our business and financial results is uncertain, a continued and prolonged public health crisis such as the COVID-19 pandemic could have a material negative impact on our business, financial condition and operating results.

Pharmaceutical products are subject to intense regulatory approval processes.
The regulatory process for pharmaceuticals, which includes preclinical studies and multiple phases of clinical trials of each compound to establish its safety and efficacy, takes many years and requires the expenditure of substantial resources. Moreover, if regulatory approval of a drug is granted, such approval may entail limitations on the indicated uses for which it may be marketed. Failure to comply with applicable regulatory requirements can, among other things, result in suspension of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution. Further, government policy may change, and additional government regulations may be established that could prevent or delay regulatory approvals for our products. In addition, a marketed drug and its manufacturer are subject to continual review. Later discovery of previously unknown problems with the product or manufacturer may result in restrictions on such product or manufacturer, including withdrawal of the product from the market.

The FDA and similar regulatory authorities in other countries may deny approval of a new drug application if required regulatory criteria are not satisfied, or may require additional testing. Product approvals may be withdrawn if compliance with regulatory standards is not maintained or if problems occur after the product reaches the market. The FDA and similar regulatory authorities in other countries may require further testing and surveillance programs to monitor the pharmaceutical product that has been commercialized. Non-compliance with applicable requirements can result in fines and other judicially imposed sanctions, including product withdrawals, product seizures, injunction actions and criminal prosecutions.

In addition to our own pharmaceuticals, we may supply active pharmaceutical ingredients and advanced pharmaceutical intermediates for use in our customers’ drug products. The final drug products in which the pharmaceutical ingredients and advanced pharmaceutical intermediates are used, however, are subject to regulation for safety and efficacy by the FDA and possibly other regulatory authorities in other jurisdictions. Such products must be approved by such agencies before they can be commercially marketed. The process of obtaining regulatory clearance for marketing is uncertain, costly and time consuming. We cannot predict how long the necessary regulatory approvals will take or whether our customers will ever obtain such approval for their products. To the extent that our customers do not obtain the necessary regulatory approvals for marketing new products, our product sales could be adversely affected.

The FDA and other governmental regulators have increased requirements for drug purity and have increased environmental burdens upon the pharmaceutical industry. Because pharmaceutical drug manufacturing is a highly regulated industry, requiring significant documentation and validation of manufacturing processes and quality control assurance prior to the approval of the facility to manufacture a specific drug, our manufacturing facilities may never become approved of, or there can be
24


considerable transition time between the initiation of a contract to manufacture a product and the actual initiation of manufacture of that product. Any lag time in the initiation of a contract to manufacture product and the actual initiation of manufacture could cause us to lose profits or incur liabilities.

The pharmaceutical regulatory regime in Europe and other countries is generally similar to that of the United States. We could face similar risks in these other jurisdictions as the risks described above.

Our operations and products may be subject to other government manufacturing and testing regulations.

Securing regulatory approval for the marketing of therapeutics by the FDA in the United States and similar regulatory agencies in other countries is a long and expensive process, which can delay or prevent product development and marketing. Approval to market products may be for limited applications or may not be received at all.

The products we anticipate manufacturing will have to comply with the FDA’s cGMP and other FDA and local government guidelines and regulations, including other international regulatory requirements and guidelines. Additionally, certain of our customers may require the manufacturing facilities contracted by us to adhere to additional manufacturing standards, even if not required by the FDA. Compliance with cGMP regulations requires manufacturers to expend time, money and effort in production and to maintain precise records and quality control to ensure that the product meets applicable specifications and other requirements. The FDA and other regulatory bodies periodically inspect drug-manufacturing facilities to ensure compliance with applicable cGMP requirements. If the manufacturing facilities contracted by us fail to comply with the cGMP requirements, the facilities may become subject to possible FDA or other regulatory action and manufacturing at the facility could consequently be suspended. We may not be able to contract suitable alternative or back-up manufacturing facilities on terms acceptable to us or at all.

The FDA or other regulatory agencies may also require the submission of any lot of a particular product for inspection. If the lot product fails to meet the FDA requirements, then the FDA could take any of the following actions: (i) restrict the release of the product; (ii) suspend manufacturing of the specific lot of the product; (iii) order a recall of the lot of the product; or (iv) order a seizure of the lot of the product.

We are subject to regulation by governments in many jurisdictions. If we do not comply with healthcare, drug, manufacturing and environmental regulations, among others, in such jurisdiction, our existing and future operations may be curtailed, and we could be subject to liability.

In addition to the regulatory approval process, we may be subject to regulations under local, provincial, state, federal and foreign law, including, but not limited to, requirements regarding occupational health, safety, laboratory practices, healthcare fraud and abuse, environmental protection and hazardous substance control, and may be subject to other present and future local, provincial, state, federal and foreign regulations.

Our products may fail or cause harm, subjecting us to product liability claims, which are uninsured.

Use of our product during current clinical trials may entail risk of product liability. We maintain clinical trial liability insurance; however, it is possible this coverage may not provide full protection against all risks.  Given the scope and complexity of the clinical development process, the uncertainty of product liability litigation, and the shrinking capacity of insurance underwriters, it is not possible at this time to assess the adequacy of current clinical trial coverage, nor the ability to secure continuing coverage at the same level and at reasonable cost in the foreseeable future.  While we carry, and intend to continue carrying amounts believed to be appropriate under the circumstances, it is not possible at this time to determine the adequacy of such coverage.

In addition, the sale and commercial use of our product entails risk of product liability. We currently do not carry any product liability insurance for this purpose. There can be no assurance that we will be able to obtain appropriate levels of product liability insurance prior to any sale of our pharmaceutical products. An inability to obtain insurance on economically feasible terms or to otherwise protect against potential product liability claims could inhibit or prevent the commercialization of products developed by us. The obligation to pay any product liability claim or a recall of a product could have a material adverse effect on our business, financial condition and future prospects.



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Our technologies may become obsolete.
The pharmaceutical industry is characterized by rapidly changing markets, technology, emerging industry standards and frequent introduction of new products. The introduction of new products embodying new technologies, including new manufacturing processes and the emergence of new industry standards may render our products obsolete, less competitive or less marketable. The process of developing our products is extremely complex and requires significant continuing development efforts and third-party commitments. Our failure to develop new technologies and products and the obsolescence of existing technologies could adversely affect our business.
We may be unable to anticipate changes in our potential customer requirements that could make our existing technology obsolete. Our success will depend, in part, on our ability to continue to enhance our existing technologies, develop new technology that addresses the increasing sophistication and varied needs of the market, and respond to technological advances and emerging industry standards and practices on a timely and cost-effective basis. The development of our proprietary technology entails significant technical and business risks. We may not be successful in using our new technologies or exploiting our niche markets effectively or adapting our businesses to evolving customer or medical requirements or preferences or emerging industry standards.

Our license, development, supply and distribution agreement with Adlai Nortye Biopharma Co. is subject to certain risks and uncertainties related to our dependence on Adlai and doing business in foreign jurisdictions.
On November 16, 2017, we announced that we had entered into a Licensing Agreement with Adlai. Under the terms of the Licensing Agreement, Adlai will have exclusive development and commercialization rights to pelareorep in China, Hong Kong, Macau, Singapore, South Korea and Taiwan (the “Territories”). Pursuant to the Licensing Agreement, along with payments to be received by us upon meeting certain requirements and milestones, we are also eligible to receive royalty payments in excess of 10% associated with the commercialization of pelareorep for all indications, subject to regulatory approval. Under the terms of the Licensing Agreement, Adlai will be responsible for all clinical, regulatory and commercialization activities respecting pelareorep in the Territories and therefore the Company will be dependent upon Adlai in successfully undertaking those actions in a timely and economic manner and in compliance with all applicable legal and regulatory requirements within the Territories. If Adlai is unable to fulfill its obligations under the terms of the Licensing Agreement and in compliance with all applicable legal and regulatory requirements, including clinical, regulatory and commercialization of pelareorep, our prospective revenue from royalty payments related to the commercialization of pelareorep in the Territories may be materially diminished, delayed or never realized, which could negatively affect our operating results and financial condition.

Further, conducting business with Adlai within the Territories, and specifically China, subjects us to certain economic, political, currency and legal risks and uncertainties regarding, among other things, the development and commercialization of pelareorep and the release and receipt of payments under the terms of the Licensing Agreement, including the payment of royalties upon commercialization of pelareorep. These risks include:

different regulatory requirements for drug approvals in foreign countries;
different standards of care in various countries that could complicate the evaluation of our product candidates;
different U.S. and foreign drug import and export rules;
reduced protection for intellectual property rights in certain countries;
unexpected changes in tariffs, trade barriers and regulatory requirements;
different reimbursement systems and different competitive drugs indicated to treat the indications for which our product candidates are being developed;
economic weakness, including inflation, or political instability in particular foreign economies and markets;
compliance with the FCPA, and other anti-corruption and anti-bribery laws;
U.S. and foreign taxes;
foreign currency fluctuations, which could result in reduced revenues, and other obligations incident to doing business in another country;
a reliance on CROs, clinical trial sites, principal investigators and other third parties that may be less experienced with clinical trials or have different methods of performing such clinical trials than we are used to in the U.S.;
potential liability resulting from development work conducted by foreign distributors; and
business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters.

The governments of the Territories, and specifically the Chinese government, exercise significant control over all aspects of their respective economies. Accordingly, any adverse change in the economy, the legal system or governmental, economic or other policies could have a material adverse effect on the business prospects of the Licensing Agreement with Adlai, including our ability to receive money out of China under the terms of the Licensing Agreement. Any disruption in relations, inability to work efficiently or disadvantageous treatment of Adlai by the governments of the Territories or other authorities could have a
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material adverse effect on our business prospects under the Licensing Agreement. Additionally, the regulatory environment in the Territories is evolving, and officials in the governments in the Territories exercise broad discretion in deciding how to interpret and apply regulations. There can be no assurance that Adlai will be successful in the development and commercialization of pelareorep in the Territories.

We have no operating revenues and a history of losses. We have no products approved for commercial sale, and we may never achieve or sustain profitability.

We are a clinical-stage biopharmaceutical company. We have incurred significant losses since our inception. To date, we have not generated sufficient revenues to offset our research and development costs and accordingly have not generated positive cash flow or made an operating profit. As of December 31, 2020, we had an accumulated deficit of $367.1 million and we incurred net losses of $22.5 million, $33.1 million and $17.0 million for the years ended December 31, 2020, 2019, and 2018, respectively. We anticipate that we will continue to incur significant losses during 2021 and in the foreseeable future. The amount of future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue. Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability. We do not expect to reach profitability at least until after the successful and profitable commercialization of one or more of our products. Even if one or more of our products are profitably commercialized, the initial losses incurred by us may never be recovered.
We may need additional financing in the future to fund the research and development of our products and to meet our ongoing capital requirements.

We anticipate that we will need additional financing in the future to fund research and development and to meet our ongoing capital requirements. The amount of future capital requirements will depend on many factors, including continued scientific progress in our drug discovery and development programs, progress in our pre-clinical and clinical evaluation of drug candidates, time and expense associated with filing, prosecuting and enforcing our patent claims and costs associated with obtaining regulatory approvals. In order to meet such capital requirements, we will consider contract fees, collaborative research and development arrangements, and additional public or private financings (including the incurrence of debt and the issuance of additional equity securities) to fund all or a part of particular programs as well as potential partnering or licensing opportunities.
Oncolytics, from time to time, along with all other pharmaceutical research and development entities, may have restricted access to capital, bank debt and equity, and, from time to time, may face increased borrowing costs. Although our business and asset base have not changed, the lending capacity of all financial institutions fluctuates causing a corresponding change in risk premiums. As future operations will be financed out of funds generated from financing activities, our ability to do so is dependent on, among other factors, the overall state of capital markets and investor appetite for investments in the pharmaceutical industry and our securities in particular.

Should we elect to satisfy our cash commitments through the issuance of securities, by way of either private placement or public offering or otherwise, there can be no assurance that our efforts to raise such funding will be successful, or achieved on terms favorable to us or our existing shareholders. If adequate funds are not available on terms favorable to us, we may have to reduce substantially or eliminate expenditures for research and development, testing, production and marketing of our proposed product, or obtain funds through arrangements with corporate partners that require us to relinquish rights to certain of our technologies or product. There can be no assurance that we will be able to raise additional capital if our current capital resources are exhausted.

The cost of director and officer liability insurance may continue to increase substantially or may not be available to us and may affect our ability to retain quality directors and officers.
We carry liability insurance on behalf of our directors and officers. Given a number of large director and officer liability insurance claims in the U.S. equity markets, director and officer liability insurance has become increasingly more expensive with increased restrictions. Consequently, there is no assurance that we will continue to be offered this insurance or be able to obtain adequate coverage. The inability to acquire the appropriate insurance coverage may limit our ability to attract and maintain directors and officers as required to conduct our business.





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We incur some of our expenses in foreign currencies and therefore are exposed to foreign currency exchange rate fluctuations.

We incur some of our manufacturing, clinical, collaborative and consulting expenses in foreign currencies, primarily the U.S. dollar, the Euro and the British pound.  We are therefore exposed to foreign currency rate fluctuations. Also, as we expand to other foreign jurisdictions there may be an increase in our foreign exchange exposure.



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Ernst & Young LLP
2200, 215 2nd St SW
Calgary, AB T2P 1M4
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EXHIBIT 15.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the use of our reports dated March 4, 2021 with respect to the consolidated financial statements of Oncolytics Biotech Inc. (“Oncolytics”) as at December 31, 2020 and 2019 and for each of the years in the three year period ended December 31, 2020 included as an exhibit to or incorporated by reference in the Annual Report (Form 20-F) for 2020.

We also consent to the incorporation by reference in the Registration Statement on Form F-10 (Nos. 333-239025) and Registration Statements on Form S-8 (Nos. 333-171625 and 333-205708) of our report dated March 4, 2021 with respect to the consolidated financial statements of Oncolytics as at December 31, 2020 and 2019 and for each of the years in the three year period ended December 31, 2020 included in the Annual Report on Form 20-F of Oncolytics for the year ended December 31, 2020, as filed with the SEC.




Calgary, Alberta/s/Ernst & Young LLP
March 5, 2021Chartered Professional Accountants

    

A member firm of Ernst & Young Global Limited



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