# EDGAR Filing Document

**Accession Number:** 0001129928
**File Stem:** 0001129928-23-000008
**Filing Date:** 2023-3
**Character Count:** 527693
**Document Hash:** 411e8b4528496107945d18e732e90013
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001129928-23-000008.hdr.sgml**: 20230303

**ACCESSION NUMBER**: 0001129928-23-000008

**CONFORMED SUBMISSION TYPE**: 20-F

**PUBLIC DOCUMENT COUNT**: 105

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230303

**DATE AS OF CHANGE**: 20230303

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** ONCOLYTICS BIOTECH INC
- **CENTRAL INDEX KEY:** 0001129928
- **STANDARD INDUSTRIAL CLASSIFICATION:** PHARMACEUTICAL PREPARATIONS [2834]
- **IRS NUMBER:** 000000000
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 20-F
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38512
- **FILM NUMBER:** 23702324

**BUSINESS ADDRESS:**
- **STREET 1:** 804, 322 - 11 AVENUE SW
- **CITY:** CALGARY
- **STATE:** A0
- **ZIP:** T2R 0C5
- **BUSINESS PHONE:** 4036707380

**MAIL ADDRESS:**
- **STREET 1:** 804, 322 - 11 AVENUE SW
- **CITY:** CALGARY
- **STATE:** A0
- **ZIP:** T2R 0C5

?xml version="1.0" ? oncyf-20221231

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 20-F**

---

| | |
|:---|:---|
| □ | **REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934** |
| <br>**OR** | <br>**OR** |
| ⌧ | **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
| **For fiscal year ended** | **For fiscal year ended** |
| **December 31, 2022** | **December 31, 2022** |
| **OR** | **OR** |
| □ | **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
| **<br>For the transition period from ____ to ____** | **<br>For the transition period from ____ to ____** |
| <br>**OR** | <br>**OR** |
| □ | **SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
| **<br>Date of event requiring this shell company report:** | **<br>Date of event requiring this shell company report:** |

---

**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**Commission file number: 001-38512**

**ONCOLYTICS BIOTECH INC.**

(Exact name of Registrant as specified in its charter)

**Province of Alberta, Canada**

(Jurisdiction of incorporation or organization)

**804, 322 11th Avenue SW, Calgary, Alberta, Canada T2R 0C5**

(Address of principal executive offices)

**Kirk Look**

**804, 322 11th Avenue SW, Calgary, Alberta, Canada T2R 0C5**

**Tel: (403) 670-7377**

**E-mail: info@oncolytics.ca**

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

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

Title of each class Trading Symbol Name of each exchange on which registered <br> <u>Common Shares, no par value</u> <u>ONCY</u> <u>The Nasdaq Stock Market LLC</u>

Securities registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the Registrant's classes of capital or common stock as of the close of the period covered by the annual report: 61,327,914 common shares as at December 31, 2022

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes □ No 🗷

If this report is an annual or transition report, indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes □ No 🗷

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes 🗷No □

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes 🗷No □

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "large accelerated filer," "accelerated filer," and "emerging growth company in Rule 12b-2 of the Exchange Act.

Large accelerated filer □&nbsp;&nbsp;&nbsp;&nbsp; Accelerated filer □ Non-accelerated filer ⌧ <br> Emerging growth company □

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. □

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the

registrant included in the filing reflect the correction of an error to previously issued financial statements. □

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). □

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP International Financial Reporting Standards as issued by the International Accounting Standards Board Other <br> □ ⌧ □

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:

Item 17 □&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 18 □

If this is an annual report, indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes □ No 🗷

------

**ONCOLYTICS BIOTECH INC.**

**FORM 20-F**

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| <u>[Item 1. &nbsp;&nbsp;&nbsp;&nbsp; Identity of Directors, Senior Management and Advisers](#if2c66687cf8546c4b7655f45d9eacdf7_16)</u> | <u>[6](#if2c66687cf8546c4b7655f45d9eacdf7_16)</u> |
| <u>[Item 2. Offer Statistics and Expected Timetable](#if2c66687cf8546c4b7655f45d9eacdf7_19)</u> | <u>[6](#if2c66687cf8546c4b7655f45d9eacdf7_19)</u> |
| <u>[Item 3. Key Information](#if2c66687cf8546c4b7655f45d9eacdf7_22)</u> | <u>[6](#if2c66687cf8546c4b7655f45d9eacdf7_22)</u> |
| <u>[Item 4.&nbsp;&nbsp;&nbsp;&nbsp; Information on the Company](#if2c66687cf8546c4b7655f45d9eacdf7_25)</u> | <u>[26](#if2c66687cf8546c4b7655f45d9eacdf7_25)</u> |
| <u>[Item 4A. Unresolved Staff Comments](#if2c66687cf8546c4b7655f45d9eacdf7_28)</u> | <u>[36](#if2c66687cf8546c4b7655f45d9eacdf7_28)</u> |
| <u>[Item 5. Operating and Financial Review and Prospects](#if2c66687cf8546c4b7655f45d9eacdf7_31)</u> | <u>[36](#if2c66687cf8546c4b7655f45d9eacdf7_31)</u> |
| <u>[Item 6. Directors, Senior Management and Employees](#if2c66687cf8546c4b7655f45d9eacdf7_34)</u> | <u>[37](#if2c66687cf8546c4b7655f45d9eacdf7_34)</u> |
| <u>[Item 7. Major Shareholders and Related Party Transactions](#if2c66687cf8546c4b7655f45d9eacdf7_37)</u> | <u>[51](#if2c66687cf8546c4b7655f45d9eacdf7_37)</u> |
| <u>[Item 8. Financial Information](#if2c66687cf8546c4b7655f45d9eacdf7_40)</u> | <u>[52](#if2c66687cf8546c4b7655f45d9eacdf7_40)</u> |
| <u>[Item 9.&nbsp;&nbsp;&nbsp;&nbsp; The Offer and Listing](#if2c66687cf8546c4b7655f45d9eacdf7_43)</u> | <u>[52](#if2c66687cf8546c4b7655f45d9eacdf7_43)</u> |
| <u>[Item 10. Additional Information](#if2c66687cf8546c4b7655f45d9eacdf7_46)</u> | <u>[53](#if2c66687cf8546c4b7655f45d9eacdf7_46)</u> |
| <u>[Item 11. Quantitative and Qualitative Disclosures About Market Risk](#if2c66687cf8546c4b7655f45d9eacdf7_49)</u> | <u>[64](#if2c66687cf8546c4b7655f45d9eacdf7_49)</u> |
| <u>[Item 12. Description of Securities Other Than Equity Securities](#if2c66687cf8546c4b7655f45d9eacdf7_52)</u> | <u>[64](#if2c66687cf8546c4b7655f45d9eacdf7_52)</u> |
| <u>[Item 13. Defaults, Dividend Arrearages and Delinquencies](#if2c66687cf8546c4b7655f45d9eacdf7_58)</u> | <u>[64](#if2c66687cf8546c4b7655f45d9eacdf7_58)</u> |
| <u>[Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds](#if2c66687cf8546c4b7655f45d9eacdf7_61)</u> | <u>[64](#if2c66687cf8546c4b7655f45d9eacdf7_61)</u> |
| <u>[Item 15.&nbsp;&nbsp;&nbsp;&nbsp; Controls and Procedures](#if2c66687cf8546c4b7655f45d9eacdf7_64)</u> | <u>[64](#if2c66687cf8546c4b7655f45d9eacdf7_64)</u> |
| <u>[Item 16. \[Reserved\]](#if2c66687cf8546c4b7655f45d9eacdf7_67)</u> | <u>[65](#if2c66687cf8546c4b7655f45d9eacdf7_67)</u> |
| <u>[Item 16A. Audit Committee Financial Expert](#if2c66687cf8546c4b7655f45d9eacdf7_70)</u> | <u>[65](#if2c66687cf8546c4b7655f45d9eacdf7_70)</u> |
| <u>[Item 16B. Code of Ethics](#if2c66687cf8546c4b7655f45d9eacdf7_73)</u> | <u>[65](#if2c66687cf8546c4b7655f45d9eacdf7_73)</u> |
| <u>[Item 16C. Principal Accountant Fees and Services](#if2c66687cf8546c4b7655f45d9eacdf7_76)</u> | <u>[66](#if2c66687cf8546c4b7655f45d9eacdf7_76)</u> |
| <u>[Item 16D. Exemptions from the Listing Standards for Audit Committees](#if2c66687cf8546c4b7655f45d9eacdf7_79)</u> | <u>[66](#if2c66687cf8546c4b7655f45d9eacdf7_79)</u> |
| <u>[Item 16E. Purchase of Equity Securities by the Issuer and Affiliated Purchases](#if2c66687cf8546c4b7655f45d9eacdf7_82)</u> | <u>[66](#if2c66687cf8546c4b7655f45d9eacdf7_82)</u> |
| <u>[Item 16F. Change in Registrant's Certifying Accountants](#if2c66687cf8546c4b7655f45d9eacdf7_85)</u> | <u>[66](#if2c66687cf8546c4b7655f45d9eacdf7_85)</u> |
| <u>[Item 16G. Corporate Governance](#if2c66687cf8546c4b7655f45d9eacdf7_88)</u> | <u>[66](#if2c66687cf8546c4b7655f45d9eacdf7_88)</u> |
| <u>[Item 16H. Mine Safety Disclosure](#if2c66687cf8546c4b7655f45d9eacdf7_91)</u> | <u>[67](#if2c66687cf8546c4b7655f45d9eacdf7_91)</u> |
| <u>[Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#if2c66687cf8546c4b7655f45d9eacdf7_94)</u> | <u>[67](#if2c66687cf8546c4b7655f45d9eacdf7_94)</u> |
| <u>[Item 17.&nbsp;&nbsp;&nbsp;&nbsp; Financial Statements](#if2c66687cf8546c4b7655f45d9eacdf7_100)</u> | <u>[67](#if2c66687cf8546c4b7655f45d9eacdf7_100)</u> |
| <u>[Item 18&nbsp;&nbsp;&nbsp;&nbsp; Financial Statements](#if2c66687cf8546c4b7655f45d9eacdf7_103)</u> | <u>[67](#if2c66687cf8546c4b7655f45d9eacdf7_103)</u> |
| <u>[Item 19.&nbsp;&nbsp;&nbsp;&nbsp; Exhibits](#if2c66687cf8546c4b7655f45d9eacdf7_106)</u> | <u>[68](#if2c66687cf8546c4b7655f45d9eacdf7_106)</u> |
| <u>[Signatures](#if2c66687cf8546c4b7655f45d9eacdf7_109)</u> | <u>[69](#if2c66687cf8546c4b7655f45d9eacdf7_109)</u> |
| <u>[Financial Statements](#if2c66687cf8546c4b7655f45d9eacdf7_112)</u> | <u>[F1 - F24](#if2c66687cf8546c4b7655f45d9eacdf7_112)</u> |

---

------

**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS** 

All references in this annual report on Form 20-F to the terms "we," "our," "us," "the Company," and "Oncolytics" refer to Oncolytics Biotech Inc. Unless otherwise indicated, all references to "$" and "dollars" in this annual report mean Canadian dollars.

Certain statements in this annual report on Form 20-F and the documents attached as exhibits to this annual report, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Oncolytics Biotech Inc., or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are statements that are not historical facts, and include, but are not limited to, estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to the efficacy of our technologies; the timing and results of clinical studies related to our technologies; future operations, products and services; the impact of regulatory initiatives on our operations; the size of and opportunities related to the markets for our technologies; general industry and macroeconomic growth rates; expectations related to possible joint and/or strategic ventures and statements regarding future performance. Forward-looking statements generally, but not always, are identified by the words "expects," "anticipates," "believes," "intends," "estimates," "projects", "potential", "possible" and similar expressions, or that events or conditions "will," "may," "could" or "should" occur.

The forward-looking statements in this annual report on Form 20-F are subject to various risks and uncertainties, most of which are difficult to predict and generally beyond our control. Some of the important risks and uncertainties that could affect forward-looking statements are described further under the section heading "Item 3. Key Information – D. Risk Factors" below. If one or more of these risks or uncertainties materializes, or if underlying assumptions prove incorrect, our actual results may vary materially from those expected, estimated or projected. Forward-looking statements in this document are not a prediction of future events or circumstances, and those future events or circumstances may not occur. Given these uncertainties, users of the information included herein, including investors and prospective investors are cautioned not to place undue reliance on such forward-looking statements. Investors should consult our quarterly and annual filings with the securities commissions or similar regulatory authorities in Canada and the SEC for additional information on risks and uncertainties relating to forward-looking statements. We do not assume responsibility for the accuracy and completeness of these statements.

Forward-looking statements are based on our beliefs, opinions and expectations at the time they are made, and we do not assume any obligation to update our forward-looking statements if those beliefs, opinions, or expectations, or other circumstances, should change, except as required by applicable law.

**SUMMARY OF RISK FACTORS** 

Investing in our common shares involves a high degree of risk. You should carefully consider the risks summarized below and other risks that we face, a detailed discussion of which can be found under "Item 3. Key Information – D. Risk Factors" below, together with other information in this annual report on Form 20-F and our other filings with the SEC. This summary list of risks is not exhaustive of the factors that may affect any of the Company's forward-looking statements and our business and financial results. If any of these risks actually occur, our business, financial condition, and financial performance would likely be materially adversely affected. In such case, the trading price of our common shares would likely decline and you may lose part or all of your investment. Below is a summary of some of the principal risks we face:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any failure or delay in clinical trials for our products, including pelareorep, may cause us to incur additional costs or delay or prevent the commercialization of our products and could severely harm our business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our candidate product, pelareorep, is being and will continue to be used in combination with third-party drugs. Those currently being partnered with pelareorep are approved; however, we have limited or no control over the supply of these drugs. If our relationships with current or future collaborators or suppliers are not successful, we may be delayed in completing the development of our product candidates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our business, including our research and development operations, has been and may continue to be adversely affected by the COVID-19 pandemic and conflict in Ukraine;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our product candidate may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following any potential marketing approval;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may expend our limited resources to pursue a particular indication and fail to capitalize on indications that may be more profitable or for which there is a greater likelihood of success;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may need additional financing in the future to fund the research and development of our products and to meet our ongoing capital requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pharmaceutical products are subject to intense regulatory approval processes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our operations and products may be subject to other government manufacturing and testing regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We have conducted, and may in the future conduct, clinical trials for pelareorep in sites outside the United States and the FDA may not accept data from trials conducted in such locations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We rely on patents and proprietary rights to protect our technology;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Third parties may choose to file patent infringement claims against us; defending ourselves from such allegations would be costly, time-consuming, distracting to management and could materially affect our business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and products could be adversely affected;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Developments in patent law could have a negative impact on our business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we do not obtain protection under the Hatch-Waxman amendments and similar foreign legislation for extending the term of patents covering each of our product candidates, our business may be materially harmed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Intellectual property rights do not necessarily address all potential threats to our business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our products may fail or cause harm, subjecting us to product liability claims;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• New products may not be accepted by the medical community or consumers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Interim "top-line" and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our technologies may become obsolete;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We rely on third-party manufacturers to produce our clinical products and on other third parties to store, monitor and transport bulk drug substance, and drug product. We and our third-party partners may encounter difficulties with respect to these activities that could delay or impair our ability to initiate or complete our clinical trials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We rely on third parties to produce and provide suitable raw materials for pelareorep production, packaging, and testing as well as clinical trial-related testing. We and our third-party partners may encounter difficulties with sourcing these materials that could delay or impair our ability to manufacture pelareorep or complete product or clinical sample testing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We rely on third parties to monitor, support, conduct, and oversee clinical trials of the products that we are developing and, in some cases, to maintain regulatory files for those product candidates. We may not be able to obtain regulatory approval for our products that may result from our development efforts if we are not able to maintain or secure agreements with such third parties on acceptable terms, if these third parties do not perform their services as required, or if these third parties fail to timely transfer any regulatory information held by them to us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our employees, independent contractors, principal investigators, contract research organizations, consultants, and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our operations could be adversely affected by events outside of our control, such as natural disasters, wars, or health epidemics;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The cost of director and officer liability insurance may increase substantially and may affect our ability to retain quality directors and officers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We are dependent on our key employees and collaborators;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company is likely a "passive foreign investment company" which may have adverse U.S. federal income tax consequences for U.S. shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As a non-accelerated filer, we are not required to comply with auditor attestation requirements of the Sarbanes-Oxley Act;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Potential dilution of present and prospective shareholdings; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our operations may be adversely affected by disruptions to our information technology ("IT") systems, including disruptions from cybersecurity breaches of our IT infrastructure.

------

**PART I**

**ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS**

Not Applicable.

**ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE**

Not Applicable.

**ITEM 3. KEY INFORMATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.[RESERVED]** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.Capitalization and Indebtedness**

Not Applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.Reasons for the Offer and Use of Proceeds**

Not Applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.Risk Factors**

Investment in our common shares ("Common Shares") involves a high degree of risk. You should carefully consider, among other matters, the following risk factors in addition to the other information in this annual report on Form 20-F when evaluating our business because these risk factors may have a significant impact on our business, financial condition, operating results or cash flow. If any of the material risks described below or in subsequent reports we file with the SEC actually occur, they may materially harm our business, financial condition, operating results, or cash flow. Additional risks and uncertainties that we have not yet identified or that we presently consider to be immaterial may also materially harm our business, financial condition, operating results, or cash flow.

**Research and Development Risks**

***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.

------

***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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the discovery of unexpected toxicities or lack of sufficient efficacy of products which make them unattractive or unsuitable for human use;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• preliminary results as seen in animal and/or limited human testing may not be substantiated in larger, controlled clinical trials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• manufacturing costs or other production factors may make manufacturing of products ineffective, impractical, and non-competitive;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• proprietary rights of third parties or competing products or technologies may preclude commercialization;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• requisite regulatory approvals for the commercial distribution of products may not be obtained; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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.

***Any failure or delay in clinical trials for our products, including pelareorep, may cause us to incur additional costs or delay or prevent the commercialization of our products and could severely harm our business.***

We must conduct extensive clinical trials to demonstrate the safety and efficacy of our products in humans. Clinical testing, in particular, is expensive, difficult to design and implement, can take many years to complete, and is uncertain as to the outcome. A failure of one or more of our clinical trials can occur at any stage of testing. We may experience numerous unforeseen events during, or as a result of, the clinical trial process, which could delay or prevent us from receiving marketing approval or commercializing our product candidates, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our clinical trials may produce negative or inconclusive results, and we may decide, or regulatory authorities may require us, to conduct additional clinical trials, or we may abandon projects that we expect to be promising;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The number of subjects required for our clinical trials may be larger than we anticipate, enrollment in our clinical trials may be slower than we anticipate, or participants may drop out of our clinical trials at a higher rate than we anticipate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We might have to suspend or terminate our clinical trials if the participants are being exposed to unacceptable health risks;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Regulators or institutional review boards may require that we hold, suspend, or terminate clinical research for various reasons, including noncompliance with regulatory requirements or our clinical protocols;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Regulators may refuse to accept or consider data from clinical trials for various reasons, including noncompliance with regulatory requirements or our clinical protocols;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may be subject to governmental or regulatory delays and changes in regulatory requirements, policy, and guidelines, including guidelines specifically addressing requirements for the development of treatments for our product candidates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We might have difficulty adding new clinical trial sites on a timely basis, or at all;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The cost of our clinical trials may be greater than we anticipate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The supply, storage, distribution, or quality of our products or other materials necessary to conduct our clinical trials may be insufficient or inadequate

Additionally, subject enrollment, which is a significant factor in the timing of clinical trials, is affected by a variety of factors, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The size and nature of the subject population;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The proximity of subjects to clinical sites;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The eligibility criteria for the trial;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The design of the clinical trial;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Competing clinical trials; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Clinicians' and subjects' perceptions as to the potential advantages of the medication being studied in relation to other available therapies, including any new medications that may be approved for the indications we are investigating.

Furthermore, we plan to rely on clinical trial sites to ensure the proper and timely conduct of our clinical trials, and while we have agreements governing their committed activities, we have limited influence over their actual performance. Any delays, concerns over the quality of the clinical data, or unanticipated problems during clinical testing, such as enrollment in our clinical trials being slower than we anticipate or participants dropping out of our clinical trials at a higher rate than we anticipate, could increase our costs, slow down our product development and approval process, and jeopardize our ability to commence product sales and generate revenues.

In addition, the federal Right to Try Act, among other things, provides a federal framework for patients to access certain investigational new drug products that have completed a Phase 1 clinical trial. Under certain circumstances, eligible patients can seek treatment without enrolling in clinical trials and without obtaining FDA approval under the FDA expanded access program. While there is no obligation to make product candidates available to eligible patients as a result of the Right to Try Act, new and emerging legislation regarding expanded access to unapproved drugs could negatively impact enrollment in our clinical trials and our business in the future.

***Our candidate product, pelareorep, is being and will continue to be used in combination with third-party drugs. Those currently being partnered with pelareorep are approved; however, we have limited or no control over the supply of these drugs. If our relationships with current or future collaborators or suppliers are not successful, we may be delayed in completing the development of our product candidates.***

In several of our current and planned studies, pelareorep is being or will be administered in combination with immune checkpoint inhibitors ("ICIs"), a class of drugs intended to stop tumor cells from interfering with the ability of the patient's immune system to attack their tumor. We have entered into agreements with Pfizer and Roche to supply their ICIs, avelumab and atezolizumab, respectively, for use in our ongoing Oncolytics-sponsored studies. Specifically, avelumab is being used in our ongoing Phase 2 study in breast cancer (BRACELET study), and atezolizumab was used in our window-of-opportunity study in breast cancer (AWARE study) and is being used in our ongoing Phase 1/2 study in gastrointestinal cancer (GOBLET study). In addition, other ICIs that are being used or have been used in combination with pelareorep in investigator-sponsored studies include retifanlimab (Incyte) in a Phase 2 study in breast cancer (IRENE study) and nivolumab (BMS) in a Phase 1 study in myeloma. Additionally, we may enter into future agreements for the supply of ICIs for use in connection with the development of pelareorep.

Our ability to develop pelareorep for use in combination with ICIs depends on our ability to access ICIs for use in our clinical trials on commercially reasonable terms. We cannot be certain that current or potential future commercial relationships will provide us with a steady supply of such drugs on commercially reasonable terms or at all. Any failure to maintain or enter into new successful commercial relationships or the expense of purchasing checkpoint blockade therapies in the market may delay our development timelines, increase our costs, and jeopardize our ability to develop pelareorep as a commercially viable therapy. If any of these occur, our business, financial condition, results of operations, stock price, and prospects may be materially harmed.

If any current or any future collaborator or supplier cannot continue to supply their products on commercially reasonable terms, we would need to identify alternatives for accessing appropriate ICIs. Additionally, should the supply of products from any current or future collaborator or supplier be interrupted, delayed, or otherwise be unavailable to us, our clinical trials may be delayed. In the event we are unable to source a supply of an alternative appropriate ICI or are unable to do so on commercially reasonable terms, our business, financial condition, results of operations, stock price, and prospects may be materially harmed.

Moreover, the development of pelareorep for use in combination with ICIs may present challenges that are not faced for single agent product candidates. Developments related to the other product may impact our clinical trials as well as our commercial prospects should we receive marketing approval. Such developments may include changes to the other product's safety or efficacy profile, changes to the availability of the approved product, and changes to the standard of care.

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***The incidence and prevalence for target patient populations of our product candidates are based on estimates and third-party sources. If the market opportunities for our product candidates are smaller than we estimate or if any approval that we obtain is based on a narrower definition of the patient population, our business, financial condition, results of operations, and prospects may be materially adversely affected.***

Periodically, we make estimates regarding the incidence and prevalence of target patient populations for particular diseases based on various third-party sources and internally generated analysis and use such estimates in making decisions regarding our product development strategy, including determining indications on which to focus in preclinical or clinical trials.

These estimates may be inaccurate or based on imprecise data. For example, the total addressable market opportunity will depend on, among other things, the acceptance of such data by the medical community and patient access, product pricing and reimbursement, any limitations on populations and indications in approved product labeling, as well as the approval of new or competing medicines. The number of patients in the addressable markets may turn out to be lower than expected, patients may not be otherwise amenable to treatment with our products, or new patients may become increasingly difficult to identify or gain access to, all of which could materially adversely affect our business, financial condition, results of operations and prospects.

***Our business, including our research and development operations, has been and may continue to be adversely affected by a variety of external factors outside our control, including the COVID-19 pandemic and conflict in Ukraine.***

During 2022, a variety of external factors, including the ongoing coronavirus infectious disease 2019 (COVID-19) pandemic and the global political conflict in Ukraine, have touched elements of our business operations. COVID-19, including its variants, has created challenges affecting our clinical trial activities, including delayed patient enrollment related to our BRACELET-1 study and contributed to the disruption of our manufacturing supply chain, while the conflict in Ukraine has increased market volatility and uncertainty. Some challenges included, among other things, patients choosing to delay treatments, clinical sites suspending study activity temporarily, vendor and collaborator staff shortages, and raw material and components delays. While these challenges have largely impacted the timing of certain activities, we believe the impact on our overall business to date has not been significant. As well, we believe our financial condition, liquidity, and longer-term strategic development remain on track. However, these events have caused and may continue to cause significant fluctuations in stock markets, global economic activity, including inflation and rising interest rates, and healthcare systems. The scale and duration of these developments remain uncertain and could affect our ability to finance and execute our operations.

If any of these external factors 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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• disruption to and delays in preclinical research or product manufacturing or testing activities due to an extended closure or reduced capacity of lab facilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• further delays or difficulties in enrolling patients in our ongoing and planned clinical trials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• patients discontinuing their treatment or follow-up visits;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• further delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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, product manufacturing or testing, and initiate or complete our clinical trials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• delays in receiving approvals from regulatory authorities to initiate our planned clinical trials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• disruptions to the global financial markets and increased market volatility may continue to negatively affect our ability to secure and drastically increase the costs of products and supplies, and reduce our ability to access capital, which could in the future negatively affect our liquidity and the value of common shares.

The extent to which these events might prolong and/or cause significant disruptions to our business and materially impact our results of operations, including our ongoing and planned clinical studies and manufacturing activities, will depend on future developments. These future developments are highly uncertain, cannot be predicted, and could negatively impact our business.

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***Our product candidate may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following any potential marketing approval.***

To date, pelareorep is generally well-tolerated and has a manageable side effect profile for most patients. However, there can be no assurance that additional undesirable side effects or serious adverse events will not be caused by or associated with pelareorep as it continues through its clinical development, including when co-administered with approved products. As with many pharmaceutical and biological products, treatment with our product candidate may produce undesirable side effects or adverse reactions or events, including potential adverse side effects related to cytokine release, and may exacerbate known adverse events associated with co-administered approved products. If our product candidates or similar products or product candidate under development by third parties demonstrate unacceptable adverse events, or unacceptably exacerbate adverse events associated with co-administered approved products, we may be required to halt or delay further clinical development of our product candidate. The FDA, the EMA, or other foreign regulatory authorities could order us to cease further development of or deny approval of our product candidate for any or all targeted indications.

The product-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. In addition, these side effects may not be appropriately or timely recognized or managed by the treating medical staff, particularly outside of the institutions that collaborate with us, as toxicities resulting from our novel technologies may not be normally encountered in the general patient population and by medical personnel. We expect to have to train medical personnel using our product candidate to understand its side effect profiles, both for our planned clinical trials and upon any commercialization. Inadequate training in recognizing or managing the potential side effects of our product candidate could result in adverse effects to patients, including death.

Additionally, if our product candidate receives marketing approval, and we or others later identify undesirable side effects caused or exacerbated by such product, including during any long-term follow-up observation period recommended or required for patients who receive treatment using our product, a number of potentially significant negative consequences could result, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• regulatory authorities may withdraw approvals of such product;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• regulatory authorities may require additional warnings on the label;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we may be required to create a risk evaluation and mitigation strategy plan, which could include a medication guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare providers, and/or other elements to assure safe use;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we could be sued and held liable for harm caused to patients; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our reputations may suffer.

Any of the foregoing could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved. Furthermore, any of these occurrences may harm our business, financial condition, and prospects significantly.

***We may expend our limited resources to pursue a particular indication and fail to capitalize on indications that may be more profitable or for which there is a greater likelihood of success.***

Because we have limited financial and managerial resources, we focus on research programs and therapeutic platforms that we identify for specific indications. As a result, we may forego or delay pursuit of opportunities with other therapeutic platforms or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and therapeutic platforms for specific indications may not yield any commercially viable products.

**Financial Condition Risks**

***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, 2022, we had an accumulated deficit of $418.3 million and we incurred net losses of $24.8 million, $26.3 million, and $22.5 million for the years ended December 31, 2022, 2021, and 2020, respectively. We anticipate that we will continue to incur significant losses during 2023 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.

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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.***

As of December 31, 2022, we had cash, cash equivalents, and marketable securities of $32.1 million. 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 preclinical 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.

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

We incur some of our research and development and general and administrative expenses in foreign currencies, primarily the U.S. dollar. 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.

***Third-party credit risk***

In the normal course of our business, we have entered into contractual arrangements with third parties which subject us to the risk that such parties may default on their obligations. Oncolytics may be exposed to third-party credit risk through our contractual arrangements with our current contract manufacturer, the institutions which operate our clinical trials, or our contract research organizations and other parties. In the event such entities fail to meet their contractual obligations to Oncolytics, such failures could have a material adverse effect on Oncolytics and our operations.

***We may not be able to obtain third-party reimbursement for the cost of our product.***

Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels. A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Government authorities and these third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. Uncertainty exists regarding the reimbursement status of newly-approved pharmaceutical products and reimbursement may not be available for pelareorep. Any reimbursements granted may not be maintained or limits on reimbursements available from third-party payors may reduce the demand for, or negatively affect the price of, these products. If pelareorep does not qualify for reimbursement, if reimbursement levels diminish, or if reimbursement is denied, our sales and profitability would be adversely affected.

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**Regulatory Risks**

***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 United States Food and Drug Administration ("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 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 current Good Manufacturing Practices (**"**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.

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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.

***We have conducted, and may in the future conduct, clinical trials for pelareorep in sites outside the United States and the FDA may not accept data from trials conducted in such locations.***

We have conducted, and may in the future choose to conduct, clinical trials outside the United States. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of this data is subject to certain conditions imposed by the FDA. For example, the clinical trial must be well designed and conducted and performed by qualified investigators in accordance with ethical principles. The trial population must adequately represent the U.S. population, and the data must be applicable to the U.S. population and U.S. medical practice in ways that the FDA deem clinically meaningful. Generally, the patient population for any clinical trials conducted outside of the United States must be representative of the population for whom we intend to label the product in the United States. In addition, while these clinical trials are subject to the applicable local laws, FDA acceptance of the data will depend on its determination that the trials also complied with all applicable U.S. laws and regulations. There can be no assurance the FDA will accept data from trials conducted outside the United States. If the FDA does not accept the data from any clinical trials we may conduct outside the United States, it would likely result in the need for additional trials, which would be costly and time-consuming and would delay or permanently halt our development of pelareorep.

**Intellectual Property Risks**

***We rely on patents and proprietary rights to protect our technology.***

Our success will depend, in part, on our ability to obtain patents, maintain trade secret protection and operate without infringing the rights of third parties. We have received Granted Patents in countries throughout the world, including the United States, Canada, Europe, and Japan. We file our Applications for Patent in the United States and under the PCT, allowing us to subsequently file in other jurisdictions. Our success will depend, in part, on our ability to obtain, enforce and maintain patent protection for our technology in Canada, the United States and other countries. We cannot be assured that patents will issue from any pending applications or that claims now or in the future, if any, allowed under issued patents will be sufficiently broad to protect our technology. In addition, no assurance can be given that any patents issued to, or licensed by us, will not be challenged, invalidated, infringed, or circumvented, or that the rights granted thereunder will provide continuing competitive advantages to us.

The patent positions of pharmaceutical and biotechnology firms, including us, are generally uncertain and involve complex legal and factual questions. In addition, it is not known whether any of our current research endeavors will result in the issuance of patents in Canada, the United States, or elsewhere, or if any patents already issued will provide significant proprietary protection or will be circumvented or invalidated. Since patent applications in the United States and Canada may be maintained in secrecy until at least 18 months after filing of the original priority application, and since publication of discoveries in the scientific or patent literature tends to lag behind actual discoveries by several months, we cannot be certain that we or any licensor were the first to create inventions claimed by pending patent applications or that we or the licensor were the first to file patent applications for such inventions. Loss of patent protection could lead to generic competition for these products, and others in the future, which would materially and adversely affect our financial prospects for these products.

Similarly, since patent applications filed before November 29, 2000 in the United States may be maintained in secrecy until the patents issue or foreign counterparts, if any, publish, we cannot be certain that we or any licensor were the first creator of inventions covered by pending patent applications or that we or such licensor were the first to file patent applications for such inventions. There is no assurance that our patents, if issued, would be held valid or enforceable by a court or that a competitor's technology or product would be found to infringe such patents.

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Accordingly, we may not be able to obtain and enforce effective patents to protect our proprietary rights from use by competitors. If other such parties obtain patents for certain information relied on by us in conducting our business, then we may be required to stop using, or pay to use, certain intellectual property, and as such, our competitive position and profitability could suffer as a result.

***Third parties may choose to file patent infringement claims against us; defending ourselves from such allegations would be costly, time-consuming, distracting to management, and could materially affect our business.***

Our development and commercialization activities, as well as any product candidates or products resulting from these activities, may infringe or be claimed to infringe patents and other intellectual property rights of third parties under which we do not hold sufficient licenses or other rights. Additionally, third parties may be successful in obtaining patent protection for technologies that cover development activities in which we are already engaged. Third parties may own or control these patents and intellectual property rights in the United States and abroad. These third parties may have substantially greater financial resources than us and could bring claims against us that could cause us to incur substantial expenses to defend against these claims and, if successful against us, could cause us to pay substantial damages. Further, if a patent infringement or other similar suit were brought against us, we could be forced to stop or delay development, manufacturing, or sales of the product or product candidate that is the subject of the suit. Intellectual property litigation in the biopharmaceutical industry is common, and we expect this trend to continue.

As a result of patent infringement or other similar claims, or to avoid potential claims, we may choose or be required to seek a license from the third party and be required to pay license fees or royalties, or both. These licenses may not be available on acceptable terms, or at all. Even if we were able to obtain a license, the rights may be non-exclusive, which could result in our competitors gaining access to the same intellectual property. Ultimately, we could be prevented from commercializing a product, or be forced to cease some aspect of our business operations, if, as a result of actual or threatened patent infringement claims, we are unable to enter into licenses on acceptable terms, if at all, or if an injunction is granted against us, which could harm our business significantly.

***If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and products could be adversely affected.***

In addition to patented technology, we rely upon unpatented proprietary technology, processes, and know-how. However, these types of trade secrets can be difficult to protect. We seek to protect this confidential information, in part, through agreements with our employees, consultants, and third parties, as well as confidentiality policies and audits, although these may not be successful in protecting our trade secrets and confidential information.

These agreements may be breached, and we may not have adequate remedies for any such breach. In addition, our trade secrets may otherwise become known, including through a potential cybersecurity breach, or may be independently developed by competitors. If we are unable to protect the confidentiality of our proprietary information and know-how, competitors may be able to use this information to develop products that compete with our products, which could adversely impact our business.

***Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.*** 

Because we rely on third parties to research and develop and to manufacture pelareorep, we must, at times, share trade secrets with them. We seek to protect our proprietary technology in part by entering into confidentiality agreements and, if applicable, consulting agreements or other similar agreements with our advisors, employees, third-party contractors, and consultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confidential information, including our trade secrets. Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increase the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor's discovery of our trade secrets or other unauthorized use or disclosure would impair our competitive position and may have a material adverse effect on our business. Moreover, enforcing a claim that a third party illegally obtained and is using any of our trade secrets is expensive and time-consuming, and the outcome is unpredictable. In addition, courts outside the United States are sometimes less willing to protect trade secrets. If we choose to go to court to stop a third party from using any of our trade secrets, we may incur substantial costs. These lawsuits may consume our time and other resources even if we are successful. These lawsuits also may impact our ability to pursue agreements with third parties in the future.

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***Developments in patent law could have a negative impact on our business.***

From time to time, authorities in the United States, the European Union, and other government authorities may change the standards of patentability, and any such changes could have a negative impact on our business.

For example, in the United States, the Leahy-Smith America Invents Act, or the America Invents Act, which was signed into law in 2011, includes a number of significant changes to U.S. patent law. These changes include a transition from a "first-to-invent" system to a "first-to-file" system, changes to the way issued patents are challenged, and changes to the way patent applications are disputed during the examination process. As a result of these changes, patent law in the United States may favor larger and more established companies that have greater resources to devote to patent application filing and prosecution. The USPTO has developed new and untested regulations and procedures to govern the full implementation of the America Invents Act, and many of the substantive changes to patent law associated with the America Invents Act, and, in particular, the first-to-file provisions became effective on March 16, 2013. Substantive changes to patent law associated with the America Invents Act may affect our ability to obtain patents, and if obtained, to enforce or defend them. Also, case law may have a substantial impact on the way patents are prosecuted, examined and litigated. This also affects the scope of protection that is available in a specific jurisdiction.

Developments of patent law in other jurisdictions may impact our business. For example, it is currently not clear what impact the planned introduction of the Unified Patent Court in the European Union will have. Patents that are valid and enforceable under the current system may be considered invalid and/or unenforceable under the new system. Also, patents may be invalidated not just in one single jurisdiction, but across multiple countries of the European Union in one single trial.

***If we do not obtain protection under the Hatch-Waxman amendments and similar foreign legislation for extending the term of patents covering each of our product candidates, our business may be materially harmed.***

Depending upon the timing, duration, and conditions of FDA marketing approval of pelareorep, one or more of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent term extension of up to five years for a patent covering an approved product as compensation for effective patent term lost during product development and the FDA regulatory review process. However, we may not receive an extension if we fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements. Moreover, the length of the extension could be less than we request. If we are unable to obtain patent term extension or the term of any such extension is less than we request, the period during which we can enforce our patent rights for pelareorep will be shortened. If this occurs, our competitors may take advantage of our investment in development and trials by referencing our clinical and preclinical data and launch their product earlier than might otherwise be the case.

***Intellectual property rights do not necessarily address all potential threats to our business.***

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations and may not adequately protect our business. The following examples are illustrative:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• others may be able to make compounds or formulations that are similar to pelareorep but that are not covered by the claims of any patents, should they issue, that we own or control;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or control;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we might not have been the first to file patent applications covering certain of our inventions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• it is possible that our pending patent applications will not lead to issued patents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• issued patents that we own or control may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights and then use the information learned from such activities to develop competitive drugs for sale in our major commercial markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we may not develop additional proprietary technologies that are patentable; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the patents of others may have an adverse effect on our business.

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Should any of these events occur, they could have a material adverse effect on our business, financial condition, results of operations, and prospects.

**Other Business Risks**

***The biotechnology industry is extremely competitive and if our competitors develop and market products that are more effective, safer, or less expensive than our products, our business could be adversely impacted.***

Technological competition in the pharmaceutical industry is intense and we expect competition to increase. Other companies are conducting research on therapeutics involving innate and adaptive immune responses as well as other novel treatments or therapeutics for the treatment of cancer which may compete with our product. Many of these competitors are more established, benefit from greater name recognition, and have substantially greater financial, manufacturing, technical, marketing, drug development, and human resources than us. In addition, many of these competitors have significantly greater experience in undertaking research, preclinical studies, and human clinical trials of new pharmaceutical products, obtaining regulatory approvals, manufacturing, and marketing such products. In addition, there are several other companies and products with which we may compete from time to time, and which may have significantly better and larger resources than we do. Accordingly, our competitors may succeed in manufacturing and/or commercializing products more rapidly or effectively, which could have a material adverse effect on our business, financial condition, or results of operations.

Smaller and other early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. In addition, the biopharmaceutical industry is characterized by rapid technological change. If we fail to stay at the forefront of technological change, we may be unable to compete effectively. Technological advances or products developed by our competitors may render our technologies or product candidates obsolete, less competitive, or not economical.

We anticipate that we will face increased competition in the future as new products enter the market and advanced technologies become available. There can be no assurance that existing products or new products developed by our competitors will not be more effective, or be more effectively manufactured, marketed, and sold, than any that may be developed or sold by us. Competitive products may render our products obsolete and uncompetitive prior to recovering research, development, or commercialization expenses incurred with respect to any such products.

***Our products may fail or cause harm, subjecting us to product liability claims.***

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.

***Future legal proceedings and the impact of any finding of liability or damages could adversely impact the company and its financial condition and results of operations.***

From time to time, we may be named as a defendant in various legal actions or other proceedings, including class action lawsuits. Certain of these actions include, and future actual or threatened legal actions may include, claims for substantial and indeterminate amounts of damages, or may result in other results adverse to us. Management does not currently know of any pending, material legal proceedings against the Company, but such legal action could be brought in the future.

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The results of possible future legal proceedings cannot be predicted with certainty. Accordingly, we cannot determine whether our insurance coverage would be sufficient to cover the costs or potential losses, if any. Regardless of merit, litigation may be both time-consuming and disruptive to our operations and cause significant expense and diversion of management attention. If we do not prevail in future legal proceedings, we may be faced with significant monetary damages or injunctive relief against us that may adversely affect our business, financial condition, and results of operations, possibly materially.

***New products may not be accepted by the medical community or consumers.***

Our primary activity to date has been research and development and we have no experience in marketing or commercializing products. We will likely partner with or rely on third parties to market our products, assuming that they receive regulatory approvals. If we partner with or rely on third parties to market our products, the commercial success of such product will be subject to a number of risks that may be outside of our control, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• competition in relation to alternative treatments, including efficacy advantages and cost advantages;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• perceived ease of use;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the availability of coverage or reimbursement by third-party payors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• uncertainties regarding marketing and distribution support; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• distribution or use restrictions imposed by regulatory authorities.

Moreover, there can be no assurance that physicians, patients, or the medical community will accept our product, even if it proves to be safe and effective and is approved for marketing by the FDA, Health Canada, and other regulatory authorities. A failure to successfully market our product would have a material adverse effect on our revenue.

***Interim "top-line" and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.***

From time to time, we may publicly disclose interim, top-line or preliminary data from our clinical trials, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial. We also make assumptions, estimations, calculations, and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the top-line or preliminary results that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Top-line or preliminary data also remain subject to audit and verification procedures that may result in the final data being materially different from the top-line or preliminary data we previously published. As a result, top-line and preliminary data should be viewed with caution until the final data are available.

From time to time, we may also disclose interim data from our preclinical studies and clinical trials. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Adverse differences between interim data and final data could significantly harm our business prospects. Further, disclosure of interim data by us or by our competitors could result in volatility in the price of our common stock.

Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions, or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and our company in general. In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure.

If the interim, top-line, or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, pelareorep may be harmed, which could harm our business, operating results, prospects or financial condition.

***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

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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.

***Changes in methods of pelareorep manufacturing or formulation may result in additional costs or delay.***

As pelareorep is developed through preclinical to late-stage clinical trials toward approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered along the way in an effort to optimize processes and results. Such changes carry the risk that they will not achieve these intended objectives or be acceptable to the FDA or similar regulatory authorities in other countries. Any of these changes could cause pelareorep to perform differently and affect the results of planned clinical trials or other future clinical trials conducted with the altered materials. This could delay the completion of clinical trials, require the conduct of bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of our product candidates and jeopardize our ability, or our strategic partners' ability, to commence product sales and generate revenue.

***We rely on third-party manufacturers to produce our clinical products and on other third parties to test, package, store, monitor, and transport bulk drug substance and drug product. We and our third-party partners may encounter difficulties with respect to these activities that could delay or impair our ability to initiate or complete our clinical trials.***

We do not currently own or operate any manufacturing facilities. We rely on a contract manufacturer to source suitable raw materials and produce sufficient quantities of pelareorep for preclinical testing and clinical trials, in compliance with applicable regulatory and quality standards. If we are unable to arrange for such third-party manufacturing sources or materials are not available in a timely manner, or fail to do so on commercially reasonable terms, we may not be able to successfully produce sufficient supply of pelareorep or we may be delayed in doing so. The manufacture of biopharmaceutical products is complex and requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. The process of manufacturing pelareorep is extremely susceptible to product loss due to contamination, equipment failure or improper installation or operation of equipment, vendor or operator error, contamination and inconsistency in yields, variability in product characteristics, and difficulties in scaling the production process. Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects, and other supply disruptions. If microbial, viral, or other contaminations are discovered in our product candidates or in the third-party manufacturing facilities in which our product candidates are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination. Any failure by our third-party manufacturers to comply with applicable regulatory and quality standards or any failure to deliver sufficient quantities of product candidates in a timely manner, could lead to a delay in, or failure to obtain, regulatory approval of any of our product candidates.

To date, we have relied upon a contract manufacturer to manufacture small quantities of pelareorep. The manufacturer may encounter difficulties in scaling up production, including production yields, quality control, and quality assurance. Only a limited number of manufacturers can supply therapeutic viruses and failure by the manufacturer to deliver the required quantities of pelareorep on a timely basis at a commercially reasonable price may have a material adverse effect on us. We have completed a program for the development of a commercial process for manufacturing pelareorep and have filed a number of patent applications related to the process. There can be no assurance that we will successfully obtain sufficient patent protection related to our manufacturing process.

In addition to third-party manufacturers, we rely on other third parties to test, package, store, monitor, and transport bulk drug substance and drug product. If we are unable to arrange for such third-party sources, or fail to do so on commercially reasonable terms, we may not be able to successfully supply sufficient product candidate or we may be delayed in doing so. Such failure or substantial delay could materially harm our business.

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***We rely on third parties to produce and provide suitable raw materials for pelareorep production, packaging, and testing as well as clinical trial-related testing. We and our third-party partners may encounter difficulties with sourcing these materials that could delay or impair our ability to manufacture pelareorep or complete product or clinical sample testing.***

We rely on contract manufacture and testing facilities to source required materials for production and evaluation of pelareorep, as well as testing of clinical trial-related samples. As a result, we have less control over the supply timing and cost of these materials than if we sourced these materials directly. In addition, these are often specialized materials and third-party suppliers may also encounter challenges in producing, testing, or distributing materials that can impact delivery quantities and timeframes. If we are unable to arrange for sufficient supply or materials are not available in a timely manner, or fail to do so on commercially reasonable terms, we may not be able to successfully produce sufficient supply of pelareorep or we may be delayed in doing so. If we are unable to arrange for appropriate testing materials or they are not available in a timely manner, we may be unable to execute some clinical trial testing or we may be delayed in doing so.

***We rely on third parties to monitor, support, conduct, and oversee clinical trials of the products that we are developing and, in some cases, to maintain regulatory files for those product candidates. We may not be able to obtain regulatory approval for our products that may result from our development efforts if we are not able to maintain or secure agreements with such third parties on acceptable terms, if these third parties do not perform their services as required, or if these third parties fail to timely transfer any regulatory information held by them to us.***

We rely on entities outside of our control, which may include clinical and research consultants, academic institutions, and contract research organizations ("CROs"), to perform, monitor, support, conduct, and oversee preclinical studies and clinical trials of pelareorep. As a result, we have less control over the timing and cost of these studies and the ability to recruit trial subjects than if we conducted these trials with our own personnel.

If we are unable to maintain or enter into agreements with these third parties on acceptable terms, or if any such engagement is terminated prematurely, we may be unable to enroll patients on a timely basis or otherwise conduct our trials in the manner we anticipate. In addition, there is no guarantee that these third parties will devote adequate time and resources to our studies or perform as required by our contract or in accordance with regulatory requirements, including maintenance of clinical trial information regarding our products. If these third parties fail to meet expected deadlines, fail to transfer to us any regulatory information in a timely manner, fail to adhere to protocols, or fail to act in accordance with regulatory requirements or our agreements with them, or if they otherwise perform in a substandard manner or in a way that compromises the quality or accuracy of their activities or the data they obtain, then clinical trials of our product candidates may be extended or delayed with additional costs incurred, or our data may be rejected by the FDA, EMA or other regulatory agencies. Ultimately, we are responsible for ensuring that each of our clinical trials is conducted in accordance with the applicable protocol, legal, regulatory, and scientific standards, and our reliance on third parties does not relieve us of our regulatory responsibilities.

If we or any of our CROs fail to comply with applicable regulatory regulations, the clinical data generated in our clinical trials may be deemed unreliable, and our submission of marketing applications may be delayed, or we may be required to perform additional clinical trials before approving our marketing applications. Our failure to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process and increase our costs. Moreover, our business may be implicated if any of our CROs violates federal or state fraud and abuse or false claims laws and regulations or healthcare privacy and security laws.

If any of our clinical trial sites terminate for any reason, we may experience the loss of follow-up information on patients enrolled in our ongoing clinical trials unless we are able to transfer the care of those patients to another qualified clinical trial site. Further, if our relationship with any of our CROs is terminated, we may be unable to enter into arrangements with alternative CROs on commercially reasonable terms, or at all. As a result, delays may occur, which can materially impact our ability to meet our desired clinical development timelines.

***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 license, development, supply, and distribution agreement (the "Licensing Agreement") with Adlai Nortye Biopharma Co., Ltd. ("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

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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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• different regulatory requirements for drug approvals in foreign countries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• different standards of care in various countries that could complicate the evaluation of our product candidates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• different U.S. and foreign drug import and export rules;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reduced protection for intellectual property rights in certain countries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• unexpected changes in tariffs, trade barriers, and regulatory requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• different reimbursement systems and different competitive drugs indicated to treat the indications for which our product candidates are being developed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• economic weakness, including inflation, or political instability in particular foreign economies and markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• compliance with the FCPA, and other anti-corruption and anti-bribery laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• U.S. and foreign taxes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• foreign currency fluctuations, which could result in reduced revenues, and other obligations incident to doing business in another country;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• potential liability resulting from development work conducted by foreign distributors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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 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.

***Negative developments in the field of immuno-oncology could damage public perception of pelareorep and negatively affect our business.***

The commercial success of pelareorep depends in part on public acceptance of the use of cancer immunotherapies including ICIs. Adverse events in clinical trials of pelareorep or in clinical trials of similar products and the resulting publicity, as well as any other negative developments in the field of immuno-oncology that may occur in the future including in connection with competitor therapies, could result in decreased acceptance of and demand for pelareorep. These events could also result in the suspension, discontinuation, or clinical hold of or modification to our clinical trials. If public perception is influenced by claims that the use of cancer immunotherapies is unsafe, whether related to pelareorep or to competitors' products, pelareorep may not be accepted by the general public or the medical community, and potential clinical trial participants may be discouraged from enrolling in our trials. As a result, we may not be able to continue or may be delayed in conducting our development programs.

Pelareorep is an oncolytic virus and, as such, adverse developments related to vaccines for viral diseases or in clinical trials of other virus-based oncolytic immunotherapy products may result in a disproportionately negative effect on the perception of pelareorep compared to other products in the field of immuno-oncology that are not based on viruses. Future negative developments in the field of immuno-oncology or the biopharmaceutical industry could also result in greater governmental regulation, stricter labeling requirements, and potential regulatory delays in the testing or approval of pelareorep. Any increased scrutiny could delay or increase the costs of obtaining marketing approval for pelareorep.

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***Our employees, independent contractors, principal investigators, contract research organizations, consultants, and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading.***

We are exposed to the risk that our employees, independent contractors, principal investigators, CROs, consultants and vendors may engage in fraudulent conduct or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or unauthorized activities that violate: (1) FDA regulations, including those laws that require the reporting of true, complete, and accurate information to the FDA, (2) manufacturing standards, (3) federal and state healthcare fraud and abuse laws and regulations, or (4) laws that require the reporting of true and accurate financial information and data. Specifically, sales, marketing, and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing, and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs, and other business arrangements. It is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us, and if we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

***We may be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties.***

We have received confidential and proprietary information from collaborators, prospective licensees, and other third parties. In addition, we employ individuals who were previously employed at other biotechnology or pharmaceutical companies. We may be subject to claims that we or our employees, consultants, or independent contractors have inadvertently or otherwise used or disclosed confidential information of these third parties or our employees' former employers. We may also be subject to claims that former employees, collaborators, or other third parties have an ownership interest in our patents or other intellectual property. We may be subject to ownership disputes in the future arising, for example, from conflicting obligations of consultants or others who are involved in developing our drug candidates. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to our management and employees.

***Our operations could be adversely affected by events outside of our control, such as natural disasters, wars or health epidemics.***

We may be impacted by business interruptions resulting from pandemics and public health emergencies, including those related to COVID-19, geopolitical actions, including war and terrorism or natural disasters including earthquakes, typhoons, floods, and fires. An outbreak of infectious disease, a pandemic or a similar public health threat, such as the COVID-19 pandemic, or a fear of any of the foregoing, could adversely impact us by causing 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 we may be affected if such an epidemic 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.

***The cost of director and officer liability insurance may increase substantially 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 are dependent on our key employees and collaborators.***

Our ability to develop the product will depend, to a great extent, on our ability to attract and retain highly qualified scientific personnel and to develop and maintain relationships with leading research institutions. Intense competition for attracting key skill-sets may limit our ability to retain and motivate key personnel on acceptable terms. We are highly dependent on the principal members of our management staff as well as our advisors and collaborators, the loss of whose services might impede the achievement of development objectives. The persons working with us are affected by a number of influences outside of our control. In the U.S., the SEC recently proposed mandatory clawback rules which would require listed companies to adopt a clawback policy providing for recovery of incentive-based compensation awarded to executive officers if we are required to prepare an accounting restatement resulting from material noncompliance with financial reporting requirements. There is the potential that new compensation rules will make it more difficult for us to attract and retain executive officers. The loss of key employees and/or key collaborators may affect the speed and success of product development.

***Barbados law differs from the laws in effect in Canada and the United States and may afford less protection to holders of our securities.***

Certain of our assets and intellectual property are held by our wholly-owned subsidiary, Oncolytics Biotech (Barbados) Inc., which is organized under the laws of Barbados. It may not be possible to enforce court judgments obtained in Canada or the United States against Oncolytics Biotech (Barbados) Inc. in Barbados based on the civil liabilities provisions of applicable securities laws. In addition, there is some doubt as to whether the courts of Barbados would recognize or enforce judgments of courts in Canada or the United States obtained against us or our directors or officers based on the civil liabilities provisions of Canadian and United States securities laws or hear actions against us or those persons based on such laws.

***Our failure to comply with data protection laws and regulations could lead to government enforcement actions (which could include civil or criminal penalties), private litigation, and/or adverse publicity and could negatively affect our operating results and business***.

We are subject to complex laws and regulations that address privacy and data security. The legislative and regulatory landscape for data protection continues to evolve, and in recent years there has been an increasing focus on privacy and data security issues. In the U.S., numerous federal and state laws and regulations, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws, govern the collection, use, disclosure, and protection of health-related and other personal information. For example, the State of California enacted the California Consumer Privacy Act of 2018 (the "CCPA"), which came into effect on January 1, 2020 and provides new data privacy rights for consumers and new operational requirements for companies, which may increase our compliance costs and potential liability. The CCPA gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. Similar laws have been proposed in Virginia, Colorado, Connecticut and Utah and at the federal level, and if passed, such laws may have potentially conflicting requirements that would make compliance challenging.

In addition, in the course of our business, we may obtain health information from third party that is subject to privacy and security requirements under the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), as amended by the Health Information Technology for Economic and Clinical Health Act ("HITECH"). Although we are not directly subject to HIPAA (other than potentially with respect to providing certain employee benefits) we could be subject to criminal penalties if we knowingly obtain or disclose individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA/HITECH.

We could also be negatively impacted by existing and proposed laws and regulations, as well as government policies and practices related to cybersecurity, data privacy, data localization, and data protection outside of the U.S., such as the General Data Protection Regulation ("GDPR"), which took effect in the EU in May 2018. The GDPR extends the geographical scope of EU data protection law to non-EU entities under certain conditions, tightens existing EU data protection principles, and creates new obligations for companies and new rights for individuals. The GDPR may increase our responsibility and potential liability in relation to personal data that we process, expose us to substantial potential fines, and increase our compliance costs. The GDPR could also cause our development costs to increase in connection with clinical trials we are currently conducting and may conduct in the future in the EU for our products and product candidates. Further, recent legal developments in Europe have created complexity and uncertainty regarding transfers of personal data from the EU to the United States. As well, from January 1, 2021, the GDPR and the United Kingdom ("UK") GDPR, which, together with the amended UK Data Protection Act 2018, retains the GDPR in UK national law. The relationship between the United Kingdom and the EU in relation to certain aspects of

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data protection law remains unclear, and it is unclear how United Kingdom data protection laws and regulations will develop in the medium to longer term, and how data transfers to and from the United Kingdom will be regulated in the long term.

Failure to comply with data protection laws and regulations both within and outside of the U.S. could result in government enforcement actions (which could include civil or criminal penalties), private litigation, and/or adverse publicity and could negatively affect our operating results and business.

***The Company may fail to achieve and maintain adequate internal control over financial reporting pursuant to the requirements of the Sarbanes-Oxley Act and equivalent Canadian legislation.***

The Company documented and tested during its most recent fiscal year its internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 ("SOX") and equivalent Canadian legislation. SOX requires an annual assessment by management of the effectiveness of the Company's internal control over financial reporting and an attestation report by the Company's independent auditors addressing this assessment, if applicable. The Company may fail to achieve and maintain the adequacy of its internal control over financial reporting as such standards are modified, supplemented, or amended from time to time, and the Company may not be able to ensure that it can conclude, on an ongoing basis, that it has effective internal control over financial reporting in accordance with Section 404 of SOX. The Company's failure to satisfy the requirements of Section 404 of SOX on an ongoing, timely basis could result in the loss of investor confidence in the reliability of its financial statements, which in turn could harm the Company's business and negatively impact the trading price of the common shares or the market value of its other securities. In addition, any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm the Company's operating results or cause it to fail to meet its reporting obligations. Future acquisitions of companies, if any, may provide the Company with challenges in implementing the required processes, procedures, and controls in its acquired operations. No evaluation can provide complete assurance that the Company's internal control over financial reporting will detect or uncover all failures of persons within the Company to disclose material information otherwise required to be reported. The effectiveness of the Company's processes, procedures, and controls could also be limited by simple errors or faulty judgments. In addition, if the Company expands, the challenges involved in implementing appropriate internal control over financial reporting will increase and will require that the Company continue to improve its internal control over financial reporting.

***Because the Company is a Canadian Company and some of its directors and officers are residents outside the United States, it may be difficult for investors in the United States to enforce civil liabilities against the Company based solely upon the federal securities laws of the United States.***

The Company is a Canadian company, with its principal place of business in Canada. Some of the Company's directors and officers, including the Company's Chief Executive Officer and Chief Financial Officer, are residents outside the United States and a significant portion of the Company's assets are located outside the United States. Consequently, it may be difficult for U.S. investors to effect service of process within the United States upon the Company or these directors or officers who are not residents of the United States, or to realize in the United States upon judgments of courts of the United States predicated upon civil liabilities under the U.S. Securities Act of 1933, as amended. Investors should not assume that Canadian courts (1) would enforce judgments of U.S. courts obtained in actions against the Company or such directors or officers predicated upon the civil liability provisions of the U.S. federal securities laws or the securities or "blue sky" laws of any state within the United States or (2) would enforce, in original actions, liabilities against the Company or such directors or officers predicated upon the U.S. federal securities laws or any such state securities or "blue sky" laws. In addition, the protections afforded by Canadian securities laws may not be available to investors in the United States.

***As a foreign private issuer, our shareholders may have less complete and timely data.***

The Company is a "foreign private issuer" as defined in Rule 3b-4 under the United States Securities Exchange Act of 1934, as amended (the "U.S. Exchange Act"). Equity securities of the Company are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f), and 16 of the U.S. Exchange Act pursuant to Rule 3a12-3 of the U.S. Exchange Act. Therefore, the Company is not required to file a Schedule 14A proxy statement in relation to its annual meeting of shareholders. The submission of proxy and annual meeting of shareholder information on Form 6-K may result in shareholders having less complete and timely information in connection with shareholder actions. The exemption from Section 16 rules regarding reports of beneficial ownership and purchases and sales of common shares by insiders and restrictions on insider trading in our securities may result in shareholders having less data and there being fewer restrictions on insiders' activities in our securities.

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***If we were to lose our foreign private issuer status under U.S. federal securities law, we would likely incur additional expenses associated with compliance with the U.S. securities law applicable to U.S. domestic issuers.***

As a foreign private issuer, as discussed above under the risk factor titled "*As a foreign private issuer, our shareholders may have less complete and timely data,*" we are exempt from certain provisions of the U.S. federal securities law. The determination of foreign private issuer status is made annually on the last business day of an issuer's most recently completed second fiscal quarter. We would lose our foreign private issuer status if, for example, more than 50% of our common shares are directly or indirectly held by residents of the United States and we fail to meet additional requirements necessary to maintain our foreign private issuer status. If we lose our foreign private issuer status on this date, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We will also have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors, and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we will lose our ability to rely upon exemptions from certain corporate governance requirements under the Nasdaq listing rules. As a U.S. listed public company that is not a foreign private issuer, we will incur significant additional legal, accounting, and other expenses that we will not incur as a foreign private issuer, and accounting, reporting, and other expenses in order to maintain a listing on a U.S. securities exchange. These rules and regulations could also make it more difficult for us to attract and retain qualified members of our board of directors and more expensive to procure director and officer liability insurance.

***As a non-accelerated filer, we are not required to comply with the auditor attestation requirements of the Sarbanes-Oxley Act.***

We are a non-accelerated filer under the Exchange Act and we are not required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002. Therefore, our internal controls over financial reporting will not receive the level of review provided by the process relating to the auditor attestation included in annual reports of issuers that are subject to the auditor attestation requirements. In addition, we cannot predict if investors will find our common shares less attractive because we are not required to comply with the auditor attestation requirements. If some investors find our common shares less attractive as a result, there may be a less active trading market for our common shares and trading price for our common shares may be negatively affected.

***The Company is likely a "passive foreign investment company" which may have adverse U.S. federal income tax consequences for U.S. shareholders.***

U.S. holders of Common Shares should be aware that the Company believes it was classified as a passive foreign investment company ("PFIC") during the tax year ended December 31, 2022, and based on current business plans and financial expectations, the Company expects that it will be a PFIC for the current tax year and may be a PFIC in future taxable years. If the Company is a PFIC for any year during a U.S. holder's holding period of the Common Shares, then such U.S. shareholder generally will be required to treat any gain realized upon a disposition of Common Shares, or any "excess distribution" received on its Common Shares, as ordinary income, and to pay an interest charge on a portion of such gain or distribution, unless the shareholder makes a timely and effective qualified electing fund election ("QEF Election") or a mark-to-market election with respect to the Common Shares. A U.S. holder who makes a QEF Election generally must report on a current basis its share of the Company's net capital gain and ordinary earnings for any year in which the Company is a PFIC, whether or not the Company distributes any amounts to its shareholders. However, U.S. holders should be aware that there can be no assurance that the Company will satisfy the record keeping requirements that apply to a qualified electing fund, or that the Company will supply U.S. holders with information that such U.S. holders require to report under the QEF Election rules, in the event that the Company is a PFIC and a U.S. holder wishes to make a QEF Election. Thus, U.S. holders may not be able to make a QEF Election with respect to their Common Shares. A U.S. holder who makes the mark-to-market election generally must include as ordinary income each year the excess of the fair market value of the Common Shares over the taxpayer's adjusted tax basis therein. This paragraph is qualified in its entirety by the discussion below under the heading "*Material United States Federal Income Tax Considerations.*" Each U.S. holder should consult its own tax advisors regarding the PFIC rules and the U.S. federal income tax consequences of the acquisition, ownership, and disposition of Common Shares.

**Risks related to our Common Shares** 

***Volatility of market price of the Common Shares.***

The market price of the Common Shares may be volatile. The volatility may affect the ability of holders of Common Shares to sell the Common Shares at an advantageous price. Market price fluctuations in the Common Shares may be due to the Company's operating results failing to meet the expectations of securities analysts or investors in any quarter, downward

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revision in securities analysts' estimates, governmental regulatory action, adverse change in general market conditions or economic trends, acquisitions, dispositions or other material public announcements by the Company or its competitors, along with a variety of additional factors, including, without limitation, those set forth under "Cautionary Note Regarding Forward-Looking Statements" in this annual report on Form 20-F. In addition, the market price for securities in the stock markets, including the NASDAQ and the TSX, recently experienced significant price and trading fluctuations. These fluctuations have resulted in volatility in the market prices of securities that often has been unrelated or disproportionate to changes in operating performance. These broad market fluctuations may adversely affect the market price of the Common Shares

***Potential dilution of present and prospective shareholdings.***

In order to finance future operations and development efforts, the Company may raise funds through the issue of common shares or the issue of securities convertible into common shares. The Company cannot predict the size of future issues of common shares or the issue of securities convertible into common shares or the effect, if any, that future issues and sales of the Company's common shares will have on the market price of its common shares. Any transaction involving the issue of previously authorized but unissued shares, or securities convertible into shares, would result in dilution, possibly substantial, to present and prospective holders of shares.

***The Company does not intend to pay cash dividends in the foreseeable future.***

The Company has not declared or paid any dividends since its incorporation. The Company intends to retain earnings, if any, to finance the growth and development of its business and does not intend to pay cash dividends on the Common Shares in the foreseeable future. Any return on an investment in the common shares will come from the appreciation, if any, in the value of the Common Shares. The payment of future cash dividends, if any, will be reviewed periodically by the board of directors and will depend upon, among other things, conditions then existing including earnings, financial condition, and capital requirements, restrictions in financing agreements, business opportunities and conditions, and other factors.

**General Risks** 

***Changes in law could adversely affect our business and corporate structure.***

There can be no assurances that changes will not occur in corporate, tax, property, and other laws in Canada and/or Barbados (or the interpretation thereof by regulatory or tax authorities) which may materially and adversely affect our businesses and corporate structure.

***Our operations may be adversely affected by disruptions to our information technology ("IT") systems, including disruptions from cybersecurity breaches of our IT infrastructure.***

We rely on information technology networks and systems, including those of third-party service providers, to process, transmit and store electronic information. In particular, we depend on our information technology infrastructure for a variety of functions, including financial reporting, data management, and email communications. Any of these systems may be susceptible to outages due to fire, floods, power loss, telecommunications failures, terrorist attacks, sabotage, and similar events. Global cybersecurity threats and incidents can range from uncoordinated individual attempts to gain unauthorized access to our information technology systems to sophisticated and targeted measures known as advanced persistent threats. The ever-increasing use and evolution of technology, including cloud-based computing, creates opportunities for the unintentional dissemination or intentional destruction of confidential information stored in our systems or in non-encrypted portable media or storage devices. We could also experience a business interruption, information theft of confidential information, or reputational damage from industrial espionage attacks, malware or other cyber-attacks, which may compromise our system infrastructure or lead to data leakage, either internally or at our third-party providers. Despite the implementation of network security measures and disaster recovery plans, our systems and those of third parties on which we rely may also be vulnerable to computer viruses, break-ins, and similar disruptions. If we or our vendors are unable (or are perceived as unable) to prevent such outages and breaches, our operations may be disrupted, and our business reputation could be adversely affected.

We expect that risks and exposures related to cybersecurity attacks will remain high for the foreseeable future due to the rapidly evolving nature and sophistication of these threats. In addition, as a result of the COVID-19 pandemic, we may face increased cybersecurity risks due to our reliance on internet technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities.

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***Failure to meet regulatory or ethical expectations on environmental impact, including climate change.***

Environmental issues will become more material in the marketplace as the wider healthcare system embraces net -zero climate targets. The environmental targets and performance of our business will come under increased scrutiny by investors, governments, and non-governmental organizations. Environmental considerations are starting to become embedded in the public procurement of goods and services, including medicinal products and devices. Specific intermediates used to manufacture medicines, or those used as excipients or propellants, are coming under increased regulation and some may be subject to time-limited exemptions or potential phase-out. The physical impacts of climate change could impact the resilience of our business operations and supply chain.

**ITEM 4. INFORMATION ON THE COMPANY**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.History and Development of the Company**

Oncolytics Biotech Inc. was formed under the *Business Corporations Act* (Alberta) on April 2, 1998 as 779738 Alberta Ltd. On April 8, 1998, we changed our name to Oncolytics Biotech Inc.

Our principal place of business is located at 804, 322 11<sup>th</sup> Avenue SW, Calgary, Alberta, Canada T2R 0C5, telephone (403) 670-7377. Our agent for service in the U.S. is Registered Agent Solutions, Inc., 838 Walker Road Suite 21-2 Delaware 19904.

A description of the important events in our development including licensing transactions, our principal capital expenditures and divestitures and a description of acquisitions of material assets can be found in our MD&A and in the notes to our financial statements included elsewhere in this annual report.

The SEC maintains a Website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC at www.sec.gov. The filings are also contained on the Company's website at www.oncolyticsbiotech.com. Information on the Company's website is not incorporated by reference herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.Business Overview** 

***Overview***

We are a clinical-stage biopharmaceutical company developing pelareorep, a safe and well-tolerated intravenously delivered immunotherapeutic agent that activates the innate and adaptive immune systems and weakens tumor defense mechanisms. This improves the ability of the immune system to fight cancer, making tumors more susceptible to a broad range of oncology treatments.

Pelareorep is a proprietary isolate of a naturally occurring, non-pathogenic double-stranded RNA (dsRNA) virus commonly found in environmental waters, known as reovirus. Pelareorep has demonstrated the ability to create a more permissive tumor microenvironment (TME) and conditions the tumor for multiple treatment combinations, including chemotherapies, checkpoint inhibitors and other immuno-oncology drugs, like CAR T therapies, bispecific antibodies, and CDK4/6 and PARP inhibitors. Pelareorep creates a new army of tumor-reactive T cells, helps these cells to infiltrate the tumor through an inflammatory process, and promotes the overexpression of PD-1/PD-L1. By priming the immune system with pelareorep, we believe we can increase the proportion of patients who respond to immunotherapies and other cancer treatments, especially in cancers where immunotherapies have failed or provided limited benefit.

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. To date, we have funded our operations mainly through the issuance of additional capital via public offerings, equity distribution arrangements, and through the exercise of warrants and stock options. There can be no assurance that we will be able to raise additional funds through the sale of our common shares.

***Business Strategy***

Our business strategy is to develop and seek regulatory approval to market pelareorep in an effective and timely manner, and access additional technologies at a time and in a manner that we believe is best for our development. We intend to achieve our business strategy by focusing on these key areas:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Continue to assess the safety and efficacy of pelareorep in human subjects through our clinical development program;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Maintain existing and establish new collaborations with experts to assist us with scientific and clinical developments of this new potential pharmaceutical product;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Implement strategic alliances with select biopharmaceutical companies and laboratories, at a time and in a manner whereby such alliances may complement and expand our own research and development efforts. Such alliances may also result in an eventual expansion to include providing additive sales and marketing capabilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Use our broadening patent base and collaborator network as a mechanism to meet our strategic objectives; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Develop relationships with companies that could be instrumental in assisting us to access other innovative therapeutics.

As our clinical development program advances, we anticipate pelareorep's ability to enhance innate and adaptive immune responses within the TME will play an increasingly important role. This greatly increases opportunities for expansion of our clinical program along with business development and partnering opportunities to address a broad range of cancers in combination with a variety of other therapies. We believe this approach has the most promise for generating clinically impactful data and offers the most expeditious path to regulatory approval.

Our primary focus is to advance our programs in hormone receptor-positive / human epidermal growth factor 2-negative (HR+/HER2-) metastatic breast cancer (mBC) and advanced/metastatic pancreatic ductal adenocarcinoma (PDAC) to phase 3 licensure-enabling studies. In addition, we are exploring opportunities for registrational programs in gastrointestinal cancers through our GOBLET platform study.

Our business strategy is based on attaining a number of commercial objectives, which, in turn, are supported by a number of product development goals. In the context of this annual report, statements of our "belief" are based primarily upon our results derived to date from our research and development program with animals, early-stage human trials, and our most recent data from our mid-stage clinical trials, upon which we believe that we have a reasonable scientific basis to expect the particular results to occur. It is not possible to predict, based upon studies in animals, or early- to -mid-stage human trials, whether a new therapeutic will ultimately prove to be safe and effective in humans. There are no assurances that the particular result expected by us will occur.

We are pursuing a strategy of establishing relationships with larger companies as strategic partners. It is anticipated that future clinical development into large international or pivotal trials would generally occur in conjunction with a strategic partner or partners, who would contribute expertise and financial assistance. In exchange for certain product rights and commitments to market our products, the strategic partners would be expected to share in proceeds from the sale of our product or products.

***Scientific Background & Summary of Research and Development Highlights***

Pelareorep's anti-tumor activity is based on three complementary modes of action (Figure 1):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Selective viral replication in permissive cancer cells which leads to tumor cell lysis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Activation of innate immunity in response to the infection, which results in a cascade of chemokines/cytokines, causing natural killer (NK) cells to be activated and attack cancer cells.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A specific adaptive immune response targeted to tumor- and viral-associated antigens displayed by antigen-presenting cells (APCs), infected tumor cells and/or dendritic cells to T cells.

Preclinical and translational research to date indicates the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pelareorep has anticancer effects in a variety of animal models demonstrating that it can reduce tumor burden and prolong survival in these models.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The anticancer effects in animal models can be enhanced when pelareorep is given in combination with chemotherapy, immunotherapy, radiotherapy, and other targeted cancer therapies, highlighting the ability of pelareorep to enhance the anticancer effects of a broad range of cancer therapeutics.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A toxic dose of pelareorep has not been reached/established in animal models and doses as high as 9.0 x 10<sup>10</sup> TCID50 have been well-tolerated in humans; treatment with pelareorep causes manageable side-effects.

Clinical data to date indicate the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• More than 1,500 patients have received at least one dose of study treatment in clinical studies with pelareorep. Of these, more than 1,100 patients received pelareorep, over 600 patients patients in Oncolytics-sponsored trials, and over 500 in investigator-sponsored trials received pelareorep by intravenous (IV) administration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pelareorep has been administered as single or multiple doses (intratumoral or intravenous), either as a monotherapy or in combination with chemotherapy, immunotherapy (e.g., checkpoint inhibitors), and/or radiotherapy.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pelareorep is generally well-tolerated and has a manageable side effect profile.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• When combined with chemotherapy or immunotherapy, pelareorep does not appear to enhance either the frequency or severity of the adverse effects of these agents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Efficacy results from clinical studies show that treatment with pelareorep can improve the outcome of cancer patients with a variety of different tumors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In a randomized Phase 2 study with 74 metastatic breast cancer (mBC) patients, known as IND.213, treatment with pelareorep plus paclitaxel versus paclitaxel alone demonstrated a statistically significant improvement in median overall survival: 17.4 months versus 10.4 months, respectively (HR = 0.65; 80% CI 0.46–0.91; p=0.1). In a post hoc subgroup analysis of patients with hormone receptor-positive, human epidermal growth factor receptor 2 negative (HR+/HER2-) diseases, the median OS benefit from the addition of pelareorep to paclitaxel was even greater compared to paclitaxel alone: 21.0 months versus 10.8 months, respectively (HR = 0.60; p=0.1).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In the AWARE-1 window-of-opportunity study, most HR+/HER2- early breast cancer patients treated with pelareorep showed an increase in CeLTIL score, a measure of tumor cellularity and tumor infiltrating lymphocytes (TILs) that is associated with a better prognosis in breast cancer. Importantly, addition of the immune checkpoint inhibitor atezolizumab to pelareorep increased both the magnitude of the increase in CeLTIL score and the proportion of patients with a positive CelTIL score thereby achieving the study's primary endpoint. Biomarker data from AWARE-1 further demonstrated that pelareorep treatment reversed immunosuppressive tumor microenvironments, generated and expanded T cell clones, upregulated PD-L1 expression, and promoted CD8+ T cell tumor infiltration into tumors. Many of these effects were even more prominent when pelareorep was combined with atezolizumab demonstrating synergy between the two agents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In the GOBLET platform study interim results, the objective response rate (ORR) and clinical benefit rate (CBR) were 69% and 85%, respectively, in the first-line advanced/metastatic pancreatic ductual adenocarcinoma (PDAC) cohort. The observed ORR of 69% is substantially higher than the average ORR of ~25% reported in historical control trials of gemcitabine and nab-paclitaxel in pancreatic cancer. Additional data also included:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ One of thirteen evaluable patients achieved a confirmed complete response

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Eight of thirteen evaluable patients achieved a partial response (PR)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Two of thirteen evaluable patients achieved stable disease (SD)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The cohort exceeded the protocol-specified success criterion for Stage 1 of ≥ 3/12 objective responses

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In a single-arm study with gemcitabine plus pelareorep, in first-line patients with metastatic pancreatic ductal adenocarcinoma, known as REO 017, the median OS was 10.2 months with 1-year and 2-year survival rates of 45% and 24%, respectively. These results were encouraging when compared to 20–22% and 2–5% benchmark 1-year and 2-year survivals, respectively for metastatic PDAC patients treated with gemcitabine alone from two different phase 3 studies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In a two-arm Phase 2 study (NCI 8601), patients with metastatic PDAC were randomized to receive either carboplatin, paclitaxel and pelareorep (test arm) or carboplatin and paclitaxel alone (control arm). The median OS was similar for both arms, but the probability of survival at Year 2 was 20% in the test arm vs. 9% in the control arm. Evaluation of patient samples collected during this clinical trial identified the immunomodulatory CEA cell adhesion molecule 6 (CEACAM6) as a potential predictive biomarker for response to pelareorep therapy. Specifically, low levels of CEACAM6 mRNA expression were associated with prolonged progression-free survival in pelareorep-treated patients (10.3 months in CEACAM6 low versus 5.7 months in CEACAM6 high patients, p=0.05); importantly, this effect was not seen in the control arm.

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**<u>Mechanism of Action</u>**

**Figure 1. Proposed mechanism of action for pelareorep**

![oncyf-20221231_g1.jpg](oncyf-20221231_g1.jpg)

**1. Direct cell lysis - Reovirus Replication in Permissive Cancer Cells**

Selective viral replication and lysis in cancer cells and not normal cells is mediated by the host cellular protein dsRNA-activated protein kinase (PKR). PKR is activated in non-cancer cells infected with reovirus, which in turn inhibits viral gene translation. However, in permissive cancer cells, PKR activation is inhibited, allowing viral gene translation and eventual cell lysis.

It was originally established that selective lysis of tumor cells was mediated by the activated rat sarcoma virus oncogene (RAS)-pathway, since active RAS inhibits PKR activation. However, more recent investigations have revealed that reovirus replication is not restricted to cells with an active RAS pathway; rather oncogenic mutations and amplifications in upstream and downstream mediators of the RAS-pathway also allow viral replication and oncolysis. Moreover, active RAS is known to stimulate over 18 downstream effector proteins, many of which have been shown to facilitate viral replication. Cells bearing dysfunctional or deleted tumor suppressor genes and/or undergoing chemo- or radiation-induced cell stress also show increased sensitivity to reovirus replication and lysis.

**2. Induction of Innate Immunity**

Preclinical and clinical studies provide compelling evidence that pelareorep functions as a systemically-delivered immunogenic agent that acts locally at the site of the tumor. Indeed, preclinical studies demonstrated that cancer cells infected with pelareorep can produce an innate immune response triggering the release of inflammatory cytokines. This inflammatory environment promotes a chemotactic response in NK cells, dendritic cells, and cytotoxic T-cells, altering the tumor microenvironment to support bystander immune-mediated cancer cell death. Intriguingly, preclinical studies have also demonstrated that the beneficial immunogenic functions of pelareorep can occur independently of viral replication. Pelareorep performs this immunogenic function, in part, by activating dendritic cells, key regulators of both adaptive and innate immunity. Dendritic cells activated by reovirus, in turn, stimulate the innate antitumor activity of NK cells and aid in the priming of specific antitumor cytotoxic lymphocyte, demonstrating that dendritic cell recognition of reovirus may trigger a beneficial innate immune response.

A clinical trial with pelareorep (REO 013) provided an opportunity to study human NK cell activation in a controlled manner. Ten colorectal cancer patients with liver metastases received between one and five doses of pelareorep prior to surgical resection of their tumor. NK cell activation peaked 24-48 hours post-infection, coincident with a peak in pro-inflammatory cytokines. NK cells within a population of reovirus-treated blood mononuclear cells were stimulated to kill tumor targets, but not normal hepatocytes. Moreover, peripheral blood mononuclear cells were able to hand-off virus to tumors for direct oncolytic killing. Similarly, NK cells within a liver mononuclear cell population became selectively cytotoxic toward tumor

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cells when activated by reovirus. These results showed that reovirus modulates human NK cell activity in vivo and suggest that this may contribute to the therapeutic effect of pelareorep.

**3. Induction of Adaptive Immunity**

Adaptive anti-tumor immunity eliminates existing cancer cells and performs constant surveillance, preventing relapse, and increasing overall survival. An adaptive immune response requires two signals: a signal from an APC, as well as a co-stimulation signal in the form of cytokines. In the absence of either signal, the adaptive immune response fails. Therapy with pelareorep has the potential to activate both signals. Following administration, pelareorep enhances the expression of 'foreign' antigens/markers on tumor cells. Oncolysis of tumor cells exposes tumor-associated antigens (TAAs) and viral-associated antigens (VAAs) for processing and presentation by APCs, such as dendritic cells. Through this process, pelareorep facilitates the display of novel 'foreign' antigens on the surface of infected tumor cells and APCs. Simultaneously, pelareorep induces an inflammatory response including the expression of co-stimulatory molecules and inflammatory cytokines. Together, these pelareorep-mediated immunological events initiate adaptive anti-tumor immunity.

By promoting the expression of novel antigens and the release of inflammatory cytokines, pelareorep, promotes an inflamed tumor phenotype. An inflamed tumor phenotype is characterized by NK and T-cell infiltration, increased expression of chemokines/cytokines, and increased expression of checkpoint ligands such as PD-L1. This phenotype correlates with an increase in overall survival and has a positive prognostic value for early-stage cancers. In patients with metastatic cancer, an inflamed tumor phenotype is associated with better clinical outcomes when treated with immunotherapies, including immune checkpoint inhibitors, cancer vaccines, and adaptive T-cell therapies. By promoting an inflamed tumor phenotype, pelareorep primes an anti-cancer immune response (Figure 2).

**Figure 2. Pelareorep primes an anti-cancer immune response**

![oncyf-20221231_g2.jpg](oncyf-20221231_g2.jpg)

***Clinical Development***

**<u>Breast Cancer Program</u>**

During 2021 and 2022, the results of our AWARE-1 window-of-opportunity study were presented at multiple conferences. This study examined the use of pelareorep with or without the checkpoint inhibitor atezolizumab (Tecentriq<sup>®</sup>) in patients with breast cancer. The results of this study showed that pelareorep primed the tumor microenvironment for checkpoint blockade therapy including increasing both PD-L1 expression in the tumor and T cell trafficking into the tumor. The potentially beneficial effects of pelareorep therapy, also including the creation and expansion of T cell clones, were enhanced further by combining pelareorep with atezolizumab. Notably, patients treated with pelareorep and atezolizumab reached the primary endpoint of the study with 60% of the patients showing an increase of more than 30% in the CelTIL score, a measure that correlates with efficacy in breast cancer patients.

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In 2022, we presented clinical biomarker analyses from AWARE-1's first two cohorts at the European Society for Medical Oncology Breast Cancer Meeting (ESMOBC), the Society for Immunotherapy of Cancer Annual Meeting (SITC), and the San Antonio Breast Cancer Symposium (SABCS). The data demonstrated pelareorep's immunotherapeutic effects, synergy with checkpoint inhibition, and potential to improve the outlook for patients with HR+/HER2- breast cancer. Patients in AWARE-1's first two cohorts were treated with pelareorep and the aromatase inhibitor letrozole without (cohort 1), or with (cohort 2), the PD-L1 checkpoint inhibitor atezolizumab approximately 21 days prior to the surgical resection of their tumors.

Key data and conclusions presented at ESMOBC included:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Gene expression analyses showed 100% of evaluable patients had a Risk of Recurrence Score (ROR-S) classified as "low" at surgery vs. 55% with a "low" ROR-S at baseline

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pooled analysis of tumors from cohorts 1 and 2 shows a statistically significant 4-fold post-treatment increase in the average expression of caspase 3, which is a marker of apoptotic cell death

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pooled analysis across cohorts 1 and 2 shows statistically significant increases in markers of T cell activation and no significant changes in markers of T cell exhaustion from baseline to surgery

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Treatment with pelareorep with (cohort 2) or without (cohort1) atezolizumab led to the conversion of tumors from the more aggressive luminal B to the luminal A subtype, which is associated with improved clinical outcomes

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 100% of evaluable cohort 2 tumors were luminal A at surgery (21 days post-treatment) vs. 70% at baseline (pre-treatment)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 70% of evaluable cohort 1 patients had luminal A tumors at surgery vs. 40% at baseline

Data presented at SITC demonstrated that flow cytometry analyses of blood samples from these patients showed a statistically significant increase in anti-cancer natural killer (NK) cells on day 21 post-treatment in cohort 2 compared to cohort 1. In addition, cohort 2 patients showed higher levels of HLA-DR expression (a marker of T cell activation) in anti-cancer CD8+ T cells, and better maintained low levels of T cell exhaustion markers on day 21 compared to cohort 1 patients.

Data presented at SABCS demonstrated that based on the gene expression profiling data, it was shown that pelareorep primes the tumor for further checkpoint blockade therapy by activating the interferon-gamma pathway.

During 2022, enrollment into our BRACELET-1 (**BR**east c**A**n**CE**r with the Oncolytic Reovirus Pe**L**areor**E**p in Combina**T**ion with anti-PD-L1 and Paclitaxel) study concluded. We continued re-treating patients still on-study, monitored those patients who came off treatment due to progression, and assisted with follow-up activities. These activities included analyzing data on the study's primary endpoint of week 16 overall response rate and secondary endpoints of progression-free survival (PFS) and overall survival. BRACELET-1 is a randomized study of HR+/HER2-metastatic breast cancer patients and is evaluating tumor and immune responses following treatment with either paclitaxel (standard of care therapy), paclitaxel + pelareorep or paclitaxel + pelareorep + the checkpoint inhibitor avelumab (Bavencio<sup>®</sup>). The results of the BRACELET-1 study may provide important confirmatory data in the same patient population as our IND.213 study, for which we presented a statistically significant near doubling of overall survival with pelareorep treatment in HR+/HER2- mBC.

In the fourth quarter of 2022, our partner, Adlai Nortye Biopharma Co., Ltd. ("Adlai"), announced interim results at the 2022 SABCS. Fifteen patients were treated in the bridging clinical trial, with fourteen having had at least one post-baseline tumor assessment (i.e., evaluable for efficacy). All patients enrolled into the trial were previously treated with at least one endocrine therapy and no more than one line of chemotherapy for recurrent/metastatic disease. The data and conclusions are summarized as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Disease control, partial response (PR), or stable disease (SD), was achieved in thirteen of fourteen evaluable patients (93%), with twelve (86%) showing tumor shrinkage from baseline

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Seven of fourteen evaluable patients achieved a PR (50%). Three of these patients achieved a confirmed PR (20%), while two patients are awaiting potential confirmatory scans

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• One patient achieving a PR at week 8 has maintained the PR through week 48 and remains on study

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Evolving median PFS for trial participants as of the data cut-off date was 9.1 months (95% confidence interval: 3.8 - NA)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The studied combination has been well tolerated, with no dose-limiting toxicities or serious adverse events (SAEs) reported to date

Adlai's bridging clinical trial is evaluating the safety, tolerability, and preliminary efficacy of pelareorep-paclitaxel combination therapy in Chinese patients with advanced/metastatic HR+/HER2- breast cancer. Data from the bridging trial are expected to accelerate Adlai's development of pelareorep in China by allowing future regulatory submissions to include data from Oncolytics' North American metastatic breast cancer trials, IND.213 and BRACELET-1.

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**<u>Gastrointestinal Cancer Program</u>**

In addition to our breast cancer program, we continued to explore pelareorep in gastrointestinal cancers. Notably, in 2021 enrollment began into the platform study known as GOBLET (**G**astrointestinal tum**O**rs exploring the treatment com**B**inations with the oncolytic reovirus pe**L**ar**E**orep and an**T**i-PD-L1). GOBLET is examining combination therapy with pelareorep and atezolizumab (Tecentriq<sup>®</sup>) in four gastrointestinal indications: (1) Patients with first-line locally advanced/metastatic unresectable pancreatic ductal adenocarcinoma (PDAC); (2) Patients with first-line metastatic colorectal cancer (mCRC), limited to microsatellite instability-high (MSI-H) or mismatch repair deficient (dMMR) tumors; (3) Patients with third-line mCRC independent of microsatellite instability (MSI)/dMMR status; and (4) Patients with second-line or later locally advanced/metastatic unresectable squamous cell carcinoma of the anal canal (SCCA). This study is currently enrolling patients, and the 3-patient safety run-ins for Cohort 1 and Cohort 3 were completed in the first and second quarter of 2022 (Cohorts 2 and 4 do not require safety run-ins). Therefore, all of the trial's four cohorts were cleared for full enrollment.

During 2022, GOBLET's pancreatic cancer cohort met the efficacy expansion criteria for Stage 1 of the trial and interim clinical results were presented at SITC. Per the study's Simon two-stage design, any cohort meeting a pre-specified efficacy threshold in Stage 1 (defined as achieving a minimum number of objective radiologic responses by week 16) may be expanded to enroll additional patients in an optional Stage 2 study expansion. The initial results from the safety run-in of this cohort met the primary endpoint as all patients achieved a partial response (n = 3). Additional interim data presented at the SITC meeting included:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ORR and CBR in GOBLET's PDAC cohort (n=13) were 69% and 85%, respectively;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• One of thirteen evaluable patients achieved a confirmed complete response;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Eight of thirteen evaluable patients achieved a PR;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Two of thirteen evaluable patients achieved SD;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The observed ORR of 69% is substantially higher than the average ORR of ~25% reported in historical control trials of gemcitabine and nab-paclitaxel in pancreatic cancer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The PDAC cohort exceeded the protocol-specified success criterion for Stage 1 of ≥ 3/12 objective responses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The studied treatment combination has been well tolerated, with no safety concerns identified to date; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On the strength of the data, Oncolytics and its stakeholders determined that the Stage 2 expansion will not be necessary.

Finally, we received the U.S. Food and Drug Administration (FDA) Fast Track designation for the treatment of advanced/metastatic PDAC using pelareorep in combination with atezolizumab, gemcitabine, and nab-paclitaxel. Fast Track designation is designed to facilitate the development and expedite the review of therapies to treat serious conditions and fill an unmet medical need. A clinical program that receives Fast Track designation may benefit from more frequent meetings and communications with the FDA to discuss development plans and ensure the collection of appropriate data needed to support approval.

***Patents and Trade Secrets***

We rely on our patent portfolio to protect the development of pelareorep. Currently, we have 243 issued patents including 24 issued in the U.S. and 11 in Canada. We also have 17 patents pending in the U.S., Canada, and other jurisdictions.

We believe we have established a robust and defensive intellectual property position that includes claims covering:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Compositions of matter comprising reovirus;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pharmaceutical use of reoviruses to treat neoplasia and cellular proliferative diseases;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Combination therapy with radiation, chemotherapy, and/or immunosuppressants; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Methods for manufacturing reovirus.

We are not currently aware of competing intellectual property relating to our pelareorep project. While we believe that we have the necessary freedom to operate in these areas, there can be no assurance that others will not challenge our position in the future. Litigation to defend our position could be costly and time-consuming and we cannot be certain we will be successful.

We also rely on unpatented trade secrets and improvements, unpatented know-how, and continuing technological innovation to develop and maintain our competitive position. No assurance can be given that others will not independently develop substantially equivalent proprietary information and techniques, or otherwise gain access to our trade secrets or disclose such technology, or that we can meaningfully protect our rights to our unpatented trade secrets.

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We require our employees and consultants to execute confidentiality agreements upon the commencement of employment and consulting relationships with us. These agreements provide that all confidential information developed by or made known to an individual during the course of their employment or consulting relationship generally must be kept confidential. In the case of employees, the agreements provide that all inventions conceived by the individual, while employed by us, relating to our business are our exclusive property. While we have implemented reasonable business processes and agreements with which to protect confidential information, these actions may not provide meaningful protection for our trade secrets in the event of unauthorized use or disclosure of such information.

***Regulatory Requirements***

The development of new pharmaceuticals is strongly influenced by a country's regulatory environment. The primary regulatory body in the United States is the FDA and in Europe is the European Medicines Agency (the "EMA"). The drug approval process in Canada is regulated by Health Canada. Similar processes are conducted in specific countries by equivalent regulatory bodies. Regulations in each jurisdiction require the licensing of manufacturing facilities and mandate strict research and product testing standards. Companies must establish the safety and efficacy of their products, comply with cGMP and potentially submit marketing materials before being allowed to market pharmaceutical products. While we plan to pursue or support the pursuit of the approval of our product, success in acquiring regulatory approval for any product is not assured.

In order to market our pharmaceutical product in Canada, the United States, Europe, and other jurisdictions, we must successfully meet the requirements of those jurisdictions. The requirements of the appropriate regulatory authority will generally include the following stages as part of the regulatory process:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***• Pre-Pharmacological Studies*** - Pre-Pharmacological studies involve extensive testing on laboratory animals to determine if a potential therapeutic product has utility in an *in vivo* disease model and has any adverse toxicology in a disease model.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***• Investigational New Drug Application*** - An Investigational New Drug (IND) Submission, or the equivalent, must be submitted to the appropriate regulatory authority prior to conducting Pharmacological Studies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***• Pharmacological Studies*** (or Phase 1 Clinical Trials) - Pharmacological studies are designed to assess the potential harmful or other side effects that an individual receiving the therapeutic compound may experience. These studies, usually short in duration, are often conducted with healthy volunteers or actual patients and use up to the maximum expected therapeutic dose.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***• Therapeutic Studies*** (or Phase 2 and 3 Clinical Trials) - Therapeutic studies are designed primarily to determine the appropriate manner for administering a drug to produce a preventive action or a significant beneficial effect against a disease. These studies are conducted using actual patients with the condition that the therapeutic is designed to remedy. Prior to initiating these studies, the organization sponsoring the program is required to satisfy a number of requirements via the submission of documentation to support the approval for a clinical trial.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***• New Drug Submission*** - After all three phases of a clinical trial have been completed, the results are submitted with the original IND Submission to the appropriate regulatory authority for marketing approval. Once marketing approval is granted, the product is approved for commercial sales.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Manufacturing and Controls*** – Concurrent with pharmacological and therapeutic studies, the manufacturing process is developed, and applicable controls implemented. This information is submitted to the appropriate regulatory authority with more defined requirements for process and product control by later stage studies and prior to New Drug Submission.

**<u>Marketing Approvals</u>**

The results of the preclinical and clinical testing, together with manufacturing and controls information, are submitted to regulatory agencies in order to obtain approval to commence commercial sales. In responding to such an application, regulatory agencies may grant marketing approval, request additional information or further research, or deny the application if they determine that the application does not satisfy their regulatory approval criteria. Approval for a pharmaceutical or biologic product may not be granted on a timely basis, if at all. If granted, the approval may not cover all the clinical indications for which approval is sought, or may contain significant limitations in the form of warnings, precautions, or contraindications with respect to conditions of use.

The satisfaction of pre-market approval requirements for new drugs and biologics typically takes several years, with the actual time required varying substantially based upon the type, complexity, and novelty of the product or targeted disease.

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Government regulation may delay or prevent marketing of potential products for a considerable period of time and impose costly procedures upon our activities. Success in early-stage clinical trials or with prior versions of products does not assure success in later-stage clinical trials. Data obtained from clinical activities are not always conclusive and may be susceptible to varying interpretations that could delay, limit or prevent regulatory approval.

**<u>Post-Marketing Regulations</u>**

Once approved, regulatory agencies may withdraw the product approval if compliance with pre- and/or post-marketing regulatory standards is not maintained or if problems occur after the product reaches the marketplace. In addition, they may require post-marketing studies, referred to as Phase 4 studies, to monitor the effect of an approved product, and may limit further marketing of the product based on the results of these post-market studies. The FDA and other foreign regulatory agencies have broad post-market regulatory and enforcement powers, including the ability to levy fines and penalties, suspend or delay issuance of approvals, seize or recall products, or withdraw approvals.

**<u>Manufacturing Regulations</u>**

We are economically dependent on our toll manufacturers. We primarily use one toll manufacturer in the U.S. to produce the clinical grade pelareorep active ingredient and a second toll manufacturer to formulate finished product required for our clinical trial program. Any significant disruption of the services provided by our primary toll manufacturers has the potential to delay the progress of our clinical trial program. We have used another toll manufacturer in the U.K. that has also produced clinical grade pelareorep at a smaller scale. We have attempted to mitigate this risk by identifying an alternative toll manufacturer, establishing stability profiles for long-term storage of pelareorep, and producing sufficient pelareorep in advance of patient enrollment in a particular clinical trial.

Our toll manufacturers are subject to periodic inspection by the FDA, the United States Drug Enforcement Administration, or DEA, and other domestic and foreign authorities where applicable, and must comply with cGMP regulations. Manufacturers of biologics also must comply with general biological product standards. Failure to comply with the statutory and regulatory requirements subjects the manufacturer to possible legal or regulatory action, such as suspension of manufacturing, seizure of product, or mandatory or voluntary recall of a product. Adverse experiences with the product must be reported to the FDA and foreign agencies and could result in the imposition of market restrictions through labeling changes or in product removal. Product approvals may be withdrawn if compliance with regulatory requirements is not maintained or if problems concerning safety or efficacy of the product occur following approval.

**<u>Advertising and Promotion Regulations</u>**

With respect to both pre- and post-market product advertising and promotion, the FDA and similar foreign agencies impose a number of complex regulations on entities that advertise and promote pharmaceuticals and biologics, which include, among other things, standards and regulations relating to direct-to-consumer advertising, on vs. off-label promotion, industry-sponsored scientific and educational activities, and promotional activities involving the internet. These agencies have very broad enforcement authority and failure to abide by these regulations can result in penalties including the issuance of a warning letter directing the entity to correct deviations from requisite standards, a requirement that future advertising and promotional materials be pre-cleared by the FDA or relevant foreign agencies. Foreign, state and federal civil and criminal investigations, fines, and prosecutions are also possible if advertising and promotion regulations are breached.

**<u>Other Government Regulations</u>**

We are subject to various laws and regulations regarding laboratory practices, the experimental use of animals, and the use and disposal of hazardous or potentially hazardous substances in connection with our research. In each of these areas, as above, the government has broad regulatory and enforcement powers, including the ability to levy fines and civil penalties, suspend or delay issuance of approvals, seize or recall products, and withdraw approvals, any one or more of which could have a material adverse effect upon us.

***Market and Competition***

According to estimates for 2023 from the American Cancer Society, more than 1.9 million Americans are expected to be diagnosed with cancer in the year, and approximately 609,820 Americans are expected to die of cancer. Cancer is the second most common cause of death in the U.S., exceeded only by heart disease. In the United States, the relative lifetime risk of a male or female developing cancer is 1 in 2 and 1 in 3, respectively (Source: American Cancer Society's Cancer Facts & Figures 2023). It was projected that there will be 195,738 patients with HR+/HER2- mBc in 2021. (Source: *https://seer.cancer.gov/statfacts/html/breast-subtypes.html (accessed Feb 9, 2023)*

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The costs of this disease state are also significant. In the United States, the American Cancer Society reported in its Cancer Facts & Figures 2023 that The National Cancer Institute estimated that the 2020 cancer-related medical costs were $208.9 billion.

The biotechnology industry emphasizes the importance of proprietary rights and is typically defined by fast-paced advancements in technologies with intense competition. We do business in an extremely competitive oncology market and face significant competition from many sources, including pharmaceutical, biopharmaceutical, and biotechnology companies as well as universities and private and public research institutions. Many of our competitors have significantly greater financial, manufacturing, marketing, and drug development resources than we do. Large biopharmaceutical companies in particular have extensive experience in clinical development and in obtaining regulatory approvals for drugs and biologicals. These companies also have significantly greater research capabilities than we do. Smaller or early-stage companies may also prove to be significant competitors, particularly those with collaborative arrangements with large and established companies or universities and research institutions.

Our competitors fall primarily into the following groups of treatment:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• traditional cancer therapies, including chemotherapy, surgery, radiation therapy, and targeted therapies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• approved immunotherapy antibodies and immunotherapy antibodies in clinical trials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• other approved oncolytic virus-based immunotherapies and those in clinical trials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• cancer vaccines including personalized vaccines and those targeting tumor neo-antigens; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• cell-based therapies, such as CAR-T, T cell receptor-based, and NK cell therapies.

Our business opportunity will be limited, or possibility eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer side effects, or are less expensive alone or in combination with other therapies than pelareorep especially if these get to market sooner than our product. Our competitors also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient enrollment for clinical trials, as well as in acquiring technologies and technology licenses complementary to our programs or advantageous to our business.

Pelareorep, if and when sold, will compete with a number of drugs that are currently marketed or in development that also target cancer but utilize different mechanisms of action. To compete effectively with these agents, pelareorep will need to show improved clinical efficacy and/or safety compared to competing products. We believe that pelareorep, if and when ultimately marketed, will likely be used in combination with other existing cancer treatments like checkpoint blockade therapies, surgery, chemotherapy, radiation therapy and other biological therapies. Consequently, we believe pelareorep, if and when marketed, would largely complement rather than compete directly with these existing treatment options.

We do, however, expect to face direct and increasing competition from a number of companies that are also seeking to develop cancer therapies based on oncolytic viruses and other ways to prime the immune system. We believe that our ability to successfully compete will depend, among other things, on our ability to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• effectively advance the development of pelareorep;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• design, enroll patients in and successfully complete appropriate clinical trials in an efficient manner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• gain regulatory approval for pelareorep;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• establish collaborations and partnerships for the development of pelareorep;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• commercialize successfully, including demonstrating the safety and efficacy of pelareorep over currently approved therapies to physicians, insurers, and third-party payors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• secure sufficient coverage from insurers and other payors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• secure, maintain, and protect intellectual property rights based on our innovations; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• manufacture and sell commercial quantities of pelareorep to the market.

***Product Marketing Strategy***

The markets for the cancer product being developed by us may be large and could require substantial sales and marketing capability. Before or upon successful completion of the development of a cancer product, we intend to enter into one or more strategic partnerships or other collaborative arrangements with a pharmaceutical company or other company with marketing and distribution expertise to address this need. If necessary, we will establish arrangements with various partners for different geographical areas or specific applications at various times in the development process. Our management and consultants have relevant experience with the partnering process.

***Seasonality***

Our results of operations have not been materially impacted by seasonality.

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***Raw Materials***

We believe that sources of raw material pertinent for manufacturing our pelareorep product are generally available.

***Corporate Social Responsibility and ESG***

As a rapidly growing, clinical-stage biotech company, we are not yet in a position to implement a broad-based ESG policy and program. However, our corporate goals are inspired by our potential to impact the care of patients with cancer, especially those with late-stage breast cancer and are informed by our corporate values of acting with integrity, collaboration, innovation, and embracing diversity. In 2022, our corporate goals focused on certain clinical, manufacturing, and business operations and support our desire to obtain an approval for an innovative cancer treatment that extends patient lives. Each year we work hard to achieve our goals and objectives while maintaining a respectful, collaborative, and caring work environment.

While we do not formally report on our ESG policies and compliance, we publicly disclose elements of our ESG activities. Our governance policies like our board mandates, code of ethics and conduct, and our public filings are all on our website at https://ir.oncolyticsbiotech.com/corporate-governance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.Organizational Structure**

On December 31, 2022, we had one material wholly-owned operating subsidiary; Oncolytics Biotech (Barbados) Inc. ("OBB"), a Barbados company. In addition, Oncolytics Biotech (U.S.) Inc., a Delaware corporation, is a material wholly-owned subsidiary of OBB.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.&nbsp;&nbsp;&nbsp;&nbsp; Property, Plant and Equipment**

We currently lease our head office in Calgary, Alberta, Canada as well as our office spaces in San Diego, California, U.S. and Barbados. We do not own or lease any other office space, manufacturing facilities or equipment and do not have any current plans to construct or acquire any facilities.

**ITEM 4A. UNRESOLVED STAFF COMMENTS**

Not applicable.

**ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS**

Our Management Discussion and Analysis ("MD&A") contains forward-looking statements, including our belief as to the potential of pelareorep, a therapeutic reovirus, as a cancer therapeutic and our expectations as to the success of our research and development and manufacturing programs in 2023 and beyond, future financial position, business strategy and plans for future operations, and statements that are not historical facts, involve known and unknown risks and uncertainties, which could cause our actual results to differ materially from those in the forward-looking statements. See *"Cautionary Note Regarding Forward-Looking Statements"*.

With respect to the forward-looking statements made within our MD&A, we have made numerous assumptions regarding among other things: our ability to obtain financing to fund our development program, our ability to receive regulatory approval to commence enrollment in our clinical trial program, the final results of our co-therapy clinical trials, our ability to maintain our supply of pelareorep and future expense levels being within our current expectations. Investors are cautioned against placing undue reliance on forward-looking statements. We do not undertake to update these forward-looking statements except as required by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.Operating Results**

Please see our 2022 Management Discussion and Analysis in Exhibit 15.1, which is incorporated herein by reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.Liquidity and Capital Resources**

Please see our 2022 Management Discussion and Analysis in Exhibit 15.1, which is incorporated herein by reference.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.Research and Development, Patents and Licenses, etc.**

Please see the disclosure in "Item 4. Information on the Company B. Business Overview" and our 2022 Management Discussion and Analysis in Exhibit 15.1, which is incorporated herein by reference. for information on the Company's research and development policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.Trend Information**

It is important to note that historical patterns of expenditures cannot be taken as an indication of future expenditures. Our current and future expenditures are subject to numerous uncertainties, including the duration, timing, and costs of R&D activities ongoing during each period and the availability of funding from investors and prospective partners. As a result, the amount and timing of expenditures and, therefore, liquidity and capital resources may vary substantially from period to period. See our 2022 MD&A in Exhibit 15.1 for our comparative discussion on our expenditures between 2020 - 2022.

Except as disclosed elsewhere in our annual report, we know of no trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our liquidity or capital resources or that would cause reported financial information not necessarily to be indicative of future operating results or financial conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E.Critical Accounting Estimates**

Not Applicable.

**ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.Directors and Senior Management**

The following table sets forth the names and places of residence of all our directors and senior management as at December 31, 2022, as well as the positions and offices held by such persons and their principal occupations.

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|:---|:---|:---|:---|
| **Name and Place of Residence** | **Position with the Company** | **Principal Occupations** | **Director of the Company Since** |
| Deborah M. Brown, MBA, ICD.D<sup>(1)(2)</sup><br>Ontario, Canada | Director | Ms. Brown currently leads Canadian Strategic Partnerships at Eversana, a leading provider of global commercial services to the life sciences industry. She held progressively senior roles at EMD Serono from 2000 to 2014, including Executive Vice President of Neuroimmunology for the company's U.S. operations, and President and Managing Director of the company's Canadian operations. In 2012, Ms. Brown was Chair of the National Pharmaceutical Organization (now Innovative Medicines Canada) and served on its Board of Directors from 2007 to 2014. She also currently sits on the Boards of the HBSPCA and Sernova Corp. Ms. Brown holds an MBA from Western University's School of Business, an Hons B.Sc. from the University of Guelph, and has completed the Institute of Corporate Directors Designation (ICD.D). | November 2, 2017 |
| Matthew C. Coffey, PhD, MBA<br>Alberta, Canada | President and Chief Executive Officer and Director | A co-founder of the Company, Dr. Coffey completed his doctorate degree in oncology at the University of Calgary with a focus on the oncolytic capabilities of the reovirus. The results of his research have been published in various respected scientific journals, including Science, Human Gene Therapy, and The EMBO Journal. Dr. Coffey took over as Chief Executive Officer in late 2016, prior to which he was Chief Operating Officer since December 2008. Since co-founding Oncolytics he has also held the positions of Chief Scientific Officer from December 2004 to December 2008, Vice-President of Product Development from July 1999 to December 2004, and Chief Financial Officer from September 1999 to May 2000. | May 11, 2011 |

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| | | | |
|:---|:---|:---|:---|
| **Name and Place of Residence** | **Position with the Company** | **Principal Occupations** | **Director of the Company Since** |
| Andrew de Guttadauro<br>California, USA | Global Head of Business Development, President, Oncolytics Biotech (U.S.) Inc. | Mr. de Guttadauro began his career at TAP Pharmaceuticals, supporting the launch of blockbuster drugs, Lupron<sup>®</sup> and Prevacid<sup>®</sup>. He held a variety of marketing positions at Amgen, contributing to the success of Enbrel<sup>®</sup>, Aranesp<sup>®</sup>, and Epogen<sup>®</sup> before joining MedImmune to lead marketing efforts for the FluMist<sup>®</sup> inhaled influenza vaccine. Following a two-year assignment overseeing the commercial development of Zevalin<sup>®</sup>, the first radioimmunotherapy product approved for use in the United States, Mr. de Guttadauro took on the role of Senior Director of Strategy at Biogen Idec. He then served as Vice President of Corporate Development at Vical, supporting the execution of distribution agreements for Allovectin<sup>®</sup>. Prior to joining Oncolytics, Mr. de Guttadauro was a Principal at 1798 Consultants Inc., a healthcare consulting firm providing commercialization, market access, and compliance strategic advice to leading and emerging biopharmaceutical companies. Mr. de Guttadauro has a Bachelor of Science degree in engineering from the United States Military Academy at West Point. | N/A |
| Allison Hagerman, P.Eng., PMP, MBT <br>Alberta, Canada | Vice President, Product Development | A Professional Engineer focused on biotechnology, Ms. Hagerman joined Oncolytics in 2010. Prior to being appointed as Vice President of Product Development, Ms. Hagerman was the Director, Manufacturing and Engineering from 2013-2017 and Project Manager from 2010-2013. Ms. Hagerman is a Professional Engineer (P.Eng., APEGA) and Project Management Professional (PMP, PMI). She holds a Master of Biomedical Technology (MBT) degree from the University of Calgary, and B.Sc. degrees in both Chemical Engineering and Biological Sciences. | N/A |
| Thomas C. Heineman, MD, PhD<br>California, USA | Chief Medical Officer | Prior to joining Oncolytics, Dr. Heineman most recently served as Senior Vice President and Head of Clinical Development at Denovo Biopharma. Prior to his time at Denovo, Dr. Heineman served as Vice President and Head of Clinical Development at Genocea Biosciences and Halozyme Therapeutics, where he was also the Head of Translational Medicine, and oversaw clinical trials in indications such as breast and pancreatic cancer. Dr. Heineman's experience further extends to big pharma and academia where he previously held roles as Senior Director, Global Clinical Research and Development at GlaxoSmithKline and Associate Professor at the Saint Louis University School of Medicine. Dr. Heineman has co-authored over 60 peer-reviewed publications and is board certified in Internal Medicine and Infectious Diseases. He completed his fellowship in Infectious Diseases at the National Institutes of Health and his internship and residency at the University of Maryland. Dr. Heineman earned his MD at the University of Chicago, where he also received a PhD in molecular genetics. | N/A |
| Angela Holtham, MBA, FCPA, FCMA, ICD.D<sup>(1)(2)</sup><br>Ontario, Canada | Director | Ms. Holtham held a number of financial positions over a 19-year career with the Canadian subsidiary of Nabisco Inc., rising to become Senior Vice President and Chief Financial Officer. In 2002, she joined Toronto, Ontario-based Hospital for Sick Children as Vice President, Finance and Chief Financial Officer, a position she held for eight years. Through her career she has participated in myriad initiatives ranging from traditional finance functions and operations oversight to intellectual property portfolio management and mergers and acquisitions. In more recent years she has held numerous governance roles on various Boards in both the publicly traded and not-for-profit sectors and held short term contract positions. Ms. Holtham is an FCPA, FCMA, holds an MBA from the University of Toronto - Rotman School of Management and has completed the Institute of Corporate Directors Designation (ICD.D). | June 18, 2014 |

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| | | | |
|:---|:---|:---|:---|
| **Name and Place of Residence** | **Position with the Company** | **Principal Occupations** | **Director of the Company Since** |
| Kirk J. Look, CA, MSJ<br>Alberta, Canada | Chief Financial Officer | Mr. Look joined Oncolytics as the Company's Controller in April 2003, and assumed the role of Chief Financial Officer in November 2012. Prior to joining Oncolytics, from 2000 to April 2003, Mr. Look was Manager of Audit and Assurance Services with Ernst & Young LLP in Canada. From 1998 to the end of 1999, Mr. Look held the positions of Audit Manager and Senior Accountant at Ernst & Young LLP in Chile. Mr. Look is a Chartered Accountant, and holds a Master of Science in Jurisprudence (MSJ) from the Seton Hall University School of Law and a Bachelor of Commerce from the University of Calgary. | N/A |
| James T. Parsons, MAcc, CPA, CA<sup>(1)(3)</sup><br>Ontario, Canada | Director | Mr. Parsons served as the Chief Financial Officer (CFO) of Trillium Therapeutics Inc. (TSX: TRIL) (NASDAQ: TRIL) from August 2011 through its acquisition by Pfizer in November 2021 for an aggregate purchase price of approximately U.S.$2.2 billion. Prior to his time at Trillium, Mr. Parsons served as Vice President, Finance, at DiaMedica Therapeutics Inc, CFO of ProMIS Neurosciences (formerly Amorfix Life Sciences Ltd.), and CFO and Vice President, Finance and Administration, at Aptose Biosciences Inc. (formerly Lorus Therapeutics). Mr. Parsons has been a Director and the Chair of the Audit Committees of Sernova Corp. (TSX: SVA) and DiaMedica Therapeutics Inc. (NASDAQ: DMAC) since 2012 and 2015, respectively. | June 16, 2022 |
| Wayne Pisano, MBA<sup>(3)(5)</sup> Pennsylvania, USA | Chair of the Board | Mr. Pisano has served as a Director/Chairman of several publicly traded companies in the US and Canada and has more than 30 years of experience as a pharmaceutical industry executive. He served as the president and CEO of VaxInnate, a privately held biotech company from January 2012 to November 2016. Mr. Pisano is the former president and CEO of Sanofi Pasteur, one of the largest vaccine companies in the world. He joined Sanofi Pasteur in 1997, assuming increasing levels of responsibility. He was promoted to President and CEO in 2007, the position he successfully held until his retirement in 2011. Prior to joining Sanofi Pasteur, he spent 11 years with Novartis (formerly Sandoz). He has a bachelor's degree in biology from St. John Fisher College, New York and an MBA from the University of Dayton, Ohio. | May 9, 2013 |

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| | | | |
|:---|:---|:---|:---|
| **Name and Place of Residence** | **Position with the Company** | **Principal Occupations** | **Director of the Company Since** |
| Jonathan Rigby, MBA<sup>(3)</sup><br>Louisiana, USA | Director | Mr. Rigby is currently the Group Chief Executive Officer (CEO) of Revolo Biotherapeutics, where he leads a team focused on the development of therapies for autoimmune and allergic diseases. Previously, he was the CEO of SteadyMed Ltd., which he led through a NASDAQ listing and sale to United Therapeutics Corporation. Prior to his time at SteadyMed, Mr. Rigby co-founded Zogenix, Inc., a CNS-focused specialty pharmaceutical company that was acquired by UCB earlier this year in a transaction valued at up to approximately U.S. $1.9 billion. Before co-founding Zogenix, Mr. Rigby held roles of increasing responsibility in commercial and business development functions at large pharmaceutical companies such as Merck, Bristol Myers Squibb, and Profile Therapeutics (now Phillips Medical). In addition to his Oncolytics appointment, Mr. Rigby is also a member of the Revolo Biotherapeutics and ImmunoMolecular Therapeutics Boards of Directors and the Chairman of BioPlus Acquisition Corp., a Nasdaq-listed biotech acquisition company. He holds a B.S. with Honors in Biological Sciences from Sheffield University, UK, and an M.B.A. from Portsmouth University, UK. | August 30, 2022 |
| Bernd R. Seizinger, MD, PhD<sup>(2)(4)</sup><br>New Jersey, USA and Munich, Germany | Director | Dr. Seizinger has been board member/chairman in multiple public and private biotech companies in the US and Europe. From 1998 to 2009, he served as President and Chief Executive Officer of GPC Biotech. He also served as Vice President of Oncology Drug Discovery and, in parallel, Vice President of Corporate and Academic Alliances at Bristol-Myers Squibb. Prior to his appointments in the biotechnology and pharmaceuticals sectors, Dr. Seizinger held professorships and senior staff appointments at Harvard Medical School, Princeton University, and Massachusetts General Hospital. He also currently sits on multiple biotech boards, including four additional public boards: Aptose Biosciences, Aprea Therapeutics, Nykode Therapeutics, and BioInvent. | June 8, 2015 |

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**Notes:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Member of the Audit Committee. Ms. Holtham is Chair of this Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Member of the Compensation Committee. Ms. Brown is Chair of this Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Member of the Governance Committee. Mr. Pisano is Chair of this Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Member of the Science & Development Committee. Dr. Seizinger is Chair of this Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)Mr. Pisano, as Chair of the Board, serves as an ex-officio member of the Compensation, Audit, and Science & Development Committees.

As at February 27, 2023, the directors and senior management as a group beneficially owned, directly or indirectly, 847,866 of our common shares, representing 1.35% of the issued and outstanding common shares.

Certain of our directors are associated with other companies, which may give rise to conflicts of interest. In accordance with the Alberta Business Corporations Act **(**ABCA), directors who have a material interest in any person who is a party to a material contract or a proposed material contract with us are required, subject to certain exceptions, to disclose that interest and abstain from voting on any resolution to approve that contract. In addition, the directors are required to act honestly and in good faith with a view to the best interests of Oncolytics Biotech Inc.

None of our directors or officers are related by blood, marriage, or adoption to any other director or officer.

We are not aware of any arrangement or understanding with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a director or senior management.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B. Compensation**

***Board of Directors***

The following table sets forth information concerning the total compensation paid in 2022 to each director.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name** | **Fees Earned**<br>**($)**<sup>(1)</sup> | **Share-**<br>**based awards**<br>**($)**<sup>(2)</sup> | **Option-**<br>**based awards**<br>**($)**<sup>(2)</sup> | **Non-equity incentive plan compensation<br>($)** | **Pension value<br>($)** | **All other compensation<br>($)** | **Total<br>($)** |
| Deborah Brown | 88036 | Nil | 22848 | Nil | Nil | Nil | 110884 |
| Angela Holtham | 88036 | Nil | 22848 | Nil | Nil | Nil | 110884 |
| Leonard Kruimer<sup>(3)</sup> | 37246 | Nil | Nil | Nil | Nil | Nil | 37246 |
| James T. Parsons<sup>(4)</sup> | 38375 | Nil | 34272 | Nil | Nil | Nil | 72647 |
| Wayne Pisano | 121896 | Nil | 28560 | Nil | Nil | Nil | 150456 |
| Jonathan Rigby<sup>(5)</sup> | 19752 | Nil | 52483 | Nil | Nil | Nil | 72235 |
| Bernd R. Seizinger | 81264 | Nil | 22848 | Nil | Nil | Nil | 104112 |

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**Notes:**

&nbsp;&nbsp;&nbsp;&nbsp;(1)Directors are paid fees in U.S. Dollars. These amounts are presented in Canadian dollars and have been converted at a U.S./CDN exchange rate of $1.3544.

&nbsp;&nbsp;&nbsp;&nbsp;(2)The value of share-based and option based awards are based on the grant date assumptions as disclosed in note 10 "*Share-Based Compensation"* in our 2022 audited consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;(3)Mr. Kruimer ceased to be a director effective June 16, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;(4)Mr. Parsons was appointed as a director on June 16, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;(5)Mr. Rigby was appointed as a director on August 30, 2022.

Each director who is not a salaried employee of the Company receives a base retainer of US$40,000. In addition to the base retainer, directors are eligible to receive the following additional fees depending on committee involvement:

Additional Retainers (USD):

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| | |
|:---|:---|
| Board chair | $40000 |
| Audit Committee chair | $20000 |
| Governance & Compensation Committee chair | $10000 |
| Science & Development Committee chair | $15000 |
| Non-chair member of the Audit Committee | $10000 |
| Non-chair member of the Governance, Compensation, or Science & Development Committee | $5000 |

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In addition to the combined retainer, the Corporation will grant 30,000 options annually for directors other than the Chair. The Chair will receive 37,500 options annually. All such options vest in their entirety one year following the grant date. New Directors will be entitled to receive an initial grant of 45,000 options, which vest immediately.

We also reimburse the directors for any reasonable expenses incurred by them while acting in their directors' capacity. During the year ended December 31, 2022, total compensation of $658,464 was paid to the independent directors which consisted of fee payments of $474,605 and option based awards of $183,859.

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***Senior Management***

The following table sets forth information concerning the total compensation paid to our senior management in 2022.

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name and principal position** | **Salary<br>($)** | **Share-<br>based awards<br>($)**<sup>(1)</sup> | **Option-<br>based** <br>**awards** <br>&nbsp;&nbsp;&nbsp;&nbsp;**($)**<sup>(1)</sup> | **Bonus<br>($)** | **Non-equity incentive<br>plan compensation<br>($)** | **Pension value<br>($)** | **All other compensation<br> ($)**<sup>(2)</sup> | **Total<br>compensation <br>($)** |
| Dr. Matthew C. Coffey<sup>(3)</sup><br>President and Chief Executive Officer | 654404 | Nil | 136616 | 310842 | Nil | Nil | 83198 | 1185060 |
| Kirk J. Look<br>Chief Financial Officer | 486593 | Nil | 109293 | 184905 | Nil | Nil | 69354 | 850145 |
| Dr. Thomas C. Heineman<sup>(4)</sup><br>Chief Medical Officer | 599999 | Nil | 109293 | 228000 | Nil | Nil | 44679 | 981971 |
| Andrew de Guttadauro<sup>(4)</sup><br>President, Oncolytics Biotech (U.S.) Inc. | 454829 | Nil | 109293 | 151231 | Nil | Nil | 28679 | 744032 |
| Allison Hagerman<br>Vice President, Product Development | 390774 | Nil | 109293 | 129932 | Nil | Nil | 61449 | 691448 |

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**Notes:**

&nbsp;&nbsp;&nbsp;&nbsp;(1)The value of share- and option-based awards are based on the grant date assumptions as disclosed in note 10 "*Share-Based Compensation"* in our 2022 audited consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;(2)The dollar amounts set forth under this column are related to contributions to the senior management's respective retirement savings plan and amounts provided for health care benefits by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;(3)None of the compensation paid to Dr. Coffey related to his role as a director of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;(4)U.S. Employees are paid salaries, bonuses, and other compensation in U.S. Dollars. These amounts are presented in Canadian dollars and have been converted at a U.S./CDN exchange rate of $1.3544.

We have entered into employment agreements with each member of the Company's senior management (each an "Employment Agreement"). For 2022, the Chief Executive Officer of the Corporation is eligible for a cash bonus of up to 50% of his base salary, the Chief Financial Officer and Chief Medical Officer are eligible for a cash bonus of up to 40% of their respective base salary, and the President, Oncolytics Biotech (U.S.) Inc. and Vice President, Product Development are eligible for a cash bonus of up to 35% of their respective base salary. In addition, when available, the officers are eligible for a combination of Option and Share Award grants. The amount of each grant is determined and approved by the Board with the actual bonus provided and the number of Options and Share Awards granted based upon the overall performance of the Corporation as assessed by the Compensation Committee and approved by the Board. The overall performance of the Corporation is determined by the annual goals and objectives approved by the Board and includes specific objectives with respect to the clinical, manufacturing, and intellectual property plans in combination with financial goals. Previous grants are taken into account when considering new grants of Options and Share Awards. As well, the Employment Agreements provide that each member of the Company's senior management is subject to certain confidentiality and non-competition restrictions during and following the course of their respective employment with the Company. Each Employment Agreement shall continue until terminated by either party in accordance with the notice provisions thereof.

The Company does not provide pension plan benefits to its senior management and employees. The Company does not currently have a stock appreciation rights plan.

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The following base salaries for 2023 were approved by the Board of Directors:

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| | | |
|:---|:---|:---|
| **Name and principal position** | **Year** | **Salary<br>($)** |
| Dr. Matthew C. Coffey<br>President and Chief Executive Officer | 2023 | 687124 |
| Kirk J. Look<br>Chief Financial Officer | 2023 | 510923 |
| Dr. Thomas C. Heineman<sup>(1)</sup><br>Chief Medical Officer | 2023 | 465150 |
| Andrew de Guttadauro<sup>(1)</sup><br>President, Oncolytics Biotech (U.S.) Inc. | 2023 | 352607 |
| Allison Hagerman<br>Vice President, Product Development | 2023 | 410313 |

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**Note:** 

&nbsp;&nbsp;&nbsp;&nbsp;(1)U.S. Employees are paid in U.S. Dollars and salaries above for those U.S. employees are presented in U.S. dollars. All other employees are paid in Canadian Dollars and salaries above for those Canadian employees are presented in Canadian dollars.

***Termination of Employment or Change of Control***

The following table reflects amounts payable to each member of the Company's senior management based on their respective Employment Agreements assuming that their employment was terminated on December 31, 2022 without cause or due to a change of control of the Company.

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| | | |
|:---|:---|:---|
| **Name and principal position** | **Termination without Cause Severance**<sup>(1)</sup><br>**($)** | **Change of Control Severance**<sup>(2)</sup><br>**($)** |
| Dr. Matthew C. Coffey<br>President and Chief Executive Officer | 737602 | 1475205 |
| Kirk J. Look<br>Chief Financial Officer | 555947 | 1111894 |
| Dr. Thomas C. Heineman<sup>(3)</sup><br>Chief Medical Officer | 158663 | 475988 |
| Andrew de Guttadauro<sup>(3)</sup><br>President, Oncolytics Biotech (U.S.) Inc. | 178496 | 713982 |
| Allison Hagerman<br>Vice President, Product Development | 226111 | 452223 |

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**Notes:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)As at December 31, 2022, all options granted to senior management had fully vested except for the options granted on August 1, 2020 (expiring August 1, 2025), March 8, 2021 (expiring March 8, 2026), December 10, 2021 (expiring December 10, 2025), and December 9, 2022 (expiring December 9, 2026). As a result, all members of senior management shall be entitled to exercise all or any part of their vested Options, within the period ending on the earlier of the date of expiration of the Option and the 90th day after the date such member is terminated unless otherwise approved by the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)On a change of control of the Company, senior management shall be entitled to exercise all or a part of their Options, whether vested or not, within the period ending on the earlier of the date of expiration of the Option and the 90th day after the date such member is terminated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)U.S. Employees are paid in U.S. Dollars and are presented in U.S. dollars.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.Board Practices**

Our Board of Directors are elected by the shareholders at each Annual General Meeting (or Annual Special Meeting) and typically hold office until the next meeting, at which time they may be re-elected or replaced. Casual vacancies on the board are filled by the remaining directors and the persons filling those vacancies hold office until the next Annual General Meeting (or Annual Special Meeting), at which time they may be re-elected or replaced. The officers are appointed by the Board of Directors and hold office indefinitely at the pleasure of the Board of Directors.

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| | | | |
|:---|:---|:---|:---|
| **Name and Place of Residence** | **Position with the Corporation** | **Director of the Corporation Since** | **Date of Expiration of Current Term of Office** |
| Matthew C. Coffey, PhD, MBA<br>Alberta, Canada | President and Chief Executive Officer and Director | May 11, 2011 | Date of 2023 Annual General Meeting of the Shareholders |
| Deborah Brown, MBA, ICD.D<br>Ontario, Canada | Director | November 2, 2017 | Date of 2023 Annual General Meeting of the Shareholders |
| Angela Holtham, MBA, FCPA, FCMA, ICD.D<br>Ontario, Canada | Director | June 18, 2014 | Date of 2023 Annual General Meeting of the Shareholders |
| James T. Parsons, MAcc, CPA, CA<br>Ontario, Canada | Director | June 16, 2022 | Date of 2023 Annual General Meeting of the Shareholders |
| Wayne Pisano, MBA<br>Pennsylvania, USA | Chair and Director | May 9, 2013 | Date of 2023 Annual General Meeting of the Shareholders |
| Jonathan Rigby, MBA<br>Louisiana, USA | Director | August 30, 2022 | Date of 2023 Annual General Meeting of the Shareholders |
| Bernd R. Seizinger, MD, PhD<br>New Jersey, USA and Munich Germany | Director | June 8, 2015 | Date of 2023 Annual General Meeting of the Shareholders |

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***Directors' Contracts***

We receive a director's consent from each of the independent directors upon their acceptance of their director's position. We also enter into an Indemnity Agreement and Directors Confidentiality and Intellectual Property Assignment Agreement with each director.

The Company does not have any contracts with any of its directors which provide for benefits upon the termination of employment.

***Compensation Committee***

The Corporation has formed a compensation committee (the "**Compensation Committee**") in accordance with Rule 5605(d)(1) of the Nasdaq Capital Market which consists of four outside, independent directors, Dr. Seizinger, Ms. Holtham, Ms. Brown, and Mr. Pisano, the Chair of the Board, each of whom is independent in accordance with Rule 5605(a)(2) and Rule 5605(d)(2)(A) of the Nasdaq Capital Market. Ms. Brown is the Chair of the Compensation Committee. No member of the Compensation Committee has been an employee or officer of the Company or any of its affiliates.

The objectives of the Corporation's compensation arrangements are: (i) to attract and retain key personnel; (ii) to encourage commitment to the Corporation and its goals; (iii) to align executive interests with those of its shareholders; and (iv) to reward executives for performance in relation to overall corporate progress goals.

The key elements of the compensation program are the base salary, health benefits, and payments allocated to employees to be directed by them to their personal retirement accounts. Bonuses and the granting of Options (as defined herein) and Share Awards (as defined herein) are also part of the Corporation's compensation program and are based on corporate performance. Part of corporate performance includes goals and objectives that are determined based on the strategic planning and budgeting process, which is conducted at least annually. The elements of the compensation plan are intended to reward performance, and the various elements are intended to provide a blend of short-term and long-term incentives to align the interests of management and the shareholders.

In arriving at its recommendations for compensation, the Compensation Committee considers the long-term interests of the Corporation as well as its current stage of development and the economic environment within which it operates. The market for biotechnology companies in the development phase is challenging. Based on these factors, the Compensation Committee recognized the need to strike a balance between compensation to retain employees and resources expended to maintain operations. In the past, the Compensation Committee has engaged specialist consultants to assist in benchmarking its

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compensation practices and provide recommendations to the committee with respect to compensation for directors and senior management. The Compensation Committee had retained Radford, an Aon Hewitt Corporation, as a specialist consultant to assist with the benchmarking of officer and director compensation for 2023.

Following a review of the risks in the Corporation's compensation policies and practices, the Compensation Committee found no risks that are reasonably likely to have a material adverse effect on the Corporation. The Compensation Committee's role of approving the compensation policies and practices includes considering whether the compensation policies and practices could encourage senior management of the Company to take inappropriate or excessive risks.

Under the Corporation's corporate trading policy, insiders (including senior management and directors) are not permitted to hedge their position in Common Shares, Options, Share Awards, deferred share units, performance share units, debentures or other debt instruments by use of any financial instrument, which would include but is not limited to options, puts, calls, warrants or short sells, designed to benefit the holder from a change in the market value of the Common Shares of the Corporation.

The Compensation Committee's written mandate is located on the Company's website at https://ir.oncolyticsbiotech.com/corporate-governance.

***Audit Committee*** 

The Corporation has formed an Audit Committee in accordance with Section 3(a)(58)(A) of the United States Securities Exchange Act of 1934, as amended ("Exchange Act"), consisting of four independent directors pursuant to the Rule 5605(a)(2) and Rule 5605(c)(2) of the Nasdaq Capital Market and Rule 10A-3 of the Exchange Act: Ms. Brown, Ms. Holtham, Mr. Parsons, and Mr. Pisano, none of whom are nor have been employees or officers of the Company or any of its affiliates. Ms. Holtham is presently the Chair of the Audit Committee. Each Audit Committee member is financially literate.

Our audit committee reviews and approves the scope of the annual audits of our financial statements, reviews our internal control over financial reporting, reviews and approves services performed by the independent auditors, reviews the findings and recommendations of the independent auditors, and periodically reviews major accounting policies.

The Audit Committee's written mandate is located on the Company's website at https://ir.oncolyticsbiotech.com/corporate-governance.

&nbsp;&nbsp;&nbsp;&nbsp;**D.Employees**

The following table sets out the number of our employees at the end of each of the last three fiscal years by activity and geographic location.

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| | | | |
|:---|:---|:---|:---|
| **By Function:** | **2022** | **2021** | **2020** |
| Research and development | 17 | 15 | 14 |
| General and administrative | 12 | 11 | 11 |
| Total | 29 | 26 | 25 |

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| | | | |
|:---|:---|:---|:---|
| **By Geographic Location:** | **2022** | **2021** | **2020** |
| Canada | 15 | 15 | 15 |
| United States of America | 9 | 7 | 6 |
| Other | 5 | 4 | 4 |
| Total | 29 | 26 | 25 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E.Share Ownership**

The following table sets out the share ownership and options held of our directors and officers as of February 27, 2023.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Common shares<br>(#)** | **% of <br>ownership**<sup>(1)</sup> | **Option outstanding**<sup>(2)</sup><br>**(#)** | **Option exercise<br>price<br>($)** | **Option expiration date** | **% of outstanding**<sup>(3)</sup> |
| **Officers** | | | | | | |
| Dr. Matthew C. Coffey | 96333 | \*\* | 25263 | 16.53 | 12/11/2023 |  |
|  |  |  | 77263 | 3.99 | 12/1/2025 |  |
|  |  |  | 42105 | 2.66 | 1/16/2027 |  |
|  |  |  | 150000 | 3.44 | 11/19/2023 |  |
|  |  |  | 175000 | 1.45 | 12/13/2023 |  |
|  |  |  | 300000 | 3.17 | 12/11/2024 |  |
|  |  |  | 420000 | 3.40 | 3/8/2026 |  |
|  |  |  | 65000 | 2.08 | 12/10/2025 |  |
|  |  |  | 100000 | 2.31 | 12/9/2026 |  |
|  |  |  | 1354631 |  |  | 2.11% |
| Kirk J. Look | 45028 | \*\* | 16842 | 16.53 | 12/11/2023 |  |
|  |  |  | 48842 | 3.99 | 12/1/2025 |  |
|  |  |  | 31578 | 2.66 | 1/16/2027 |  |
|  |  |  | 53000 | 3.44 | 11/19/2023 |  |
|  |  |  | 125000 | 1.45 | 12/13/2023 |  |
|  |  |  | 250000 | 3.17 | 12/11/2024 |  |
|  |  |  | 155000 | 3.40 | 3/8/2026 |  |
|  |  |  | 55000 | 2.08 | 12/10/2025 |  |
|  |  |  | 80000 | 2.31 | 12/9/2026 |  |
|  |  |  | 815262 |  |  | 1.25% |
| Dr. Thomas Heineman | 11000 | \*\* | 70000 | 2.84 | 8/1/2025 |  |
|  |  |  | 100000 | 3.17 | 12/11/2024 |  |
|  |  |  | 120000 | 3.40 | 3/8/2026 |  |
|  |  |  | 55000 | 2.08 | 12/10/2025 |  |
|  |  |  | 80000 | 2.31 | 12/9/2026 |  |
|  |  |  | 425000 |  |  | \*\* |
| Andrew de Guttadauro | 10315 | \*\* | 13157 | 4.94 | 7/3/2027 |  |
|  |  |  | 30000 | 2.73 | 12/14/2023 |  |
|  |  |  | 100000 | 1.45 | 12/13/2023 |  |
|  |  |  | 200000 | 3.17 | 12/11/2024 |  |
|  |  |  | 85000 | 3.40 | 3/8/2026 |  |
|  |  |  | 55000 | 2.08 | 12/10/2025 |  |
|  |  |  | 80000 | 2.31 | 12/9/2026 |  |
|  |  |  | 563157 |  |  | \*\* |
| Allison Hagerman | 4200 | \*\* | 2105 | 16.53 | 12/11/2023 |  |
|  |  |  | 2421 | 6.84 | 12/11/2024 |  |
|  |  |  | 5263 | 3.90 | 12/9/2025 |  |
|  |  |  | 7894 | 2.66 | 12/28/2026 |  |

---

------

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Common shares<br>(#)** | **% of <br>ownership**<sup>(1)</sup> | **Option outstanding**<sup>(2)</sup><br>**(#)** | **Option exercise<br>price<br>($)** | **Option expiration date** | **% of outstanding**<sup>(3)</sup> |
| | | | 30000 | | | |
| | | | 80000 | | | |
| | | | 200000 | | | |
| | | | 45000 | | | |
| | | | 55000 | | | |
| | | | 80000 | 2.73<br>1.45<br>3.17<br>3.40<br>2.08<br>2.31 | 12/14/2023<br>12/13/2023<br>12/11/2024<br>3/8/2026<br>12/10/2025<br>12/9/2026 | |
| | | | 507683 | | | \*\* |
| **Directors** |  |  |  |  |  |  |
| Deborah Brown | 48948 | \*\* | 5263 | 5.42 | 11/7/2027 |  |
|  |  |  | 30000 | 3.40 | 3/8/2026 |  |
|  |  |  | 30000 | 1.14 | 6/16/2026 |  |
|  |  |  | 65263 |  |  | \*\* |
| Angela Holtham | 127238 | \*\* | 5263 | 13.87 | 6/18/2024 |  |
|  |  |  | 30000 | 3.40 | 3/8/2026 |  |
|  |  |  | 30000 | 1.14 | 6/16/2026 |  |
|  |  |  | 65263 |  |  | \*\* |
| James T. Parsons<sup>(4)</sup> |  | \*\* | 45000 | 1.14 | 6/16/2026 |  |
|  |  |  | 45000 |  |  | \*\* |
| Wayne Pisano | 189941 | \*\* | 5263 | 27.46 | 5/9/2023 |  |
|  |  |  | 3157 | 16.53 | 12/11/2023 |  |
|  |  |  | 37500 | 3.40 | 3/8/2026 |  |
|  |  |  | 37500 | 1.14 | 6/16/2026 |  |
|  |  |  | 83420 |  |  | \*\* |
| Jonathan Rigby<sup>(5)</sup> |  | \*\* | 45000 | 1.84 | 8/30/2026 |  |
|  |  |  | 45000 |  |  | \*\* |
| Bernd R. Seizinger | 314863 | \*\* | 5263 | 7.60 | 6/8/2025 |  |
|  |  |  | 30000 | 3.40 | 3/8/2026 |  |
|  |  |  | 30000 | 1.14 | 6/16/2026 |  |
|  |  |  | 65263 |  |  | \*\* |
| TOTAL: | 847866 |  | 4034942 |  |  |  |

---

\*\* Less than 1% ownership

**Notes:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Based on 62,826,958 common shares issued and outstanding on February 27, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Options granted to acquire common shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Ownership percentage assumes aggregate beneficial ownership of common shares, common shares acquirable upon exercise of options and fully diluted shares outstanding of 68,854,178.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Mr. Parsons was appointed as a director on June 16, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)Mr. Rigby was appointed as a director on August 30, 2022.

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***Equity Compensation Plan Information***

We currently have two share-based compensation plans: the Stock Option Plan and the Share Award Plan.

**Stock Option Plan**

The following is a summary of the Corporation's Amended and Restated Stock Option Plan (the "**Stock Option Plan**") dated effective as of May 4, 2017.

The Corporation, with the approval of its Shareholders, has established the Stock Option Plan. The number of Common Shares reserved for issuance under the Stock Option Plan and all other security based compensation arrangements of the Corporation (including the Share Award Plan) in aggregate shall not exceed 10% of the total number of issued and outstanding Common Shares from time to time.

Under the Stock Option Plan, the Board of Directors or the Compensation Committee may from time to time designate directors, officers, employees of, or consultants to, the Corporation or any subsidiary of the Corporation (such persons being "**Eligible Persons**") to whom Options may be granted and the number of Options to be granted to each.

Options may be exercised at a price (the "**Exercise Price**") which shall be fixed by the Board at the time the Option is granted. No Option can be granted with an Exercise Price at a discount to the market, which shall be the closing price of the Common Shares on the stock exchange upon which the Common Shares are listed on the first day preceding the date of grant on which at least one board lot of Common Shares traded on such exchange.

If any Option shall be exercised or shall expire or terminate for any reason without having been exercised in full, any Common Shares to which such Option relates shall be available for the purposes of the granting of Options under the Stock Option Plan.

The number of Shares that may be acquired under an Option granted to a participant under the Stock Option Plan 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 the Stock Option Plan or any other security based compensation arrangement of the Corporation, shall not exceed five percent (5%) of the total number of issued and outstanding Common Shares (calculated on a non-diluted basis).

Without obtaining the approval of Shareholders in accordance with the rules of the TSX or the requirements of any other stock exchange on which the Common Shares are then listed, no Options shall be granted pursuant to the Stock Option Plan, if such grant together with grants pursuant to all other share compensation arrangements of the Corporation, could result, at any time, in:

(i)&nbsp;&nbsp;&nbsp;&nbsp;a number of Common Shares issuable pursuant to Options granted to insiders exceeding ten percent (10%) of the number of outstanding Common Shares at any time;

(ii)&nbsp;&nbsp;&nbsp;&nbsp;the issuance within a one year period to insiders, of a number of Common Shares exceeding ten percent (10%) of the number of outstanding Common Shares; or

(iii)&nbsp;&nbsp;&nbsp;&nbsp;the issuance to any one insider and such insider's associates, within a one year period, of a number of Common Shares exceeding five percent (5%) of the number of outstanding Common Shares.

The value of Option grants to each non-employee director shall not exceed $150,000 annually for any individual non-employee director (other than initial Option grants to new directors).

The expiration of options is to be no greater than ten years from the date of grant and typically either vest immediately or as to one-third on each of the first, second and third anniversary following the date of grant, as determined by the Board at the time the Option is granted. Options are not transferable or assignable except to the person or persons to whom the participant's rights pass by the participant's will or applicable law following the death or permanent disability of a participant. The Stock Option Plan provides that if the expiration date of an Option occurs during a "blackout period" or within five (5) business days after a blackout period, such expiration date shall be deemed to be extended to the date which is the tenth (10<sup>th</sup>) business day after the last day of the applicable blackout period.

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 applicable option period and the ninetieth (90<sup>th</sup>) 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 Options shall be terminated and all rights to receive Common Shares thereunder shall be forfeited by such participant, and the participant shall not be entitled to receive any Common Shares or other compensation in lieu thereof.

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 applicable option 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: (i) by the person or persons to whom the participant's rights under the Option shall pass by the participant's will or applicable law; (ii) to the extent that he or she was entitled to exercise the Option as at the date of the participant's death or permanent disability.

Notwithstanding the foregoing, the Board may, at its sole discretion, extend the period during which any Options may be exercised, in the case of Options held by non-employee directors, by not more than one year, and in the case of Options held by other persons, by not more than three years, but in no case longer than the normal expiry of the Options.

In the event of a change of control of the Corporation (as such term is defined in the Stock Option Plan), 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 the Stock Option Plan for a period of time ending on the earlier of the expiry time of the Option and the ninetieth (90<sup>th</sup>) day following the change of control.

Subject to any required approval of the TSX and any other stock exchange on which the Common Shares are then listed, the Stock Option Plan and any Options granted thereunder may be amended, modified or terminated by the Board without approval of any participant or Shareholder (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). Such changes may include, without limitation:

(i)&nbsp;&nbsp;&nbsp;&nbsp;amending, modifying or terminating the Stock Option Plan with respect to all Common Shares in respect of Options which have not yet been granted thereunder;

(ii)&nbsp;&nbsp;&nbsp;&nbsp;making any amendment of a "housekeeping nature";

(iii)&nbsp;&nbsp;&nbsp;&nbsp;changing the provisions relating to the manner of exercise of Options;

(iv)&nbsp;&nbsp;&nbsp;&nbsp;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)&nbsp;&nbsp;&nbsp;&nbsp;adding a cashless exercise feature, payable in cash or securities, whether or not providing for a full deduction of the number of underlying Common Shares from the Stock Option Plan reserve; and

(vi)&nbsp;&nbsp;&nbsp;&nbsp;making any addition to, deletion from or alteration of the provisions of the Stock Option Plan or any Option that are necessary to comply with applicable law, the rules of the TSX, 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 the Stock Option Plan.

Notwithstanding the foregoing, Shareholder approval is required for any change to the Stock Option Plan or Options granted under it which:

(i)&nbsp;&nbsp;&nbsp;&nbsp;increases the number of Common Shares reserved for issuance under the Stock Option Plan;

(ii)&nbsp;&nbsp;&nbsp;&nbsp;extends eligibility to participate in the Stock Option Plan to persons other than Eligible Persons;

(iii)&nbsp;&nbsp;&nbsp;&nbsp;permits Options to be transferred, other than for normal estate settlement purposes or to an RRSP or similar plan;

(iv)&nbsp;&nbsp;&nbsp;&nbsp;permits awards other than Options to be made under the Stock Option Plan;

(v)&nbsp;&nbsp;&nbsp;&nbsp;extends the term of an Option beyond the maximum expiry date set out in the Stock Option Plan (except where an expiry date would have fallen within a blackout period;

(vi)&nbsp;&nbsp;&nbsp;&nbsp;reduces 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 a lower exercise price will be considered an amendment to reduce the exercise price of an Option);

(vi)&nbsp;&nbsp;&nbsp;&nbsp;changes the insider participation limitation at any time under the Stock Option Plan; or

(vii)&nbsp;&nbsp;&nbsp;&nbsp;amends the amending provision of the Stock Option Plan.

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**Share Award Plan**

The following is a summary of the Corporation's Amended and Restated Incentive Share Award Plan (the "**Share Award Plan**") dated effective as of May 4, 2017.

The Corporation, with the approval of its Shareholders, has established the Share Award Plan. Under the Share Award Plan, the Board may, at such times and in such amounts as the Board may deem advisable in its sole and absolute discretion, issue Performance Share Awards ("**PSAs**") to eligible employees, including officers, and Restricted Share Awards ("**RSAs**" and, together with PSAs, "**Share Awards**") to Eligible Persons. The number of Common Shares reserved for issuance under the Share Award Plan and all other security based compensation arrangements of the Corporation (including the Stock Option Plan) in aggregate shall not exceed 10% of the total number of issued and outstanding Common Shares from time to time.

Subject to earlier vesting in accordance with the terms of the Share Award Plan and unless otherwise determined by the Board, Share Awards granted under the Share Award Plan vest on the third anniversary date of the date of grant. Upon vesting, each RSA is deemed to be redeemed for no further consideration for one Common Share (subject to adjustment for dividend equivalents) and each PSA is deemed to be redeemed for no further consideration for one Common Share (subject to adjustment for dividend equivalents) multiplied by the percentage ("**Vesting Percentage**") of outstanding PSAs that will vest based upon the relative achievement of any performance-related measures or criteria as determined by the Board in its sole discretion, which may include the Corporation's performance compared to identified operational or financial targets and the Corporation's shareholder return.

The aggregate number of Common Shares issuable at any time to insiders, under all security based compensation arrangements of the Corporation shall not exceed 10% of the issued and outstanding Common Shares (calculated on a non-diluted basis). The aggregate number of Common Shares issued pursuant to all security based compensation arrangements of the Corporation, within a one year period, shall not exceed 10% of the issued and outstanding Common Shares (calculated on a non-diluted basis). The Share Award Plan further provides that the aggregate number of Common Shares reserved for issuance to any one participant under all security based compensation arrangements of the Corporation, shall not exceed 5% of the total number of issued and outstanding Common Shares (calculated on a non-diluted basis).

The maximum number of Common Shares that may be reserved for issuance to non-employee directors pursuant to RSAs under the Share Award Plan is 1% of the Common Shares outstanding at the time of the grant (on a non-diluted basis), less the aggregate number of Common Shares reserved for issuance to such non-employee director under any other security based compensation arrangement, and the total annual grant of RSAs to any one non-employee director cannot exceed a grant value of $150,000 (less the amount awarded to such non-employee director).

The Share Award Plan provides that if the issue date of any Share Award occurs during a blackout period, then the issue date for such Share Award shall not occur until the date which is the tenth (10<sup>th</sup>) business day after the last day of the such blackout period.

Unless otherwise determined by the Board in its sole discretion, upon a Change of Control (as such term is defined in the Share Award Plan), all unvested Share Awards shall become automatically vested (in the case of PSAs, with a deemed Vesting Percentage of 100). Common 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 the Share Award Plan.

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 participant's role as an Eligible Person if a participant ceases to be an Eligible Person as a result of the termination of such participant for cause or 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, all outstanding Share Awards Agreements under which Share Awards have been granted to such participant shall be terminated. Upon the death, permanent disability or retirement of a participant (other than the early retirement of an eligible employees), all outstanding Share Awards shall immediately vest. If a participant ceases to be an Eligible Person other than in the circumstances provided above, all Share Awards awarded to such participant under any outstanding Share Awards shall fully vest effective as of the date of cessation of employment (the "**Cessation Date**"), unless otherwise determined by the Board, and the participant shall be entitled to receive the number of Common 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 date of grant thereof to the Cessation Date; and (B) the denominator of which is the total number of days during which such Share Award were scheduled to vest upon grant. In such circumstances, the Vesting Percentage in respect of PSAs shall be determined as of the Cessation Date.

------

The Share Award Plan and any Share Awards granted thereunder may be amended, modified or terminated by the Board without approval of Shareholders, subject to any required approval of the TSX. Such changes may include, without limitation:

(i)&nbsp;&nbsp;&nbsp;&nbsp;amending, modifying or terminating the Share Award Plan with respect to all Common Shares in respect of Share Awards which have not yet been granted thereunder;

(ii)&nbsp;&nbsp;&nbsp;&nbsp;making any amendment of a "housekeeping nature"; and

(iii)&nbsp;&nbsp;&nbsp;&nbsp;making 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 rules of the TSX, or the requirements of any other stock exchange on which the Common Shares are then listed and to avoid unanticipated consequences deemed by the Board to be inconsistent with the purpose of this Plan.

Notwithstanding the foregoing, the Share Award Plan or a Share Award may not be amended without shareholder approval to:

(iv)&nbsp;&nbsp;&nbsp;&nbsp;increase the number of Common Shares issuable pursuant to outstanding Share Awards at any time;

(v)&nbsp;&nbsp;&nbsp;&nbsp;change the insider participation limit under the Share Award Plan;

(vi)&nbsp;&nbsp;&nbsp;&nbsp;expand the categories of individuals who are "eligible employees" who are eligible to participate in the Share Award Plan;

(vii)&nbsp;&nbsp;&nbsp;&nbsp;extend the term of any Share Award beyond the term of such awards provided for under the terms and conditions of the Share Award Plan;

(viii)&nbsp;&nbsp;&nbsp;&nbsp;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

(ix)&nbsp;&nbsp;&nbsp;&nbsp;change the amendment provisions of the Share Award Plan.

In addition, no amendment to the Share Award Plan or any Share Awards granted pursuant thereto may be made without the consent of an Share Award Plan participant if it adversely alters or impairs the rights of such participant in respect of any Share Award previously granted to such participant under the Share Award Plan.

**ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.Major Shareholders**

To the knowledge of our directors and senior officers, as at March 3, 2023, we are not aware of any shareholder who beneficially owns, directly or indirectly, or exercises control or direction over, our common shares carrying more than 5% of the voting rights.

***Shares Held in the United States***

The following table indicates, as of February 24, 2023, the total number of common shares issued and outstanding, the approximate total number of holders of record of common shares, the number of holders of record of common shares with U.S. addresses, the portion of the outstanding common shares held by U.S. holders of record, and the percentage of common shares held by U.S. holders of record. This table does not indicate beneficial ownership of common shares.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Total number of holders of record** | **Total number of common shares issued and outstanding** | **Number of U.S. holders of record** | **Number of common shares held by U.S. holders of record** | **Percentage of common shares held by U.S. holders of record** |
| 195 | 62826958 | 59 | 54495601 | 86.74% |

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***Change of Control***

As of March 3, 2023, there were no arrangements known to the Company which may, at a subsequent date, result in a change of control of the Company.

***Control by Others***

To the best of the Company's knowledge, the Company is not directly or indirectly owned or controlled by another corporation(s), any foreign government, or any other natural or legal person, severally or jointly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.Related Party Transactions**

We have entered into employment contracts with each of our senior management members (see Item 6).

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Since the beginning of the fiscal year ended December 31, 2022 up to March 3, 2023, we did not enter into any other related party transactions and we do not have any loans outstanding with any officer, director or major shareholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.Interests of Experts and Counsel**

Not Applicable.

**ITEM 8. FINANCIAL INFORMATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.Consolidated Statements and Other Financial Statements**

***Financial Statements***

The consolidated financial statements filed as part of this annual report are filed under Item 18.

***Legal Proceedings***

The directors and the management of the Company do not know of any material, active or pending, legal and bankruptcy proceedings against them; nor is the Company involved as a plaintiff in any material proceeding or pending litigation.

The directors and the management of the Company know of no active or pending proceedings against anyone that might materially adversely affect an interest of the Company.

***Dividend Policy***

The Company has not paid any dividends on its common shares. The Company may pay dividends on its common shares in the future if it generates profits. Any decision to pay dividends on common shares in the future will be made by the board of directors on the basis of the earnings, financial requirements and other conditions existing at such time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.Significant Changes**

No significant changes have occurred since the date of our annual financial statements included in this annual report on Form 20-F.

**ITEM 9. THE OFFER AND LISTING**

Not applicable except for Item 9.A.4 and Item 9.C.

Our Common Shares, no par value, are traded/quoted on the Nasdaq and the TSX under the symbols "ONCY" and "ONC", respectively.

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**ITEM 10. ADDITIONAL INFORMATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.Share Capital**

Not Applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.Memorandum and Articles of Association**

*Articles of Continuance*

We are governed by our amended articles of incorporation (the "Articles") under the Business Corporations Act of Alberta (the "Act") and by our by-laws (the "By-laws"). Our Alberta corporate access number is 207797382. Our Articles provide that there are no restrictions on the business we may carry on or on the powers we may exercise. Companies incorporated under the Act are not required to include specific objects or purposes in their articles or by-laws.

*Directors*

Subject to certain exceptions, including in respect of voting on any resolution to approve a contract that relates primarily to the director's remuneration, directors may not vote on resolutions to approve a material contract or material transaction if the director is a party to such contract or transaction. The directors are entitled to remuneration as shall from time to time be determined by the Board of Directors with no requirement for a quorum of independent directors. The directors have the ability under the Act to exercise our borrowing power, without authorization of the shareholders. The Act permits shareholders to restrict this authority through a company's articles or by-laws (or through a unanimous shareholder agreement), but no such restrictions are in place for us. Our Articles and By-laws do not require directors to hold shares for qualification. Neither the Articles or the By-laws contain an age limit requirement for the retirement of directors. The Corporation actively encourages independent board member renewal through its formal term limit policy, adopted on June 30, 2015, whereby the independent director term limit is set at 12 years. Under the policy, the Board of Directors maintains the discretion to extend a directors' term, if under the circumstances, it is in the best interest of the Corporation and its shareholders. This in practice ensures that new independent directors are appointed regularly, without losing the experience base of long serving directors.

*Rights, Preferences, and Dividends Attaching to Shares*

The holders of common shares have the right to receive dividends if and when declared. Each holder of common shares, as of the record date prior to a meeting, is entitled to attend and to cast one vote for each common share held as of such record date at such annual and/or special meeting, including with respect to the election or re-election of directors. Subject to the provisions of our By-laws, all directors may, if still qualified to serve as directors, stand for re-election. The numbers of our Board of Directors are not replaced at staggered intervals but are elected annually.

On a distribution of assets on a winding-up, dissolution, or other return of capital (subject to certain exceptions) the holders of common shares shall have a right to receive their *pro rata* share of such distribution. There are no sinking fund or redemption provisions in respect of the common shares. Our shareholders have no liability to further capital calls as all shares issued and outstanding are fully paid and non-assessable.

No other classes of shares are currently permitted to be issued.

*Action Necessary to Change the Rights of Shareholders*

The rights attaching to the different classes of shares may be varied by special resolution passed at a meeting of that class's shareholders.

*Annual and Special Meetings of Shareholders*

Under the Act and our By-laws, we are required to mail a Notice of Meeting and Management Information Circular to registered shareholders not less than 21 days and not more than 50 days prior to the date of the meeting. Such materials must be filed concurrently with the applicable securities regulatory authorities in Canada and the U.S.. Subject to certain provisions of the By-laws, a quorum of two or more shareholders in person or represented by proxy holding or representing by proxy not less than five (5%) percent of the total number of issued and outstanding shares enjoying voting rights at such meeting is required to properly constitute a meeting of shareholders. Shareholders and their duly appointed proxies and corporate representatives are entitled to be admitted to our annual and/or special meetings.

------

*Limitations on the Rights to Own Shares*

The Articles do not contain any limitations on the rights to own shares. Except as described below, there are currently no limitations imposed by Canadian federal or provincial laws on the rights of non-resident or foreign owners of Canadian securities to hold or vote the securities held. There are also no such limitations imposed by the Articles and By-laws with respect to our common shares.

*Disclosure of Share Ownership*

In general, under applicable securities regulation in Canada, a person or company who beneficially owns, directly or indirectly, voting securities of an issuer or who exercises control or direction over voting securities of an issuer or a combination of both, carrying more than 10% of the voting rights attached to all the issuer's outstanding voting securities is an insider and must, within 10 days of becoming an insider, file a report in the required form effective the date on which the person became an insider. The report must disclose any direct or indirect beneficial ownership of, or control or direction over, securities of the reporting issuer. Additionally, securities regulation in Canada provides for the filing of a report by an insider of a reporting issuer whose holdings change, which report must be filed within 5 days from the day on which the change takes place.

The rules in the U.S. governing the ownership threshold above which shareholder ownership must be disclosed are more stringent than those discussed above. Section 13 of the Exchange Act imposes reporting requirements on persons who acquire beneficial ownership (as such term is defined in Rule 13d-3 under the Exchange Act) of more than 5% of a class of an equity security registered under Section 12 of the Exchange Act. In general, such persons must file, within 10 days after such acquisition, a report of beneficial ownership with the SEC containing the information prescribed by the regulations under Section 13 of the Exchange Act. This information is also required to be sent to the issuer of the securities and to each exchange where the securities are traded.

*Other Provisions of Articles and By-laws*

There are no provisions in the Articles or By-laws:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• delaying or prohibiting a change in control of our company that operate only with respect to a merger, acquisition or corporate restructuring;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• discriminating against any existing or prospective holder of shares as a result of such shareholder owning a substantial number of shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• requiring disclosure of share ownership; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• governing changes in capital, where such provisions are more stringent than those required by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.Material Contracts**

We have employment contracts with each of our officers as summarized in Item 6B. Other than these employment contracts, we have not entered into any other contract other than in the ordinary course of business over the last two years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.Exchange Controls** 

Canada presently has no system of exchange controls. There are no Canadian restrictions on the repatriation of capital or earnings of a Canadian public company to non-resident investors. There are no laws in Canada or exchange restrictions affecting the remittance of dividends, profits, interest, royalties, and other payments to non-resident holders of our securities, except as discussed below in Section E, *Taxation*.

*Restrictions on Share Ownership by Non-Canadians*

There are no limitations under the laws of Canada or in our organizing documents on the right of foreigners to hold or vote securities of our company, except that the *Investment Canada Act* may require review and approval by the Minister of Industry (Canada) of certain acquisitions of "control" of our company by a "non-Canadian". The threshold for acquisitions of control is generally defined as being one-third or more of the voting shares of the company. "Non-Canadian" generally means an individual who is not a Canadian citizen, or a corporation, partnership, trust, or joint venture that is ultimately controlled by non-Canadians.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E.Taxation** 

**MATERIAL CANADIAN FEDERAL INCOME TAX CONSIDERATIONS**

The following is, as of the date of this annual report, a summary of the principal Canadian federal income tax considerations under the *Income Tax Act* (Canada) and the regulations thereunder (the "**Tax Act**") generally applicable to an investor who acquires as beneficial owner Common Shares and who, for the purposes of the Tax Act and the Regulations and at all relevant times deals at arm's length with the Corporation and the Agent, is not affiliated with the Corporation or the Agent, is not exempt from tax under Part I of the Tax Act, and who acquires and holds the Common Shares, as capital property (a "**Holder**"). Generally, the Common Shares will be considered to be capital property to a Holder provided that the Holder does not hold the Common Shares in the course of carrying on a business as part of an adventure or concern in the nature of trade.

This summary is generally applicable to a Holder who, at all relevant times, for purposes of the Tax Act: (i) is not, and is not deemed to be, resident in Canada for the purposes of the Tax Act or any applicable income tax treaty or convention; and (ii) does not and will not use or hold, and is not and will not be deemed to hold, the Common Shares in connection with carrying on a business in Canada (a "**Non-Resident Holder**").

Special rules, which are not discussed in this summary, may apply to certain holders that are insurers carrying on an insurance business in Canada and elsewhere or an "authorized foreign bank" (as defined in the Tax Act). Such Holders should consult their own tax advisors with respect to an investment in Common Shares.

This summary is based upon the current provisions of the Tax Act in force as of the date of this annual report and counsel's understanding of the current administrative policies and assessing practices of the Canada Revenue Agency (the "**CRA**") published in writing by the CRA prior to the date of this annual report. This summary takes into account all specific proposals to amend the Tax Act publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date of this annual report (the "**Tax Proposals**") and assumes that the Tax Proposals will be enacted in the form proposed, although no assurance can be given that the Tax Proposals will be enacted in their current form or at all.

Other than the Tax Proposals, this summary does not otherwise take into account or anticipate any changes in law, whether by legislative, governmental, administrative, or judicial decision or action, nor does it take into account or consider any provincial, territorial or foreign income tax considerations (other than those described below under "**MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS**"), which considerations may differ significantly from the Canadian federal income tax considerations discussed in this summary. This summary also does not take into account any change in the administrative policies or assessing practices of the CRA. No assurances can be given that the subsequent changes in law or administrative policy will not affect or modify the contents of this summary.

**This summary is of a general nature only, is not exhaustive of all possible Canadian federal income tax considerations and is not intended to be, nor should it be construed to be, legal or tax advice to any particular Holder. Holders should consult their own tax advisors with respect to the tax consequences to them in their particular circumstances, including the application and effect of the income and other tax laws of any country, province, state or local tax authority.**

**Currency**

For purposes of the Tax Act, all amounts relating to the acquisition, holding, or disposition of the Common Shares (including dividends, adjusted cost base and proceeds of disposition) must, to the extent such amounts are not in Canadian dollars, be converted into Canadian dollars based on an exchange rate determined in accordance with the Tax Act.

**Dividends**

Dividends paid or credited or deemed to be paid or credited on the Common Shares to a Non-Resident Holder by the Corporation are subject to Canadian withholding tax at the rate of 25% on the gross amount of the dividend, unless such rate is reduced by the terms of an applicable tax treaty. For example, under the *Canada-United States Tax Convention (1980)*, as amended (the "**Treaty**"), the rate of withholding tax on dividends paid or credited to a Non-Resident Holder who is a beneficial owner of dividends and who is a resident of the United States for purposes of the Treaty and who is fully entitled to the benefits of the Treaty is generally limited to 15% of the gross amount of the dividend (or 5% in the case of a Non-Resident Holder that is a company that beneficially owns at least 10% of the Common Shares). **Non-Resident Holders are urged to consult their own tax advisors to determine their entitlement to relief under an applicable income tax treaty.**

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**Dispositions of Common Shares**

Upon a disposition (or a deemed disposition) of a Common Share (other than to the Corporation unless purchased by the Corporation in the open market in the manner in which shares are normally purchased by any member of the public in the open market), a Non-Resident Holder generally will realize a capital gain (or a capital loss) equal to the amount by which the proceeds of disposition of such Common Shares, net of any reasonable costs of disposition, are greater (or are less) than the adjusted cost base of such Common Share to the Non-Resident Holder.

A Non-Resident Holder generally will not be subject to tax under the Tax Act in respect of a capital gain realized on the disposition or deemed disposition of a Common Share and a capital loss arising on such a disposition or deemed disposition will not be recognized under the Tax Act unless the Common Share constitutes "taxable Canadian property" and is not "treaty-protected property" (each as defined under the Tax Act) of the Non-Resident Holder at the time of disposition or deemed disposition.

Provided the Common Shares are listed on a "designated stock exchange", as defined in the Tax Act (which currently includes the NASDAQ and TSX), at the time of disposition, the Common Shares generally will not constitute taxable Canadian property of a Non-Resident Holder at that time, unless at any time during the 60 month period immediately preceding the disposition the following two conditions are met concurrently: (i) one or any combination of (a) the Non-Resident Holder, (b) persons with whom the Non-Resident Holder did not deal at arm's length, and (c) partnerships in which the Non-Resident Holder or a person with whom the Non-Resident Holder did not deal at arm's length held a membership interest directly or indirectly through one or more partnerships, owned 25% or more of the issued shares of any class or series of shares of the Corporation; and (ii) more than 50% of the fair market value of such shares was derived directly or indirectly from one or any combination of (a) real or immovable property situated in Canada, (b) "Canadian resource properties" (as defined in the Tax Act), (c) "timber resource properties" (as defined in the Tax Act) or (d) an option in respect of, an interest in, or for civil law a right in any of the foregoing property, whether or not such property exists. Notwithstanding the foregoing, a Common Share may otherwise be deemed to be taxable Canadian property to a Non-Resident Holder for purposes of the Tax Act in certain circumstances.

**Non-Resident Holders whose Common Shares may be taxable Canadian property should consult their own tax advisors.**

**MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS** 

The following is a general summary of certain material U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising from and relating to the acquisition, ownership and disposition of Common Shares.

This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations that may apply to a U.S. Holder arising from and relating to the acquisition, ownership, and disposition of Common Shares. In addition, this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax consequences to such U.S. Holder, including, without limitation, specific tax consequences to a U.S. Holder under an applicable income tax treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any U.S. Holder. This summary does not address the U.S. federal alternative minimum, U.S. federal net investment income, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences to U.S. Holders of the acquisition, ownership, and disposition of Common Shares. In addition, except as specifically set forth below, this summary does not discuss applicable tax reporting requirements. Each prospective U.S. Holder should consult its own tax advisors regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal net investment income, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences relating to the acquisition, ownership and disposition of Common Shares.

No legal opinion from U.S. legal counsel or ruling from the Internal Revenue Service (the "IRS") has been requested, or will be obtained, regarding the U.S. federal income tax consequences of the acquisition, ownership, and disposition of Common Shares. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this summary. In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and the U.S. courts could disagree with one or more of the conclusions described in this summary.

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**Scope of this Summary**

<u>Authorities</u>

This summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations (whether final, temporary, or proposed), published rulings of the IRS, published administrative positions of the IRS, the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended (the "Canada-U.S. Tax Convention"), and U.S. court decisions that are applicable, and, in each case, as in effect and available, as of the date of this document. Any of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change could be applied retroactively. This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation that, if enacted, could be applied on a retroactive or prospective basis.

<u>U.S. Holders</u>

For purposes of this summary, the term "U.S. Holder" means a beneficial owner of Common Shares that is for U.S. federal income tax purposes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an individual who is a citizen or resident of the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof, or the District of Columbia;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an estate whose income is subject to U.S. federal income taxation regardless of its source; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a trust that (1) is subject to the primary supervision of a court within the U.S. and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.

<u>U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed</u>

This summary does not address the U.S. federal income tax considerations applicable to U.S. Holders that are subject to special provisions under the Code, including, but not limited to, U.S. Holders that: (a) are tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; (b) are financial institutions, underwriters, insurance companies, real estate investment trusts, or regulated investment companies; (c) are broker-dealers, dealers, or traders in securities or currencies that elect to apply a mark-to-market accounting method; (d) have a "functional currency" other than the U.S. dollar; (e) own Common Shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other integrated transaction; (f) acquire Common Shares in connection with the exercise of employee stock options or otherwise as compensation for services; (g) hold Common Shares other than as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment purposes); (h) are partnerships or other flow-through entities (and partners or other owners thereof); (i) are S corporations (and shareholders thereof); (i) are subject to special tax accounting rules with respect to Common Shares; or (j) own, have owned or will own (directly, indirectly, or by attribution) 10% or more of the total combined voting power or value of the outstanding shares of the Corporation; (k) are subject to taxing jurisdictions other than, or in addition to, the United States or otherwise hold Common Shares in connection with a trade or business, permanent establishment, or fixed base outside the United States; (l) are U.S. expatriates or former long-term residents of the United States subject to Section 877 or 877A of the Code; or (m) are subject to the alternative minimum tax. U.S. Holders that are subject to special provisions under the Code, including, but not limited to, U.S. Holders described immediately above, should consult their own tax advisors regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal net investment income, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences relating to the acquisition, ownership, and disposition of Common Shares.

If an entity or arrangement that is classified as a partnership (or other "pass-through" entity) for U.S. federal income tax purposes holds Common Shares, the U.S. federal income tax consequences to such entity or arrangement and the partners (or other owners or participants) of such entity or arrangement generally will depend on the activities of the entity or arrangement and the status of such partners (or owners or participants). This summary does not address the tax consequences to any such partner (or owner or participants). Partners (or other owners or participants) of entities or arrangements that are classified as partnerships or as "pass-through" entities for U.S. federal income tax purposes should consult their own tax advisors regarding the U.S. federal income tax consequences arising from and relating to the acquisition, ownership, and disposition of Common Shares.

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**Passive Foreign Investment Company Rules**

<u>PFIC Status of the Corporation</u>

If the Corporation were to constitute a "passive foreign investment company" under the meaning of Section 1297 of the Code (a "PFIC", as defined below) for any year during a U.S. Holder's holding period, then certain potentially adverse rules would affect the U.S. federal income tax consequences to a U.S. Holder as a result of the acquisition, ownership and disposition of Common Shares. The Corporation believes that it was classified as a PFIC during the tax year ended December 31, 2022, and based on current business plans and financial expectations, the Corporation expects that it will be a PFIC for the current tax year and may be a PFIC in future tax years. No opinion of legal counsel or ruling from the IRS concerning the status of the Corporation as a PFIC has been obtained or is currently planned to be requested. The determination of whether any corporation was, or will be, a PFIC for a tax year depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. In addition, whether any corporation will be a PFIC for any tax year depends on the assets and income of such corporation over the course of each such tax year and, as a result, cannot be predicted with certainty as of the date of this document. Accordingly, there can be no assurance that the IRS will not challenge any determination made by the Corporation (or any subsidiary of the Corporation) concerning its PFIC status. Each U.S. Holder should consult its own tax advisors regarding the PFIC status of the Corporation and each subsidiary of the Corporation.

In any year in which the Corporation is classified as a PFIC, a U.S. Holder will be required to file an annual report with the IRS containing such information as Treasury Regulations and/or other IRS guidance may require. In addition to penalties, a failure to satisfy such reporting requirements may result in an extension of the time period during which the IRS can assess a tax. U.S. Holders should consult their own tax advisors regarding the requirements of filing such information returns under these rules, including the requirement to file an IRS Form 8621 annually.

The Corporation generally will be a PFIC if, for a tax year, (a) 75% or more of the gross income of the Corporation is passive income (the "PFIC income test") or (b) 50% or more of the value of the Corporation's assets either produce passive income or are held for the production of passive income, based on the quarterly average of the fair market value of such assets (the "PFIC asset test"). "Gross income" generally includes all sales revenues less the cost of goods sold, plus income from investments and from incidental or outside operations or sources, and "passive income" generally includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions.

For purposes of the PFIC income test and PFIC asset test described above, if the Corporation owns, directly or indirectly, 25% or more of the total value of the outstanding shares of another corporation, the Corporation will be treated as if it (a) held a proportionate share of the assets of such other corporation and (b) received directly a proportionate share of the income of such other corporation. In addition, for purposes of the PFIC income test and PFIC asset test described above, and assuming certain other requirements are met, "passive income" does not include certain interest, dividends, rents, or royalties that are received or accrued by the Corporation from certain "related persons" (as defined in Section 954(d)(3) of the Code) also organized in Canada, to the extent such items are properly allocable to the income of such related person that is not passive income.

Under certain attribution rules, if the Corporation is a PFIC, U.S. Holders will generally be deemed to own their proportionate share of the Corporation's direct or indirect equity interest in any company that is also a PFIC (a ''Subsidiary PFIC''), and will generally be subject to U.S. federal income tax on their proportionate share of (a) any "excess distributions," as described below, on the stock of a Subsidiary PFIC and (b) a disposition or deemed disposition of the stock of a Subsidiary PFIC by the Corporation or another Subsidiary PFIC, both as if such U.S. Holders directly held the shares of such Subsidiary PFIC. In addition, U.S. Holders may be subject to U.S. federal income tax on any indirect gain realized on the stock of a Subsidiary PFIC on the sale or disposition of Common Shares. Accordingly, U.S. Holders should be aware that they could be subject to tax under the PFIC rules even if no distributions are received and no redemptions or other dispositions of Common Shares are made.

<u>Default PFIC Rules Under Section 1291 of the Code</u>

If the Corporation is a PFIC for any tax year during which a U.S. Holder owns Common Shares, the U.S. federal income tax consequences to such U.S. Holder of the acquisition, ownership, and disposition of Common Shares will depend on whether and when such U.S. Holder makes an election to treat the Corporation and each Subsidiary PFIC, if any, as a "qualified electing fund" or "QEF" under Section 1295 of the Code (a "QEF Election") or makes a mark-to-market election under Section 1296 of the Code (a "Mark-to-Market Election"). A U.S. Holder that does not make either a QEF Election or a Mark-to-Market Election will be referred to in this summary as a "Non-Electing U.S. Holder."

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A Non-Electing U.S. Holder will be subject to the rules of Section 1291 of the Code (described below) with respect to (a) any gain recognized on the sale or other taxable disposition of Common Shares and (b) any "excess distribution" received on the Common Shares. A distribution generally will be an "excess distribution" to the extent that such distribution (together with all other distributions received in the current tax year) exceeds 125% of the average distributions received during the three preceding tax years (or during a U.S. Holder's holding period for the Common Shares, if shorter).

Under Section 1291 of the Code, any gain recognized on the sale or other taxable disposition of Common Shares (including an indirect disposition of the stock of any Subsidiary PFIC), and any "excess distribution" received on Common Shares or with respect to the stock of a Subsidiary PFIC, must be ratably allocated to each day in a Non-Electing U.S. Holder's holding period for the respective Common Shares. The amount of any such gain or excess distribution allocated to the tax year of disposition or distribution of the excess distribution and to years before the entity became a PFIC, if any, would be taxed as ordinary income (and not eligible for certain preferred rates). The amounts allocated to any other tax year would be subject to U.S. federal income tax at the highest tax rate applicable to ordinary income in each such year, and an interest charge would be imposed on the tax liability for each such year, calculated as if such tax liability had been due in each such year. A Non-Electing U.S. Holder that is not a corporation must treat any such interest paid as "personal interest," which is not deductible.

If the Corporation is a PFIC for any tax year during which a Non-Electing U.S. Holder holds Common Shares, the Corporation will continue to be treated as a PFIC with respect to such Non-Electing U.S. Holder, regardless of whether the Corporation ceases to be a PFIC in one or more subsequent tax years. A Non-Electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above), but not loss, as if such Common Shares were sold on the last day of the last tax year for which the Corporation was a PFIC.

<u>QEF Election</u>

A U.S. Holder that makes a timely and effective QEF Election for the first tax year in which the holding period of its Common Shares begins generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to its Common Shares. A U.S. Holder that makes a timely and effective QEF Election will be subject to U.S. federal income tax on such U.S. Holder's pro rata share of (a) the net capital gain of the Corporation, which will be taxed as long-term capital gain to such U.S. Holder, and (b) the ordinary earnings of the Corporation, which will be taxed as ordinary income to such U.S. Holder. Generally, "net capital gain" is the excess of (a) net long-term capital gain over (b) net short-term capital loss, and "ordinary earnings" are the excess of (a) "earnings and profits" over (b) net capital gain. A U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such amounts for each tax year in which the Corporation is a PFIC, regardless of whether such amounts are actually distributed to such U.S. Holder by the Corporation. However, for any tax year in which the Corporation is a PFIC and has no net income or gain, U.S. Holders that have made a QEF Election would not have any income inclusions as a result of the QEF Election. If a U.S. Holder that made a QEF Election has an income inclusion, such a U.S. Holder may, subject to certain limitations, elect to defer payment of current U.S. federal income tax on such amounts, subject to an interest charge. If such U.S. Holder is not a corporation, any such interest paid will be treated as "personal interest," which is not deductible.

A U.S. Holder that makes a timely and effective QEF Election with respect to the Corporation generally (a) may receive a tax-free distribution from the Corporation to the extent that such distribution represents "earnings and profits" of the Corporation that were previously included in income by the U.S. Holder because of such QEF Election and (b) will adjust such U.S. Holder's tax basis in the Common Shares to reflect the amount included in income or allowed as a tax-free distribution because of such QEF Election. In addition, a U.S. Holder that makes a QEF Election generally will recognize capital gain or loss on the sale or other taxable disposition of Common Shares.

The procedure for making a QEF Election, and the U.S. federal income tax consequences of making a QEF Election, will depend on whether such QEF Election is timely. A QEF Election will be treated as "timely" if such QEF Election is made for the first year in the U.S. Holder's holding period for the Common Shares in which the Corporation was a PFIC. A U.S. Holder may make a timely QEF Election by filing the appropriate QEF Election documents at the time such U.S. Holder files a U.S. federal income tax return for such year. If a U.S. Holder does not make a timely and effective QEF Election for the first year in the U.S. Holder's holding period for the Common Shares, the U.S. Holder may still be able to make a timely and effective QEF Election in a subsequent year if such U.S. Holder meets certain requirements and makes a "purging" election to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above) as if such Common Shares were sold for their fair market value on the day the QEF Election is effective. If a U.S. Holder makes a QEF Election but does not make a "purging" election to recognize gain as discussed in the preceding sentence, then such U.S. Holder shall be subject to the QEF Election rules and shall continue to be subject to tax under the rules of Section 1291 discussed above with respect to its Common Shares. If a U.S. Holder owns PFIC stock indirectly through another PFIC, separate QEF Elections must be made for the PFIC in which the U.S. Holder is a direct shareholder and the Subsidiary PFIC for the QEF rules to apply to both PFICs.

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A QEF Election will apply to the tax year for which such QEF Election is timely made and to all subsequent tax years, unless such QEF Election is invalidated or terminated or the IRS consents to revocation of such QEF Election. If a U.S. Holder makes a QEF Election and, in a subsequent tax year, the Corporation ceases to be a PFIC, the QEF Election will remain in effect (although it will not be applicable) during those tax years in which the Corporation is not a PFIC. Accordingly, if the Corporation becomes a PFIC in another subsequent tax year, the QEF Election will be effective and the U.S. Holder will be subject to the QEF rules described above during any subsequent tax year in which the Corporation qualifies as a PFIC.

The Corporation: (a) will make available to U.S. Holders, upon their written request, information as to its status as a PFIC and the PFIC status of any subsidiary in which the Corporation owns more than 50% of such subsidiary's total aggregate voting power and (b) for each year in which the Corporation is a PFIC, provide to a U.S. Holder, upon written request, such information and documentation that a U.S. Holder making a QEF Election with respect to the Corporation and such more than 50% owned subsidiary which constitutes a PFIC is reasonably required to obtain for U.S. federal income tax purposes. The Corporation may elect to provide such information on its website. With respect to any Subsidiary PFIC in which the Corporation owns 50% or less of the aggregate voting power, upon the written request of a U.S. Holder acquiring Common Shares, the Corporation will request that such Subsidiary PFIC provide such U.S. Holder with the information that such U.S. Holder requires to report under the QEF rules; provided, however, the Corporation can provide no assurances that such Subsidiary PFIC will provide such information.

A U.S. Holder makes a QEF Election by attaching a completed IRS Form 8621, including a PFIC Annual Information Statement, to a timely filed United States federal income tax return. However, if the Corporation does not provide the required information with regard to the Corporation or any of its Subsidiary PFICs, U.S. Holders will not be able to make a QEF Election for such entity and will continue to be subject to the rules of Section 1291 of the Code discussed above that apply to Non-Electing U.S. Holders with respect to the taxation of gains and excess distributions.

<u>Mark-to-Market Election</u>

A U.S. Holder may make a Mark-to-Market Election only if the Common Shares are marketable stock. The Common Shares generally will be "marketable stock" if the Common Shares are regularly traded on (a) a national securities exchange that is registered with the Securities and Exchange Commission, (b) the national market system established pursuant to section 11A of the U.S. Exchange Act, or (c) a foreign securities exchange that is regulated or supervised by a governmental authority of the country in which the market is located, provided that (i) such foreign exchange has trading volume, listing, financial disclosure, and surveillance requirements, and meets other requirements, and the laws of the country in which such foreign exchange is located, together with the rules of such foreign exchange, ensure that such requirements are actually enforced and (ii) the rules of such foreign exchange effectively promote active trading of listed stocks. If such stock is traded on such a qualified exchange or other market, such stock generally will be "regularly traded" for any calendar year during which such stock is traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. Provided that the Common Shares are "regularly traded" as described in the preceding sentence, the Common Shares are expected to be marketable stock. However, each U.S. Holder should consult its own tax advisor in this matter.

A U.S. Holder that makes a Mark-to-Market Election with respect to its Common Shares generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to such Common Shares. However, if a U.S. Holder does not make a Mark-to-Market Election beginning in the first tax year of such U.S. Holder's holding period for the Common Shares for which the Corporation is a PFIC and such U.S. Holder has not made a timely QEF Election, the rules of Section 1291 of the Code discussed above will apply to certain dispositions of, and distributions on, the Common Shares.

A U.S. Holder that makes a Mark-to-Market Election will include in ordinary income, for each tax year in which the Corporation is a PFIC, an amount equal to the excess, if any, of (a) the fair market value of the Common Shares, as of the close of such tax year over (b) such U.S. Holder's adjusted tax basis in such Common Shares. A U.S. Holder that makes a Mark-to-Market Election will be allowed a deduction in an amount equal to the excess, if any, of (a) such U.S. Holder's adjusted tax basis in the Common Shares, over (b) the fair market value of such Common Shares (but only to the extent of the net amount of previously included income as a result of the Mark-to-Market Election for prior tax years).

A U.S. Holder that makes a Mark-to-Market Election generally also will adjust such U.S. Holder's tax basis in the Common Shares to reflect the amount included in gross income or allowed as a deduction because of such Mark-to-Market Election. In addition, upon a sale or other taxable disposition of Common Shares, a U.S. Holder that makes a Mark-to-Market Election will recognize ordinary income or ordinary loss (not to exceed the excess, if any, of (a) the amount included in ordinary income because of such Mark-to-Market Election for prior tax years over (b) the amount allowed as a deduction because of such Mark-to-Market Election for prior tax years). Losses that exceed this limitation are subject to the rules generally applicable to losses provided in the Code and Treasury Regulations.

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A U.S. Holder makes a Mark-to-Market Election by attaching a completed IRS Form 8621 to a timely filed United States federal income tax return. A Mark-to-Market Election applies to the tax year in which such Mark-to-Market Election is made and to each subsequent tax year, unless the Common Shares cease to be "marketable stock" or the IRS consents to revocation of such election. Each U.S. Holder should consult its own tax advisors regarding the availability of, and procedure for making, a Mark-to-Market Election.

Although a U.S. Holder may be eligible to make a Mark-to-Market Election with respect to the Common Shares, no such election may be made with respect to the stock of any Subsidiary PFIC that a U.S. Holder is treated as owning, because such stock is not marketable. Hence, the Mark-to-Market Election will not be effective to avoid the application of the default rules of Section 1291 of the Code described above with respect to deemed dispositions of Subsidiary PFIC stock or excess distributions from a Subsidiary PFIC to its shareholder.

<u>Other PFIC Rules</u>

Under Section 1291(f) of the Code, the IRS has issued proposed Treasury Regulations that, subject to certain exceptions, would cause a U.S. Holder that had not made a timely QEF Election to recognize gain (but not loss) upon certain transfers of Common Shares that would otherwise be tax-deferred (e.g., gifts and exchanges pursuant to corporate reorganizations). However, the specific U.S. federal income tax consequences to a U.S. Holder may vary based on the manner in which Common Shares are transferred.

Certain additional adverse rules may apply with respect to a U.S. Holder if the Corporation is a PFIC, regardless of whether such U.S. Holder makes a QEF Election. For example, under Section 1298(b)(6) of the Code, a U.S. Holder that uses Common Shares as security for a loan will, except as may be provided in Treasury Regulations, be treated as having made a taxable disposition of such Common Shares.

In addition, a U.S. Holder who acquires Common Shares from a decedent will not receive a "step up" in tax basis of such Common Shares to fair market value unless such decedent had a timely and effective QEF Election in place.

Special rules also apply to the amount of foreign tax credit that a U.S. Holder may claim on a distribution from a PFIC. Subject to such special rules, foreign taxes paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit. The rules relating to distributions by a PFIC and their eligibility for the foreign tax credit are complicated, and a U.S. Holder should consult with its own tax advisors regarding the availability of the foreign tax credit with respect to distributions by a PFIC.

The PFIC rules are complex, and each U.S. Holder should consult its own tax advisors regarding the PFIC rules and how the PFIC rules may affect the U.S. federal income tax consequences of the acquisition, ownership, and disposition of Common Shares.

**General Rules Applicable to the Ownership and Disposition of Common Shares**

The following discussion describes the general rules applicable to the ownership and disposition of the Common Shares but is subject in its entirety to the special rules described above under the heading "Passive Foreign Investment Company Rules."

<u>Distributions on Common Shares</u>

A U.S. Holder that receives a distribution, including a constructive distribution, with respect to a Common Share will be required to include the amount of such distribution in gross income as a dividend (without reduction for any Canadian income tax withheld from such distribution) to the extent of the current and accumulated "earnings and profits" of the Corporation, as computed for U.S. federal income tax purposes. A dividend generally will be taxed to a U.S. Holder at ordinary income tax rates if the Corporation is a PFIC for the tax year of such distribution or the preceding tax year. To the extent that a distribution exceeds the current and accumulated "earnings and profits" of the Corporation, such distribution will be treated first as a tax-free return of capital to the extent of a U.S. Holder's tax basis in the Common Shares and thereafter as gain from the sale or exchange of such Common Shares. (See "Sale or Other Taxable Disposition of Common Shares" below). However, the Corporation may not maintain the calculations of its earnings and profits in accordance with U.S. federal income tax principles, and each U.S. Holder may have to assume that any distribution by the Corporation with respect to the Common Shares will constitute ordinary dividend income. Dividends received on Common Shares by corporate U.S. Holders generally will not be eligible for the "dividends received deduction." Subject to applicable limitations and provided the Corporation is eligible for the benefits of the Canada-U.S. Tax Convention or the Common Shares are readily tradable on a United States securities market, dividends paid by the Corporation to non-corporate U.S. Holders, including individuals, generally will be eligible for the

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preferential tax rates applicable to long-term capital gains for dividends, provided certain holding period and other conditions are satisfied, including that the Corporation not be classified as a PFIC in the tax year of distribution or in the preceding tax year. The dividend rules are complex, and each U.S. Holder should consult its own tax advisors regarding the application of such rules.

<u>Sale or Other Taxable Disposition of Common Shares</u>

Upon the sale or other taxable disposition of Common Shares, a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between the U.S. dollar value of cash received plus the fair market value of any property received and such U.S. Holder's tax basis in such Common Shares sold or otherwise disposed of. A U.S. Holder's tax basis in Common Shares generally will be such holder's U.S. dollar cost for such Common Shares. Gain or loss recognized on such sale or other disposition generally will be long-term capital gain or loss if, at the time of the sale or other disposition, the Common Shares have been held for more than one year.

Preferential tax rates currently apply to long-term capital gain of a U.S. Holder that is an individual, estate, or trust. There are currently no preferential tax rates for long-term capital gain of a U.S. Holder that is a corporation. Deductions for capital losses are subject to significant limitations under the Code.

**Additional Considerations**

<u>Receipt of Foreign Currency</u>

The amount of any distribution paid to a U.S. Holder in foreign currency, or on the sale, exchange or other taxable disposition of Common Shares, generally will be equal to the U.S. dollar value of such foreign currency based on the exchange rate applicable on the date of receipt (regardless of whether such foreign currency is converted into U.S. dollars at that time). A U.S. Holder will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Any U.S. Holder who converts or otherwise disposes of the foreign currency after the date of receipt may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss, and generally will be U.S. source income or loss for foreign tax credit purposes. Different rules apply to U.S. Holders who use the accrual method of tax accounting. Each U.S. Holder should consult its own U.S. tax advisors regarding the U.S. federal income tax consequences of receiving, owning, and disposing of foreign currency.

<u>Foreign Tax Credit</u>

Dividends paid on the Common Shares will be treated as foreign-source income, and generally will be treated as "passive category income" or "general category income" for U.S. foreign tax credit purposes. The Code applies various complex limitations on the amount of foreign taxes that may be claimed as a credit by U.S. taxpayers. In addition, Treasury Regulations that apply to taxes paid or accrued in taxable years beginning on or after December 28, 2021 (the "Foreign Tax Credit Regulations") impose additional requirements for Canadian withholding taxes to be eligible for a foreign tax credit, and there can be no assurance that those requirements will be satisfied.

Subject to the PFIC rules and the Foreign Tax Credit Regulations, each as discussed above, a U.S. Holder that pays (whether directly or through withholding) Canadian income tax with respect to dividends paid on the Common Shares generally will be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for such Canadian income tax. Generally, a credit will reduce a U.S. Holder's U.S. federal income tax liability on a dollar-for-dollar basis, whereas a deduction will reduce a U.S. Holder's income that is subject to U.S. federal income tax. This election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year. The foreign tax credit rules are complex and involve the application of rules that depend on a U.S. Holder's particular circumstances. Accordingly, each U.S. Holder should consult its own U.S. tax advisors regarding the foreign tax credit rules.

<u>Backup Withholding and Information Reporting</u>

Under U.S. federal income tax law, certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement in, a foreign corporation. For example, U.S. return disclosure obligations (and related penalties) are imposed on individuals who are U.S. Holders that hold certain specified foreign financial assets in excess of certain thresholds. The definition of specified foreign financial assets includes not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts maintained by a financial institution, any stock or security issued by a non-U.S. person, any financial instrument or contract held for investment that has an issuer or counterparty other than a U.S. person and any interest in a foreign entity. U.S. Holders may be subject to these reporting requirements unless their Common

------

Shares are held in an account at certain financial institutions. Penalties for failure to file certain of these information returns are substantial. U.S. Holders should consult with their own tax advisors regarding the requirements of filing information returns, including the requirement to file an IRS Form 8938.

Payments made within the U.S., or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of, Common Shares will generally be subject to information reporting and backup withholding tax if a U.S. Holder (a) fails to furnish such U.S. Holder's correct U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax. However, certain exempt persons generally are excluded from these information reporting and backup withholding rules. Backup withholding is not an additional tax. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. Holder's U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner.

The discussion of reporting requirements set forth above is not intended to constitute a complete description of all reporting requirements that may apply to a U.S. Holder. A failure to satisfy certain reporting requirements may result in an extension of the time period during which the IRS can assess a tax and, under certain circumstances, such an extension may apply to assessments of amounts unrelated to any unsatisfied reporting requirement. Each U.S. Holder should consult its own tax advisors regarding the information reporting and backup withholding rules.

**THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF COMMON SHARES. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO THEM IN THEIR OWN PARTICULAR CIRCUMSTANCES.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**F.Dividends and Paying Agents**

Not Applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**G.Statements by Experts**

Not Applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**H.Documents on Display**

We are subject to the informational requirements of the Exchange Act and file reports and other information with the SEC. The SEC maintains a Website that contains reports, proxy and information statements, and other information regarding registrants that file electronically with the SEC at www.sec.gov.

We are required to file reports and other information with the securities commissions in Canada. You are invited to read and copy any reports, statements, or other information, other than confidential filings, that we file with the provincial securities commissions. These filings are also electronically available from the Canadian System for Electronic Document Analysis and Retrieval ("SEDAR") (www.sedar.com), the Canadian equivalent of the SEC's electronic document gathering and retrieval system.

We "incorporate by reference" information that we file with the SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this Form 20-F and more recent information automatically updates and supersedes more dated information contained or incorporated by reference in this Form 20-F.

As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders.

We will provide without charge to each person, including any beneficial owner, to whom a copy of this annual report has been delivered, on the written or oral request of such person, a copy of any or all documents referred to above which have been or may be incorporated by reference in this annual report (not including exhibits to such incorporated information that are not specifically incorporated by reference into such information). Requests for such copies should be directed to us at the following

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address: Oncolytics Biotech Inc., 804, 322 11<sup>th</sup> Avenue SW, Calgary, Alberta, Canada T2R 0C5, Attention: Kirk Look. Telephone (403) 670 - 7377. Facsimile (403) 283-0858 EMAIL: info@oncolyticsbiotech.com.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**I.Subsidiary Information**

Not applicable.

**ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.**

Please see Item 4 – "Information on the Company" and Note 16 *Financial Instruments* in our audited consolidated financial statements beginning on page F-1 of this annual report on Form 20-F.

We do not currently have any long-term debt, nor do we currently utilize interest rate swap contracts to hedge against interest rate risk.

We do not use financial instruments for trading purposes and are not parties to any leverage derivatives. We do not currently engage in hedging transactions.

**ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.**

Not applicable.

**PART II**

**ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.**

None.

**ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.**

**A. - D. Material Modification to the Rights of Security Holders**

None.

**E. Use of Proceeds**

Not Applicable.

**ITEM 15. CONTROLS AND PROCEDURES**

***Disclosure Controls and Procedures***

It is the conclusion of our Chief Executive Officer and Chief Financial Officer that our Company's disclosure controls and procedures (as defined in Exchange Act rules 13a-15(e) and 15d-15(e)), based on their evaluation of these controls and procedures as of the end of the period covered by this annual report, are effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

***Management's Annual Report on Internal Control Over Financial Reporting***

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial

------

statements for external purposes in accordance with International Reporting Standards as issued by the International Accounting Standards Board ("IFRS"), and includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that receipts and expenditures of the Company are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Management, including the Company's Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission, 2013 Framework, (COSO) in Internal Control-Integrated Framework. Based on this assessment, management believes that, as of December 31, 2022, the Company's internal control over financial reporting was effective based on those criteria.

***Attestation Report of the Registered Public Accounting Firms***

In accordance with Securities and Exchange Commission's rules regarding non-accelerated filers, this annual report does not

include an attestation report of the Company's independent registered public accounting firm regarding the Company's internal

control over financial reporting.

***Changes in Internal Controls over Financial Reporting***

There were no changes in our internal controls over financial reporting that occurred during the period that is covered by this annual report that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

**ITEM 16 . [RESERVED]**

**ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT**

Our Board has determined that each of the Audit Committee members, Angela Holtham, Wayne Pisano, Deborah Brown, and James T. Parsons is an audit committee financial expert and each is independent pursuant to the Rule 5605(d)(2) of the Nasdaq Capital Market and Rule 10A-3 of the Exchange Act. For a description of the education and experience of each member of the Audit Committee, see Item 6A. Directors, Senior Management and Employees."

**ITEM 16B. CODE OF ETHICS**

Our Board of Directors has adopted a Code of Ethics for the Company that includes our Chief Executive Officer, Chief Financial Officer and Accounting Officer that applies to our Chief Executive Officer, Chief Financial Officer, and Controller. A copy of this Code of Ethics may be found on the Company's website at www.oncolyticsbiotech.com. Requests for such copies should be directed to us at the following address: Oncolytics Biotech Inc., 804, 322 11<sup>th</sup> Avenue SW, Calgary, Alberta, Canada T2R 0C5, Attention: Kirk Look Telephone (403) 670 - 7377. Facsimile (403) 283-0858 EMAIL: info@oncolyticsbiotech.com.

There were no amendments to our Code of Ethics during the fiscal year ended December 31, 2022. We did not grant any waivers to the provisions of our Code of Ethics during the fiscal year ended December 31, 2022.

------

**ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES**

*Audit Fees and Services*

During the financial years ended December 31, 2022 and 2021, Ernst & Young LLP (PCAOB ID: 1263) received the following fees:

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| | | |
|:---|:---|:---|
| **Item** | **2022** | **2021** |
| Audit fees<sup>(1)</sup> | $307742 | $244185 |
| Audit-related fees<sup>(2)</sup> | $— | $— |
| Tax fees<sup>(3)</sup> | $26862 | $28563 |
| All other fees<sup>(4)</sup> | $— | $— |

---

**Notes:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Audit fees were for professional services rendered for the audit of our annual financial statements and services provided in connection with statutory and regulatory filings or engagements, including review of interim financial statements, accounting consultations, assistance with prospectus filings, and matters relating to the provision of a consent letter for various filings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Audit-related fees were for assurance and related services reasonably related to the performance of the audit or review of the annual statements and are not reported under the heading Audit Fees above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Tax fees were for tax return preparations, scientific research and development return, and other tax consultation fees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Other fees are for products and services other than those described under the headings Audit Fees, Audit-Related Fees and Tax Fees above.

The Audit Committee pre-approves all audit services to be provided to us by our independent auditors. The Audit Committee's policy regarding the pre-approval of non-audit services to be provided to us by our independent auditors is that all such services shall be pre-approved by the Audit Committee or by the Chair of the Audit Committee, who must report all such pre-approvals to the Audit Committee at their next meeting following the granting thereof. Non-audit services that are prohibited to be provided to us by our independent auditors may not be pre-approved. In addition, prior to the granting of any pre-approval, the Audit Committee or the Chair, as the case may be, must be satisfied that the performance of the services in question will not compromise the independence of the independent auditors.

**ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES**

Not Applicable.

**ITEM 16E. PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASES**

None.

**ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANTS**

None.

**ITEM 16G. CORPORATE GOVERNANCE**

**NASDAQ CORPORATE GOVERNANCE**

Our common shares are quoted for trading on the Nasdaq Capital Market. Section 5615(a)(3) of the Nasdaq Marketplace Rules permits the Nasdaq to grant exemptions to a foreign private issuer for the provisions of the Rule 5600 series, Rule 5250 (d), and Rules 5210(c) and 5255 related to qualitative listing requirements. We are organized under the laws of the Province of Alberta and our common shares are listed for trading on The Toronto Stock Exchange. We comply with the laws of the Province of Alberta and rules and regulations of The Toronto Stock Exchange, including rules related to corporate governance practices. A description of the significant ways in which our governance practices differ from those followed by domestic companies pursuant to the Nasdaq Marketplace Rules is as follows:

*Shareholder Meeting Quorum Requirement*: The Nasdaq minimum quorum requirement for a shareholder meeting under Section 5620(c) of the Nasdaq Marketplace Rules is one-third of the outstanding shares of common stock. In addition, a company listed on Nasdaq is required to state our quorum requirement in our bylaws. Our quorum

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requirement is set forth in our corporate bylaws. A quorum for our shareholder meeting is two persons present and being, or representing by proxy, members holding not less than 5% of the issued shares entitled to be voted at such meeting.

The foregoing is consistent with the laws, customs and practices in Canada and the rules of The Toronto Stock Exchange.

**Board Diversity Matrix (as of February 24, 2023)**

---

| | |
|:---|:---|
| Country of Principal Executive Offices: | Canada |
| Foreign Private Issuer | Yes |
| Disclosure Prohibited Under Home Country Law | No |
| Total Number of Directors | 7 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Female** | **Male** | **Non-Binary** | **Did Not Disclose Gender** |
| **Part I: Gender Identity** | | | | |
| Directors | 2 | 5 |  |  |
| **Part II: Demographic Background** | | | | |
| Underrepresented Individual in Home Country Jurisdiction |  |  |  |  |
| LGBTQ+ | 1 | 1 | 1 | 1 |
| Did Not Disclose Demographic Background |  |  |  |  |

---

**ITEM 16H. MINE SAFETY DISCLOSURE**

Not applicable.

**ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS**

Not applicable.

**PART III**

**ITEM 17. FINANCIAL STATEMENTS.**

See Item 18. – "Financial Statements".

**ITEM 18 FINANCIAL STATEMENTS**

The financial statements appear on pages F-1 through F-24.

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**ITEM 19. EXHIBITS.**

The following exhibits are filed as part of this annual report:

---

| | |
|:---|:---|
| **EXHIBIT**<br>**<u>NUMBER</u>** | **<u>DESCRIPTION</u>** |
| | **Constating Documents** |
| 1.1<sup>(d)</sup> | <u>[Articles of Incorporation](https://www.sec.gov/Archives/edgar/data/1129928/000112992822000017/articles.htm)</u> |
| 1.2<sup>(d)</sup> | <u>[By-laws](https://www.sec.gov/Archives/edgar/data/1129928/000112992822000017/ex12onc-2017byxlaws1636459.htm)</u> |
|  | **Description of Securities** |
| 2.1 | <u>[Description of Securities Registered Under Section 12 of the Exchange Act](ex21exdescriptionofsecurit.htm)</u> |
|  | **Material Contracts** |
| 4.1<sup>(b)</sup>\* | <u>[Employment Agreement, dated August 1, 2013 between Oncolytics Biotech Inc. and its Director, Manufacturing and Engineering, Allison Hagerman](https://www.sec.gov/Archives/edgar/data/1129928/000112992820000012/ex41august2013hagerman.htm)</u> |
| 4.2<sup>(b)</sup>\* | <u>[Amending Agreement, dated December 1, 2015 between Oncolytics Biotech Inc. and its Director, Manufacturing and Engineering, Allison Hagerman](https://www.sec.gov/Archives/edgar/data/1129928/000112992820000012/ex42hagermandec2015.htm)</u> |
| 4.3<sup>(a)\*</sup> | <u>[Employment Agreement, dated June 29, 2017 between Oncolytics Biotech (U.S.) Inc. and its President, Andrew de Guttadauro](http://www.sec.gov/Archives/edgar/data/1129928/000112992818000028/ex443deguttadauro.htm)</u> |
| 4.4<sup>(a)#</sup> | <u>[License, development, supply and distribution agreement with Adlai Nortye Biopharma Co., Ltd dated November 14, 2017](http://www.sec.gov/Archives/edgar/data/1129928/000112992818000028/ex444regionallicensingagre.htm)</u> |
| 4.5<sup>(b)</sup>\* | <u>[Amending Agreement, dated January 1, 2019 between Oncolytics Biotech Inc. and its Vice President, Product Development, Allison Hagerman](https://www.sec.gov/Archives/edgar/data/1129928/000112992820000012/ex47hagermanamendment2019.htm)</u> |
| 4.6<sup>(b)</sup>\* | <u>[Executive Employment Agreement, dated January 1, 2019 between Oncolytics Biotech Inc. and its Chief Financial Officer, Kirk Look](https://www.sec.gov/Archives/edgar/data/1129928/000112992820000012/ex48kirklook2019.htm)</u> |
| 4.7<sup>(b)</sup>\* | <u>[Executive Employment Agreement, dated January 1, 2019 between Oncolytics Biotech Inc. and its Chief Executive Officer, Matthew Coffey](https://www.sec.gov/Archives/edgar/data/1129928/000112992820000012/ex49coffey2019.htm)</u> |
| 4.8<sup>(c)</sup>\* | <u>[Employment Agreement, dated August 3, 2020 between Oncolytics Biotech (U.S.) Inc. and its Global Head of Clinical Development and Operations, Thomas C. Heineman](https://www.sec.gov/Archives/edgar/data/1129928/000112992821000013/ex412employmentagreementth.htm)</u> |
| 4.9<sup>(c)</sup>\* | <u>[Amending Agreement, dated January 1, 2021 between Oncolytics Biotech Inc. and its Chief Executive Officer, Matthew Coffey](https://www.sec.gov/Archives/edgar/data/1129928/000112992821000013/ex413mattcoffeyamendment-e.htm)</u> |
| 4.10<sup>(c)</sup>\* | <u>[Amending Agreement, dated January 1, 2021 between Oncolytics Biotech Inc. and its Chief Financial Officer, Kirk Look](https://www.sec.gov/Archives/edgar/data/1129928/000112992821000013/ex414kirklookamendment-emp.htm)</u> |
| 4.11<sup>(c)</sup>\* | <u>[Amending Agreement, dated January 1, 2021 between Oncolytics Biotech Inc. and its Vice President, Product Development, Allison Hagerman](https://www.sec.gov/Archives/edgar/data/1129928/000112992821000013/ex415allisonhagermanamendm.htm)</u> |
| 4.12<sup>(c)</sup>\* | <u>[Amending Agreement, dated January 1, 2021 between Oncolytics Biotech (U.S.) Inc. and its President, Andrew de Guttadauro](https://www.sec.gov/Archives/edgar/data/1129928/000112992821000013/ex416andrewdeguttadauroame.htm)</u> |
| 4.13<sup>(c)</sup>\* | <u>[Amending Agreement, dated January 1, 2021 between Oncolytics Biotech (U.S.) Inc. and its Global Head of Clinical Development and Operations, Thomas C. Heineman](https://www.sec.gov/Archives/edgar/data/1129928/000112992821000013/ex417thomasheinemanamendme.htm)</u> |
| 4.14<sup>(d)</sup>\* | <u>[Amending Agreement, dated January 1, 2022 between Oncolytics Biotech Inc. and its Chief Executive Officer, Matthew Coffey](https://www.sec.gov/Archives/edgar/data/1129928/000112992822000017/ex418mattcoffeyamendment3-.htm)</u> |
| 4.15<sup>(d)</sup>\* | <u>[Amending Agreement, dated January 1, 2022 between Oncolytics Biotech Inc. and its Chief Financial Officer, Kirk Look](https://www.sec.gov/Archives/edgar/data/1129928/000112992822000017/ex419kirklookamendment3-em.htm)</u> |
| 4.16<sup>(d)</sup>\* | <u>[Amending Agreement, dated January 1, 2022 between Oncolytics Biotech Inc. and its Vice President, Product Development, Allison Hagerman](https://www.sec.gov/Archives/edgar/data/1129928/000112992822000017/ex420allisonhagermanamendm.htm)</u> |
| 4.17<sup>(d)</sup>\* | <u>[Amending Agreement, dated January 1, 2022 between Oncolytics Biotech (U.S.) Inc. and its President, Andrew de Guttadauro](https://www.sec.gov/Archives/edgar/data/1129928/000112992822000017/ex421andrewdeguttadauroame.htm)</u> |
| 4.18<sup>(d)</sup>\* | <u>[Amending Agreement, dated January 1, 2022 between Oncolytics Biotech (U.S.) Inc. and its Chief Medical Officer, Thomas C. Heineman](https://www.sec.gov/Archives/edgar/data/1129928/000112992822000017/ex422thomasheinemanamendme.htm)</u> |
| 4.19\* | <u>[Amending Agreement, dated January 1, 2023 between Oncolytics Biotech Inc. and its Chief Executive Officer, Matthew Coffey](ex419mattcoffeyamendment4-.htm)</u> |
| 4.20\* | <u>[Amending Agreement, dated January 1, 2023 between Oncolytics Biotech Inc. and its Chief Financial Officer, Kirk Look](ex420kirklookamendment4-em.htm)</u> |
| 4.21\* | <u>[Amending Agreement, dated January 1, 2023 between Oncolytics Biotech Inc. and its Vice President, Product Development, Allison Hagerman](ex421allisonhagermanamendm.htm)</u> |
| 4.22\* | <u>[Amending Agreement, dated January 1, 2023 between Oncolytics Biotech (U.S.) Inc. and its President, Andrew de Guttadauro](ex422andrewdeguttadauroame.htm)</u> |
| 4.23\* | <u>[Amending Agreement, dated January 1, 2023 between Oncolytics Biotech (U.S.) Inc. and its Chief Medical Officer, Thomas C. Heineman](ex423thomasheinemanamendme.htm)</u> |
|  | **Subsidiaries** |
| 8.0 | <u>[List of subsidiaries](ex80subsidiaries2022.htm)</u> |
|  | **Certifications** |
| 12.1 | <u>[Certificate of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex121ceocertification2022.htm)</u> |
| 12.2 | <u>[Certificate of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex122cfocertification2022.htm)</u> |
| 13.1 | <u>[Certificate of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ex131ceocertification2022.htm)</u> |
| 13.2 | <u>[Certificate of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ex132cfocertification2022.htm)</u> |
|  | **Other Exhibits** |
| 15.1 | <u>[The Registrant's Management's Discussion and Analysis for the Year Ended December 31, 2022](ex151-2022mda.htm)</u> |
| 15.2 | <u>[Consent of Ernst & Young LLP](ex152ey2022consent.htm)</u> |

---

---

| | |
|:---|:---|
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document. |
| 101.SCH | Inline XBRL Taxonomy Extension Schema. |
| 101.CAL | Inline XBRL Taxonomy Extension Scheme Calculation Linkbase. |
| 101.DEF | Inline XBRL Taxonomy Extension Scheme Definition Linkbase. |
| 101.LAB | Inline XBRL Taxonomy Extension Scheme Label Linkbase. |
| 101.PRE | Inline XBRL Taxonomy Extension Scheme Presentation Linkbase. |
| 104 | Cover page interactive data file (formatted as Inline XBRL and included in Exhibit 101) |

---

\* - Denotes management contract or agreement

# - Certain portions of this exhibit have been redacted pursuant to a confidential treatment request filed with the SEC on March 19, 2018

(a) Previously filed with the SEC on Form 20-F dated March 19, 2018, and incorporated by reference.

(b) Previously filed with the SEC on Form 20-F dated March 6, 2020, and incorporated by reference.

(c) Previously filed with the SEC on Form 20-F dated March 5, 2021, and incorporated by reference.

(d) Previously filed with the SEC on Form 20-F dated March 3, 2022, and incorporated by reference.

------

**SIGNATURE**

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

Date: March 3, 2023

**ONCOLYTICS BIOTECH INC.**

---

| | |
|:---|:---|
| <u>/s/Matthew Coffey&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> | <u>/s/Kirk Look&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>  |
| Dr. Matthew Coffey, PhD, MBA | Kirk Look, CA |
| President and Chief Executive Officer | Chief Financial Officer |

---

------

Consolidated Financial Statements

**Oncolytics Biotech**<sup>®</sup> **Inc.**

For the year ended December 31, 2022

------

**STATEMENT OF MANAGEMENT'S RESPONSIBILITY**

Management is responsible for the preparation and presentation of the consolidated financial statements, Management's Discussion and Analysis ("MD&A"), and all other information in the annual report.

In management's opinion, the accompanying consolidated financial statements have been properly prepared within reasonable limits of materiality and in accordance with the appropriately selected International Financial Reporting Standards as issued by the International Accounting Standards Board consistently applied and summarized in the consolidated financial statements.

The consolidated financial statements include estimates that are necessary when transactions affecting the current accounting period cannot be finalized with certainty until after the balance sheet date. Based on careful judgments by management, such estimates have been properly reflected in the accompanying consolidated financial statements. The financial information presented elsewhere in the annual report has been reviewed to ensure consistency with that in the consolidated financial statements. The MD&A also includes information regarding the impact of current transactions and events, sources of liquidity and capital resources, and risks and uncertainty. Actual results in the future may differ materially from our present assessment of this information because future events and circumstances may not occur as expected.

Systems of internal controls, including organizational and procedural controls and internal controls over financial reporting, assessed as reasonable and appropriate in the circumstances, are designed and maintained by management to provide reasonable assurance that assets are safeguarded from loss or unauthorized use and to produce reliable records for preparation of financial statements.

Ernst & Young LLP, an independent firm of Chartered Professional Accountants, has been engaged, as approved by a vote of the shareholders' at the Company's most recent Annual General Meeting, to audit and provide their independent audit opinion on the Company's consolidated financial statements as at and for the year ended December 31, 2022.

Ernst & Young has full and free access to our Board of Directors and its Committees to discuss audit, financial reporting, and related matters.

The Board of Directors is responsible for ensuring that management fulfills its responsibilities for financial reporting and internal control. The Board exercises this responsibility through the Audit Committee of the Board, which is comprised entirely of independent directors. This Committee meets with management and the external auditors to satisfy itself that management's responsibilities are properly discharged and to review the consolidated financial statements and MD&A before they are presented to the Board of Directors for approval. The consolidated financial statements have been approved by the Board on the recommendation of the Audit Committee.

---

| | |
|:---|:---|
| /s/Matthew Coffey&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; | /s/Kirk Look&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; |
| Dr. Matthew Coffey, PhD, MBA | Kirk Look, CA |
| President and Chief Executive Officer | Chief Financial Officer |

---

------

**Report of Independent Registered Public Accounting Firm**

To the Shareholders and the Board of Directors of Oncolytics Biotech Inc.

**Opinion on the Financial Statements**

We have audited the accompanying consolidated statements of financial position of Oncolytics Biotech Inc. (the "Company") as of December 31, 2022 and 2021, the related consolidated statements of loss and comprehensive loss, changes in equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matters**

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/Ernst & Young LLP

Chartered Professional Accountants

---

| |
|:---|
| We have served as the Company's auditor since 1999. |
| Calgary, Canada |
| March 2, 2023 |

---

------

**ONCOLYTICS BIOTECH INC.**

**CONSOLIDATED STATEMENTS OF FINANCIAL POSITION**

(in thousands of Canadian dollars, except share amounts)

---

| | | |
|:---|:---|:---|
| **As at December 31,** | **2022** | **2021** |
| **Assets** |  |  |
| **Current assets** |  |  |
| Cash and cash equivalents | $**11666** | $41262 |
| Marketable securities | **20472** |  |
| Other receivables (note 5) | **521** | 866 |
| Prepaid expenses (note 5) | **3025** | 2776 |
| **Total current assets** | **35684** | 44904 |
| Property and equipment (note 6) | **356** | 392 |
| Right-of-use assets (note 8) | **296** | 584 |
| Prepaid expenses (note 5) | **998** |  |
| **Total assets** | $**37334** | $45880 |
| **Liabilities And Shareholders' Equity** |  |  |
| **Current liabilities** |  |  |
| Accounts payable and accrued liabilities (note 7) | $**3650** | $1988 |
| Other liabilities (note 5) | **—** | 352 |
| Lease liabilities (note 8) | **216** | 294 |
| Warrant derivative (notes 9(b), 16) | **79** | 56 |
| **Total current liabilities** | **3945** | 2690 |
| Contract liability (note 12) | **6730** | 6730 |
| Lease liabilities (note 8) | **157** | 361 |
| **Total liabilities** | **10832** | 9781 |
| Commitments and contingencies (notes 13) |  |  |
| **Shareholders' equity** |  |  |
| Share capital (note 9)<br>&nbsp;&nbsp;&nbsp;&nbsp;Authorized: unlimited<br>&nbsp;&nbsp;&nbsp;&nbsp;Issued: December 31, 2022 – 61,327,914<br>&nbsp;&nbsp;&nbsp;&nbsp;December 31, 2021 – 55,043,789 | **404040** | 391348 |
| Warrants (note 9) | **—** | 3618 |
| Contributed surplus (note 10) | **40051** | 34161 |
| Accumulated other comprehensive income | **662** | 388 |
| Accumulated deficit | **(418251)** | (393416) |
| **Total shareholders' equity** | **26502** | 36099 |
| **Total liabilities and shareholders' equity** | $**37334** | $45880 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*See accompanying notes*

---

| | |
|:---|:---|
| On behalf of the Board: | |
| /s/Angela Holtham | /s/Wayne Pisano |
| Director | &nbsp;&nbsp;&nbsp;&nbsp;Director |

---

------

**ONCOLYTICS BIOTECH INC.**

**CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS**

(in thousands of Canadian dollars, except share amounts)

---

| | | | |
|:---|:---|:---|:---|
| **For the years ended December 31,** | **2022** | **2021** | **2020** |
| **Expenses** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development (note 19) | $**15432** | $12920 | $12945 |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative (note 19) | **11492** | 13315 | 12514 |
| **Loss before the following** | **(26924)** | (26235) | (25459) |
| &nbsp;&nbsp;&nbsp; Change in fair value of warrant derivative (notes 9(b), 16) | **(20)** | 17 | 3492 |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange gain (loss) | **1665** | (136) | (659) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income, net | **528** | 99 | 121 |
| **Loss before income taxes** | **(24751)** | (26255) | (22505) |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax expense (note 14) | **(84)** | (49) |  |
| **Net loss** | **(24835)** | (26304) | (22505) |
| **Other comprehensive income (loss) items that may be reclassified to net loss** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Translation adjustment | **274** | (12) | (64) |
| **Net comprehensive loss** | $**(24561)** | $(26316) | $(22569) |
| **Basic and diluted loss per common share (note 11)** | $**(0.43)** | $(0.49) | $(0.56) |
| **Weighted average number of shares (basic and diluted) (note 11)** | **58029745** | 53513225 | 40338789 |

---

*See accompanying notes*

------

**ONCOLYTICS BIOTECH INC.**

**CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY**

(in thousands of Canadian dollars)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Share Capital** | **Warrants** | **Contributed Surplus** | **Accumulated Other Comprehensive Income** | **Accumulated Deficit** | **Total** |
| As at December 31, 2019 | $311078 | $3618 | $29339 | $464 | $(344607) | $(108) |
| Net loss and other comprehensive loss |  |  |  | (64) | (22505) | (22569) |
| Issued pursuant to stock option plan (note 10) | 385 |  | (144) |  |  | 241 |
| Issued pursuant to incentive share award plan (note 10) | 732 |  | (732) |  |  |  |
| Issued pursuant to "At the Market" Agreement (note 9) | 40038 |  |  |  |  | 40038 |
| Issued pursuant to warrant derivative exercised (note 9) | 6333 |  |  |  |  | 6333 |
| Share-based compensation expense (note 10) |  |  | 2559 |  |  | 2559 |
| Share issue costs (note 9) | (1742) |  |  |  |  | (1742) |
| As at December 31, 2020 | $356824 | $3618 | $31022 | $400 | $(367112) | $24752 |
| Net loss and other comprehensive loss |  |  |  | (12) | (26304) | (26316) |
| Issued pursuant to stock option plan (note 10) | 381 |  | (143) |  |  | 238 |
| Issued pursuant to incentive share award plan (note 10) | 544 |  | (544) |  |  |  |
| Issued pursuant to "At the Market" Agreement (note 9) | 34168 |  |  |  |  | 34168 |
| Issued pursuant to warrant derivative exercised (note 9) | 687 |  |  |  |  | 687 |
| Share-based compensation expense (note 10) |  |  | 3826 |  |  | 3826 |
| Share issue costs (note 9) | (1256) |  |  |  |  | (1256) |
| As at December 31, 2021 | $391348 | $3618 | $34161 | $388 | $(393416) | $36099 |
| Net loss and other comprehensive income |  |  |  | 274 | (24835) | (24561) |
| Issued pursuant to stock option plan (note 10) | 20 |  | (8) |  |  | 12 |
| Issued pursuant to incentive share award plan (note 10) | 98 |  | (98) |  |  |  |
| Expiry of equity warrant agreement (note 9) |  | (3618) | 3618 |  |  |  |
| Issued pursuant to "At the Market" Agreement (note 9) | 13338 |  |  |  |  | 13338 |
| Share-based compensation expense (note 10) |  |  | 2378 |  |  | 2378 |
| Share issue costs (note 9) | (764) |  |  |  |  | (764) |
| **As at December 31, 2022** | $**404040** | $**—** | $**40051** | $**662** | $**(418251)** | $**26502** |

---

***&nbsp;&nbsp;&nbsp;&nbsp;****See accompanying notes*

------

**ONCOLYTICS BIOTECH INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

(in thousands of Canadian dollars)

---

| | | | |
|:---|:---|:---|:---|
| **For the years ended December 31,** | **2022** | **2021** | **2020** |
| **Operating Activities** |  |  |  |
| Net loss for the year | $**(24835)** | $(26304) | $(22505) |
| Depreciation - property and equipment (notes 6, 19) | **93** | 130 | 89 |
| Depreciation - right-of-use assets (notes 8, 19) | **299** | 322 | 357 |
| Share-based compensation expense (notes 10, 19, 20) | **2378** | 3826 | 2559 |
| Interest (income) expense, net | **(76)** | 92 | 69 |
| Unrealized foreign exchange (gain) loss | **(1625)** | 426 | 645 |
| Change in fair value of warrant derivative (note 16) | **20** | (17) | (3492) |
| Net change in non-cash working capital (note 17) | **391** | (908) | 210 |
| **Cash used in operating activities** | **(23355)** | (22433) | (22068) |
| **Investing Activities** |  |  |  |
| Acquisition of marketable securities | **(20348)** |  |  |
| Acquisition of property and equipment (note 6) | **(55)** | (286) | (29) |
| **Cash used in investing activities** | **(20403)** | (286) | (29) |
| **Financing Activities** |  |  |  |
| Proceeds from exercise of stock options (note 10) | **12** | 238 | 241 |
| Proceeds from exercise of warrants (note 9) | **—** | 231 | 1697 |
| Proceeds from "At the Market" equity distribution agreement (note 9) | **12574** | 32912 | 38296 |
| Payment of lease liabilities (note 8) | **(381)** | (366) | (461) |
| **Cash provided by financing activities** | **12205** | 33015 | 39773 |
| **(Decrease) increase in cash and cash equivalents** | **(31553)** | 10296 | 17676 |
| Cash and cash equivalents, beginning of year | **41262** | 31220 | 14148 |
| Impact of foreign exchange on cash and cash equivalents | **1957** | (254) | (604) |
| **Cash and cash equivalents, end of year** | $**11666** | $41262 | $31220 |

---

*See accompanying notes*

------

**ONCOLYTICS BIOTECH INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

For the year ended December 31, 2022

(in thousands of Canadian dollars, except share amounts and where indicated)

**Note 1: Nature of Operations**

Oncolytics Biotech Inc. was incorporated on April 2, 1998, under the Business Corporations Act (Alberta) as 779738 Alberta Ltd. On April 8, 1998, we changed our name to Oncolytics Biotech Inc. We are a limited company incorporated and domiciled in Canada. Our shares are publicly traded on the Nasdaq Capital Market and the Toronto Stock Exchange. Our principal place of business is located at 804, 322 11<sup>th</sup> Avenue S.W., Calgary, Alberta, Canada.

We are a clinical-stage biopharmaceutical company developing pelareorep, a safe and well-tolerated intravenously delivered immunotherapeutic agent that activates the innate and adaptive immune systems and weakens tumor defense mechanisms. This improves the ability of the immune system to fight cancer, making tumors more susceptible to a broad range of oncology treatments. Our primary focus is to advance our programs in hormone receptor-positive / human epidermal growth factor 2-negative (HR+/HER2-) metastatic breast cancer and advanced/metastatic pancreatic ductal adenocarcinoma to phase 3 licensure-enabling studies. In addition, we are exploring opportunities for registrational programs in gastrointestinal cancers through our GOBLET platform study.

We have not been profitable since our inception and expect to continue to incur substantial losses as we continue our research and development efforts. As at December 31, 2022, we had an accumulated deficit of $418,251. We do not expect to generate significant revenues until and unless pelareorep becomes commercially viable. To date, we have funded our operations mainly through the issuance of additional capital via public offerings, equity distribution arrangements, and the exercise of warrants and stock options. There can be no assurance that we will be able to raise additional funds through the sale of our common shares. Failure to raise additional capital would have a material adverse impact on our business, results of operations, and financial condition. As at December 31, 2022, we had cash and cash equivalents and marketable securities of $32,138. We believe we have sufficient existing cash resources to fund our presently planned operations for at least the next twelve months.

**Note 2: Basis of Presentation**

**Statement of compliance**

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

Our consolidated financial statements for the year ended December 31, 2022, were authorized for issue in accordance with a resolution of the Board of Directors (the "Board") on March 2, 2023.

**Basis of presentation**

Our consolidated financial statements include our financial statements and the financial statements of our subsidiaries, Oncolytics Biotech (Barbados) Inc. and Oncolytics Biotech (U.S.) Inc., and are presented in Canadian dollars, our functional currency.

Subsidiaries are entities over which we have control which is achieved when we are exposed, or have the rights, to variable returns from our involvement with the investee and have the ability to affect those returns through our power to govern. The accounting policies of our subsidiaries are consistent with our accounting policies and all intercompany transactions, balances, income, and expenses are eliminated on consolidation.

Our accounts are prepared on the historical cost basis, except for certain assets and liabilities which are measured at fair value as explained in the notes to these financial statements.

------

**ONCOLYTICS BIOTECH INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

For the year ended December 31, 2022

(in thousands of Canadian dollars, except share amounts and where indicated)

**Note 3: Summary of Significant Accounting Policies**

The consolidated financial statements have, in management's opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below.

**Cash and cash equivalents and marketable securities**

Cash equivalents include interest-bearing deposits with our bank totaling $9,501 as at December 31, 2022 (December 31, 2021 - $39,902). Marketable securities include foreign currency term deposits with a maturity of greater than 90 days and less than one year.

**Deferred income taxes**

We follow the liability method of accounting for income taxes. Under the liability method, deferred income taxes are recognized for the difference between the financial statement carrying values and the respective income tax basis of assets and liabilities (temporary differences). Deferred income tax assets and liabilities are measured using substantively enacted income tax rates and laws expected to apply in the years in which temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is charged or credited to income, except when it is related to items charged or credited to either other comprehensive income or directly to equity.

**Financial instruments** 

***Classification and measurement***

*Financial assets*

Financial assets are initially measured at fair value. In the case of a financial asset not at fair value through profit or loss, the financial asset is initially measured at fair value plus or minus transaction costs.

Financial assets are subsequently measured at amortised cost, fair value through profit or loss (FVPL), or fair value through other comprehensive income (FVOCI). The classification is based on two criteria: the Company's business model for managing the assets; and whether the financial asset's contractual cash flows represent 'solely payments of principal and interest' on the principal amount outstanding (the 'SPPI criterion').

Our financial assets include cash and cash equivalents, marketable securities, and other receivables. The classification and measurement of these financial assets are at amortized cost, as these assets are held within our business model with the objective to hold the financial assets in order to collect contractual cash flows that meet the SPPI criterion.

*Financial liabilities*

Financial liabilities are initially measured at fair value and are subsequently measured at amortised cost or FVPL. Our financial liabilities include accounts payable and accrued liabilities and warrant derivative. The classification and measurement of accounts payable and accrued liabilities are at amortized cost. The classification and measurement of the warrant derivative is at FVPL.

***Impairment***

Accounting for impairment losses for financial assets uses a forward-looking expected credit loss (ECL) approach. We are required to record a loss allowance for ECLs on all financial assets not held at FVPL. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive. The shortfall is then discounted at an approximation to the asset's original effective interest rate.

***Derecognition***

A financial asset is derecognized when the contractual rights to the cash flows from the financial asset expire, or we transfer the financial asset and substantially all the risks and rewards of ownership of the financial asset to another entity.

------

**ONCOLYTICS BIOTECH INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

For the year ended December 31, 2022

(in thousands of Canadian dollars, except share amounts and where indicated)

A financial liability is derecognized when our obligations specified in the contract are discharged or canceled, or expired.

***Fair Value Measurement***

Fair value is the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants, at the measurement date. In determining the fair value measurement of our financial instruments, we prioritize the related inputs used in measuring fair value into the following hierarchy:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable;

Level 3 - Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.

**Foreign currency translation**

The financial statements for each of our subsidiaries are prepared using their functional currency. Our functional and presentation currency is the Canadian dollar. Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Exchange differences resulting from the settlement of such transactions and from the translation at exchange rates ruling at the statement of financial position date of monetary assets and liabilities denominated in currencies other than the functional currency are recognized directly in the consolidated statement of loss and comprehensive loss.

Exceptions to this are where the monetary items form part of the net investment in a foreign operation, and the foreign operation's functional currency is the local currency. These exchange differences are initially recognized in equity. The statement of financial position of foreign operations is translated into Canadian dollars using the exchange rate at the statement of financial position date and the income statements are translated into Canadian dollars using the average exchange rate for the period. Where this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, the exchange rate on the transaction date is used. Exchange differences on translation into Canadian dollars are recognized as a separate component of equity. On disposal of a foreign operation, any cumulative exchange differences held in equity are transferred to the consolidated statement of loss and comprehensive loss.

**Leases**

At the inception of a contract, we assess whether a contract is, or contains a lease by determining whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, we assess whether:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the contract involves the use of an identified asset;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we have the right to obtain substantially all of the economic benefits from the use of the identified asset throughout the period of use; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we have the right to direct the use of the identified asset.

A right-of-use asset and corresponding lease liability are recognized on the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term. In addition, the right-of-use asset is reduced by impairment losses and adjusted for certain remeasurements of the lease liabilities, if any.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date. The lease payments are discounted using the implicit interest rate in the lease. If the rate cannot be readily determined, our incremental rate of borrowing is used. The lease liability is subsequently measured at amortized cost using the effective interest method. The lease liability is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in our estimate of the amount expected to be payable under a residual value guarantee, if we change our

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**ONCOLYTICS BIOTECH INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

For the year ended December 31, 2022

(in thousands of Canadian dollars, except share amounts and where indicated)

assessment of whether we will exercise a purchase, extension or termination option, or if the underlying lease contract is amended.

We have elected not to separate fixed non-lease components from lease components and instead account for each lease component and associated fixed non-lease components as a single lease component.

We have elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less. We recognize the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

**Loss per common share**

Basic loss per common share is determined using the weighted average number of common shares outstanding during the year.

We use the treasury stock method to calculate diluted loss per common share. Under this method, diluted loss per common share is computed in a manner consistent with basic loss per common share except that the weighted average common shares outstanding are increased to include additional common shares from the assumed exercise of options and warrants if dilutive. The number of additional common shares is calculated by assuming that any outstanding "in the money" options, restricted share units, performance share units, and warrants were exercised at the later of the beginning of the period or the date of issue and that the proceeds from such exercises were used to acquire shares of common stock at the average market price during the reporting period.

**Property and equipment** 

Property and equipment are recorded at cost. Depreciation is provided on bases and at rates designed to amortize the cost of the assets over their estimated useful lives. Depreciation is recorded using the declining balance method at the following annual rates:

---

| | |
|:---|:---|
| Office equipment and furniture | 20% |
| Medical equipment | 20% |
| Computer equipment | 30% |
| Leasehold improvements | Straight-line over the term of the lease |

---

**Research and development costs**

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. 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 an expense as the related goods are delivered or the related services are performed. 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 a regional licensing agreement (the "Licensing Agreement") with Adlai Nortye Biopharma Co., Ltd. ("Adlai"). The pricing for the contract was based on the specific negotiations with Adlai and included non-refundable upfront license fees, development and regulatory milestone payments, royalties, and sales-based milestone payments. We account for a contract with a customer 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 the 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 toward completion of the performance obligation using the input method. Under the input method, the extent of progress toward completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion

------

**ONCOLYTICS BIOTECH INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

For the year ended December 31, 2022

(in thousands of Canadian dollars, except share amounts and where indicated)

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.

The upfront license fee is not considered a significant financing component because it is used to meet working capital demands that can be higher in the early stages of a contract and to protect us from the other party failing to adequately complete some or all of its obligations under the contract.

Revenue from sales-based royalties and the achievement of annual sales volumes will be recognized when the subsequent sale occurs, as the license of the intellectual property is the predominant item to which the royalty relates. We consider payments associated with the achievement of annual sales volumes to be, in substance, royalty payments, and we will recognize such sales-based payments upon achievement of such sales volumes, provided that collection is reasonably assured.

***Contract liability*** - Our contract liability includes upfront license fees and billings in excess of the revenue recognized. Contract liabilities are recognized as revenue as or when we perform under the contract. We classify our contract liability as current or non-current based on the timing of when we expect to recognize revenue.

**Share-based compensation** 

***Stock option plan***

We have one stock option plan (the "Option Plan") available to officers, directors, employees, and consultants with grants under the Option Plan approved from time to time by our Board of Directors (the "Board"). Under the Option Plan, the exercise price of each option is set at equal to or higher than the trading price of our stock on the date of grant in accordance with Toronto Stock Exchange guidelines. Vesting is provided at the discretion of the Board, and the expiration of options is to be no greater than ten years from the date of grant. Exercised stock options are settled with common shares issued from treasury.

We use the fair value-based method of accounting for stock option awards granted under the Option Plan. We recognize compensation expense and a corresponding adjustment to contributed surplus equal to the fair value of the stock options granted using the Black-Scholes valuation model and is recognized over the vesting periods of the respective options. Compensation expense is adjusted for subsequent changes in management's estimate of the number of options that are expected to vest.

***Incentive share award plan***

Our incentive share award plan (the "Share Plan") is available to directors, officers, and employees. Under our Share Plan, performance and restricted share units may be approved from time to time by the Board. Performance share units ("PSUs") are awarded to certain officers and employees to which common shares shall be issued based upon achieving the applicable performance criteria. Restricted share units ("RSUs") are awarded to certain officers and employees and non-employee directors to which common shares shall be issued in accordance with the Share Plan.

We recognize compensation expense and a corresponding adjustment to contributed surplus equal to the market value of our common shares at the grant date based on the number of PSUs/RSUs expected to vest, recognized over the vesting period. Compensation expense is adjusted for subsequent changes in management's estimate of the number of PSUs/RSUs that are expected to vest. The effect of these changes is recognized in the period of the change.

------

**ONCOLYTICS BIOTECH INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

For the year ended December 31, 2022

(in thousands of Canadian dollars, except share amounts and where indicated)

**Accounting Standards and Interpretations Issued but Not Yet Effective**

**IAS 1 *Presentation of Financial Statements***

In February 2021, the IASB issued amendments to IAS 1 *Presentation of Financial Statements* and IFRS Practice Statement 2 *Making Materiality Judgements,* in which it provides guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments apply to annual reporting periods beginning on or after January 1, 2023, with earlier application permitted. The adoption of this standard is not expected to have a material impact on our consolidated financial statements.

**IAS 8 *Accounting Policies, Changes in Accounting Estimates and Errors***

In February 2021, the IASB issued amendments to IAS 8, in which it introduced a new definition of 'accounting estimates'. The amendments clarify the distinction between changes in accounting estimates and changes in accounting policies, and the correction of errors. Also, the amendments clarify how entities use measurement techniques and inputs to develop accounting estimates. The amendments apply to annual reporting periods beginning on or after January 1, 2023, with earlier application permitted. The adoption of this standard is not expected to have a material impact on our consolidated financial statements.

**IAS 12 *Income Taxes*** 

In May 2021, the IASB issued amendments to IAS 12, which narrowed the scope of the initial recognition exception under IAS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences. The amendments apply to annual reporting periods beginning on or after January 1, 2023, with earlier application permitted. The amendments apply prospectively to transactions that occur on or after the beginning of the earliest comparative period presented. The adoption of this standard is not expected to have a material impact on our consolidated financial statements.

**Note 4: Significant Judgments, Estimates, and Assumptions**

The full extent to which external factors outside of our control, including those related to the coronavirus infectious disease 2019 ("COVID-19") pandemic and the global political conflict in Ukraine, may directly or indirectly impact our business, results of operations and financial condition, including our ability to finance our operations, expenses, clinical trials, and research and development costs, will depend on future developments that are evolving and highly uncertain. We considered the potential impact of these events, including global supply chain disruptions, inflation, and rising interest rates, when making certain estimates and judgments relating to the preparation of these audited consolidated financial statements. While there was no material impact to our consolidated financial statements as of and for the year ended December 31, 2022, our future assessment of the magnitude and duration of COVID-19 and conflict in Ukraine, as well as other factors, could result in a material impact to our consolidated financial statements in future reporting periods.

***Judgments***

The preparation of our consolidated financial statements requires us to make judgments, estimates, and assumptions that affect the reported amount of revenue, expenses, assets, liabilities, and the disclosure of contingent liabilities at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

***Estimates and assumptions***

Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates, and such differences could be material. Significant estimates made by management affecting our consolidated financial statements include:

------

**ONCOLYTICS BIOTECH INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

For the year ended December 31, 2022

(in thousands of Canadian dollars, except share amounts and where indicated)

*Revenue recognition*

We entered into a Licensing Agreement which provides, among other payments, 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 toward 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 and manufacturing expenses*

Clinical trial and manufacturing expenses represent significant components of our research and development expenses, and we outsource a significant portion of these activities to third-party contract research/manufacturing 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 achieving certain milestones. As part of preparing the consolidated financial statements, we estimate the expense to recognize based on services that the contract research/manufacturing organizations have performed. 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.

*Valuation of share-based compensation* 

Estimating the fair value for stock options granted requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model, including the expected life, share price volatility, and dividend yield, and making assumptions about them. The assumptions and inputs used for estimating fair value for stock options granted are disclosed in Note 10.

*Valuation of warrant derivative* 

Estimating the 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. This estimate also requires determining the most appropriate inputs to the valuation model, including the expected life, share price volatility, and dividend yield, and making assumptions about them.

*Income taxes*

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Currently, we are accumulating tax loss carry-forward balances in various tax jurisdictions creating a deferred tax asset. Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Management's judgment is required to determine the amount of deferred tax assets that can be recognized based on the likely timing and the level of future taxable profits together with future tax planning strategies.

To date, we have determined that none of our deferred tax assets should be recognized. Our deferred tax assets are mainly comprised of our net operating losses from prior years, prior year research and development expenses, and non-refundable investment tax credits. These tax pools relate to entities that have a history of losses, have varying expiry dates, and may not be used to offset taxable income within our other subsidiaries. There are also no taxable temporary differences or any tax planning opportunities available that could partly support the recognition of these losses as deferred tax assets.

**Note 5: Other Assets and Liabilities** 

(a)In 2019, we entered into a co-development agreement with Merck KGaA, Darmstadt, Germany, and Pfizer Inc ("Pfizer"), known as BRACELET-1. This phase 2 clinical trial is jointly funded by Oncolytics and Pfizer. As at December 31, 2022, we recorded US$360 ($488) (December 31, 2021 - US$617 ($782)) in other receivables related to unbilled BRACELET-1 cost from Pfizer and nil (December 31, 2021 - US$278 ($352)) in other liabilities representing unused payments received from Pfizer.

------

**ONCOLYTICS BIOTECH INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

For the year ended December 31, 2022

(in thousands of Canadian dollars, except share amounts and where indicated)

(b)In 2022, we paid deposits to our manufacturer related to the production of pelareorep required for our clinical trial program. We classify the related prepaid expenses as current or non-current based on the timing of when we expect to receive services. As at December 31, 2022, we recorded $1,327 in current prepaid expenses and $998 in non-current prepaid expenses.

**Note 6: Property and Equipment**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Medical Equipment** | **Computer Equipment** | **Office Equipment and Furniture** | **Leasehold Improvements** | **Total** |
| **Cost** | | | | | |
| As at December 31, 2020 | $62 | $366 | $353 | $497 | $1278 |
| Additions, net of foreign exchange impact |  | 40 | 141 | 105 | 286 |
| Disposals |  |  | (277) | (374) | (651) |
| As at December 31, 2021 | 62 | 406 | 217 | 228 | 913 |
| Additions, net of foreign exchange impact |  | 23 | 31 | 3 | 57 |
| **As at December 31, 2022** | $62 | $429 | $248 | $231 | $970 |
| **Amortization** |  |  |  |  |  |
| As at December 31, 2020 | $48 | $249 | $263 | $482 | $1042 |
| Depreciation expense | 3 | 36 | 72 | 19 | 130 |
| Disposals |  |  | (277) | (374) | (651) |
| As at December 31, 2021 | 51 | 285 | 58 | 127 | 521 |
| Depreciation expense | 2 | 36 | 34 | 21 | 93 |
| **As at December 31, 2022** | $53 | $321 | $92 | $148 | $614 |
| **Net book value** |  |  |  |  |  |
| As at December 31, 2021 | 11 | 121 | 159 | 101 | 392 |
| **As at December 31, 2022** | $**9** | $**108** | $**156** | $**83** | $**356** |

---

**Note 7: Accounts payable and accrued liabilities**

---

| | | |
|:---|:---|:---|
| | **December 31, 2022** | **December 31, 2021** |
| Trade payables | $**2252** | $594 |
| Accrued liabilities | **1398** | 1394 |
|  | $**3650** | $1988 |

---

------

**ONCOLYTICS BIOTECH INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

For the year ended December 31, 2022

(in thousands of Canadian dollars, except share amounts and where indicated)

**Note 8: Leases**

Our portfolio of leases consists of office spaces with lease terms generally between 3 to 6 years. We currently do not have leases with residual value guarantees or leases not yet commenced to which we are committed. We have variable lease payments related to office space lease operating costs that are not material. Lease liabilities have been measured by discounting future lease payments using our incremental borrowing rate as rates implicit in the leases were not readily determinable. The weighted-average rate applied was 15%.

In 2021, we recorded an addition for a new office space lease for our Canadian head office and a lease modification related to the office lease extension for one of our subsidiaries.

The following table summarizes our right-of-use assets activity for the years ended December 31:

---

| | | |
|:---|:---|:---|
| | **2022** | **2021** |
| As at beginning of year | $**584** | $372 |
| Additions | **—** | 210 |
| Lease modification | **—** | 324 |
| Depreciation expense | **(299)** | (322) |
| Foreign exchange impact | **11** |  |
| As at end of year | $**296** | $584 |

---

The following table summarizes our lease liabilities activity for the years ended December 31:

---

| | | |
|:---|:---|:---|
| | **2022** | **2021** |
| As at beginning of year | $**655** | $402 |
| Additions | **—** | 203 |
| Lease modification | **—** | 324 |
| Payment of lease liabilities | **(381)** | (366) |
| Interest expense on lease liabilities | **80** | 92 |
| Foreign exchange impact | **19** |  |
| As at end of year | $**373** | $655 |

---

Our total undiscounted lease liability as at December 31, 2022 was as follows:

---

| | |
|:---|:---|
| | **December 31, 2022** |
| Less than one year | $251 |
| One to five years | 196 |
| More than five years |  |
| Total undiscounted lease liability | $447 |

---

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**ONCOLYTICS BIOTECH INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

For the year ended December 31, 2022

(in thousands of Canadian dollars, except share amounts and where indicated)

**Note 9: Share Capital**

**Authorized:**

Unlimited number of no par value common shares

---

| | | |
|:---|:---|:---|
| | **Shares** | **Shares** |
| | **Number** | **Amount** |
| As at December 31, 2019 | 32198453 | $311078 |
| Issued pursuant to stock option plan | 133454 | 385 |
| Issued pursuant to incentive share award plan | 234172 | 732 |
| Issued pursuant to "At the Market" (ATM) equity distribution agreement<sup>(a)(c)</sup> | 12182532 | 40038 |
| Issued pursuant to warrant derivative exercised<sup>(b)</sup> | 1418369 | 6333 |
| Share issue costs |  | (1742) |
| As at December 31, 2020 | 46166980 | $356824 |
| Issued pursuant to stock option plan | 123159 | 381 |
| Issued pursuant to incentive share award plan | 150899 | 544 |
| Issued pursuant to "At the Market" (ATM) equity distribution agreement<sup>(c)(d)</sup> | 8401029 | 34168 |
| Issued pursuant to warrant derivative exercised<sup>(b)</sup> | 201722 | 687 |
| Share issue costs |  | (1256) |
| As at December 31, 2021 | 55043789 | $391348 |
| Issued pursuant to stock option plan | 8333 | 20 |
| Issued pursuant to incentive share award plan | 40560 | 98 |
| Issued pursuant to "At the Market" (ATM) equity distribution agreement<sup>(d)(e)</sup> | 6235232 | 13338 |
| Share issue costs |  | (764) |
| **As at December 31, 2022** | **61327914** | $**404040** |

---

(a)On October 24, 2018, we entered into an ATM equity offering sales agreement with Canaccord Genuity Inc. The ATM allowed us to issue common shares, at prevailing market prices, with an aggregate offering value of up to US$30,000 over a 19-month period through the facilities of the Nasdaq Capital Market in the United States. This sales agreement expired on June 4, 2020. In 2020, we sold 6,741,518 common shares for gross proceeds of US$17,538 at an average price of US$2.42. We received, net of commissions of US$526, proceeds of US$17,012. In total, we incurred share issue costs (including commissions) of $857.

(b)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. 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. These warrants were classified as a financial liability (see Note 16). Each common share purchase warrant entitled the holder to purchase one common share at an exercise price of US$0.90 until August 16, 2024. In 2022, no warrants were exercised. In 2021, 201,722 (2020 - 1,418,369) warrants with a fair value of $456 (2020 - $4,636) were exercised for gross proceeds of US$182 (2020 - US$1,277). As at December 31, 2022, there were 64,035 warrants outstanding (December 31, 2021 - 64,035).

(c)On June 15, 2020, we entered into an ATM equity distribution agreement with Canaccord Genuity Inc. The ATM allowed us to issue common shares, at prevailing market prices, with an aggregate offering value of up US$40,000 over a 25-month period through the facilities of the Nasdaq Capital Market in the United States. This sales agreement was terminated on March 4, 2021. In 2021, we sold 5,685,097 (2020 - 5,441,014) common shares for gross proceeds of US$18,503 (2020 - US$12,629) at an average price of US$3.25 (2020 - US$2.11). We received, net of commissions of US$555 (2020 - US$379), proceeds of US$17,948 (2020 - US$12,250). In total, we incurred share issue costs (including commissions) of $707 (2020 - $885).

(d)On March 5, 2021, we entered into an ATM equity distribution agreement with Canaccord Genuity Inc. The ATM allows us to issue common shares, at prevailing market prices, with an aggregate offering value of up to US$80,000 over a 16-

------

**ONCOLYTICS BIOTECH INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

For the year ended December 31, 2022

(in thousands of Canadian dollars, except share amounts and where indicated)

month period through the facilities of the Nasdaq Capital Market in the United States. In 2022, we sold 2,719,770 (2021 - 2,715,932) common shares for gross proceeds of US$4,560 (2021 - US$8,655) at an average price of US$1.68 (2021 - US$3.19). We received, net of commissions of US$137 (2021 - US$260), proceeds of US$4,423 (2021 - US$8,395). In total, we incurred share issue costs (including commissions) of $209 (2021 - $549). This sales agreement was terminated on June 16, 2022.

(e)On June 17, 2022, we entered into an ATM equity distribution agreement with Canaccord Genuity Inc. The ATM allows us to issue common shares, at prevailing market prices, with an aggregate offering value of up to US$65,000 over a 25-month period through the facilities of the Nasdaq Capital Market in the United States. In 2022, we sold 3,515,462 common shares for gross proceeds of US$5,632 at an average price of US$1.60. We received, net of commissions of US$169, proceeds of US$5,463. In total, we incurred share issue costs (including commissions) of $555.

***Equity Warrants***

On June 1, 2017, pursuant to an underwritten public offering, 16,445,000 units were sold for gross proceeds of $11,512. Each unit included one common share and one common share purchase warrant. Following the 2018 share consolidation, 9.5 common share purchase warrants entitled the holder to purchase one common share in the capital of the Company until June 1, 2022, at an exercise price of approximately $9.025. These warrants were classified as equity. These warrants expired on June 1, 2022, and were transferred to contributed surplus on the consolidated statement of financial position upon expiry. There was no cash flow impact as a result of the warrant expiry.

The following table summarizes our outstanding equity warrants:

---

| | | |
|:---|:---|:---|
| | **Number of Warrants Outstanding** | **Warrant** |
| As at December 31, 2019 | 16445000 | $3618 |
| As at December 31, 2020 | 16443500 | $3618 |
| As at December 31, 2021 | 16443500 | $3618 |
| Expired | (16443500) | (3618) |
| **As at December 31, 2022** | **—** | $**—** |

---

**Note 10: Share-Based Compensation**

**Stock Option Plan** 

We have granted stock options to acquire common stock through our stock option plan. Our stock option activity for the years ended December 31 was as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2022** | **2022** | **2021** | **2021** | **2020** | **2020** |
| | **Number of options** | **Weighted Average Exercise Price<br>$** | **Number of options** | **Weighted Average Exercise Price<br>$** | **Number of options** | **Weighted Average Exercise Price<br>$** |
| Outstanding, beginning of year | **5334420** | **3.53** | 3764055 | 4.08 | 2246947 | 5.31 |
| Granted | **1005000** | **2.04** | 1832500 | 2.99 | 1817500 | 3.19 |
| Forfeited | **(62962)** | **3.83** | (110612) | 6.21 | (141418) | 3.84 |
| Expired | **(304940)** | **10.80** | (28364) | 37.63 | (25520) | 62.49 |
| Exercised | **(8333)** | **1.45** | (123159) | 1.94 | (133454) | 1.81 |
| Outstanding, end of year | **5963185** | **2.91** | 5334420 | 3.53 | 3764055 | 4.08 |
| Exercisable, end of year | **4420482** | **3.01** | 3165679 | 3.82 | 2164551 | 4.84 |

---

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**ONCOLYTICS BIOTECH INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

For the year ended December 31, 2022

(in thousands of Canadian dollars, except share amounts and where indicated)

The following table summarizes information about the stock options outstanding and exercisable at December 31, 2022:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Range of Exercise Prices** | **Number Outstanding** | **Weighted Average Remaining Contractual Life (years)** | **Weighted Average Exercise Price<br>$** | **Number Exercisable** | **Weighted Average Exercise Price<br>$** |
| $0.54 - $1.89 | 1002498 | 1.76 | 1.39 | 799998 | 1.40 |
| $1.90 - $3.05 | 1724442 | 3.31 | 2.34 | 1001738 | 2.37 |
| $3.06 - $3.29 | 1532500 | 1.95 | 3.17 | 1532500 | 3.17 |
| $3.30 - $3.75 | 1393131 | 2.87 | 3.42 | 775632 | 3.43 |
| $3.76 - $27.46 | 310614 | 2.19 | 7.39 | 310614 | 7.39 |
|  | 5963185 | 2.54 | 2.91 | 4420482 | 3.01 |

---

Option grants vest either immediately or annually over periods ranging from one to three years.

We use the Black-Scholes valuation model to estimate fair value. We use historical data to estimate the expected dividend yield and expected volatility of our stock in determining the fair value of the stock options. The risk-free interest rate is based on the Government of Canada benchmark bond yield rates in effect at the time of grant and the expected life of the options represents the estimated length of time the options are expected to remain outstanding.

The estimated fair value of stock options granted during the years ended December 31 were determined using the following weighted average assumptions:

---

| | | | |
|:---|:---|:---|:---|
| | **2022** | **2021** | **2020** |
| Risk-free interest rate | **3.35%** | 0.66% | 0.34% |
| Expected life | **3.0 years** | 3.0 years | 3.0 years |
| Expected share price volatility | **96.02%** | 110.45% | 110.82% |
| Expected dividend yield | **Nil** | Nil | Nil |
| Weighted average fair value of options | **$1.24** | $1.99 | $2.12 |

---

**Incentive Share Award Plan**

*Restricted Share Units*

We have granted RSUs to non-employee directors through our incentive share award plan. Grants of RSUs to non-employee directors vest either immediately, on the third anniversary date from the grant date, or when the director ceases to be a member of the board. We have also granted RSUs to certain officers and employees of the Company. Grants of RSUs to certain officers and employees of the Company vest over a three-year period.

Our RSU activity for the years ended December 31 was as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **2022** | **2021** | **2020** |
| Outstanding, beginning of year | **40560** | 134618 | 209657 |
| Granted | **—** |  | 154923 |
| Released | **(40560)** | (94058) | (229962) |
| Outstanding, end of year | **—** | 40560 | 134618 |

---

(1) The weighted average fair value of the RSUs granted was nil in 2022 (2021 - nil; 2020 - $2.41).

We have reserved 6,132,791 common shares for issuance relating to our outstanding equity compensation plans. Our share-based compensation expense for the year ended December 31, 2022, was $2,378 (2021 - $3,826; 2020 - $2,559).

------

**ONCOLYTICS BIOTECH INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

For the year ended December 31, 2022

(in thousands of Canadian dollars, except share amounts and where indicated)

**Note 11: Loss Per Common Share**

Loss per common share is calculated by dividing net loss for the year by the weighted average number of common shares outstanding for the year ended December 31, 2022, of 58,029,745 (2021 - 53,513,225; 2020 - 40,338,789). 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.

**Note 12: Contract Liability**

*Regional licensing agreement*

We entered into a regional licensing agreement (the "Licensing Agreement") with Adlai Nortye Biopharma Co., Ltd. ("Adlai") in November 2017. 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. We are entitled to receive upfront license fees, development and regulatory milestone payments, royalties, and sales-based milestone payments.

*Contract liability*

Our contract liability balance at December 31, which we expect to record in revenue over the next five years, is as follows:

---

| | | |
|:---|:---|:---|
| | **2022** | **2021** |
| Balance, beginning of year | $**6730** | $6730 |
| Revenue recognized | **—** |  |
| Balance, end of year | $**6730** | $6730 |

---

**Note 13: Commitments and Contingencies** 

We are committed to payments totaling approximately $16,775 for activities mainly related to our clinical trial and manufacturing programs, which are expected to occur over the next three years. We are able to cancel most of these agreements with notice.

*Indemnification of Officers and Directors*

Our corporate by-laws require that, except to the extent expressly prohibited by law, we will indemnify our officers and directors against all costs, charges, and expenses, including an amount paid to settle an action or satisfy a judgment reasonably incurred in respect of any civil, criminal, or administrative action or proceeding as it relates to their services to the Company. The by-laws provide no limit to the amount of the indemnification. We have purchased directors' and officers' insurance coverage to cover claims made against the directors and officers during the applicable policy periods. The amounts and types of coverage have varied from period to period as dictated by market conditions. We believe that we have adequate insurance coverage; however, there is no guarantee that all indemnification payments will be covered under our existing insurance policies.

There is no pending litigation or proceeding involving any of our officers or directors as to which indemnification is being sought, nor are we aware of any threatened litigation that may result in claims for indemnification

------

**ONCOLYTICS BIOTECH INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

For the year ended December 31, 2022

(in thousands of Canadian dollars, except share amounts and where indicated)

**Note 14: Income Taxes**

The provision for income taxes recorded in the consolidated financial statements differs from the amount which would be obtained by applying the statutory income tax rate to the loss before income taxes as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **2022** | **2021** | **2020** |
| Loss before income taxes | $**(24751)** | $(26255) | $(22505) |
| Statutory Canadian corporate tax rate | **23.00%** | 23.00% | 24.00% |
| Anticipated tax recovery | **(5693)** | (6039) | (5401) |
| Difference in tax rates | **3552** | 2716 | 3334 |
| Share-based compensation expense | **547** | 880 | 614 |
| Revaluation of tax pools | **(338)** | (552) | 21 |
| Other permanent differences | **(368)** | 45 | 108 |
| Expiry of tax benefits | **1614** | 1661 |  |
| Change in fair value of warrant derivative | **5** | (4) | (838) |
| Provision to offset deferred tax asset | **765** | 1342 | 2162 |
| Current income taxes | $**84** | $49 | $— |

---

At December 31, 2022, we have non-capital losses of $98,475 and $145,405 in Canada and Barbados, respectively (December 31, 2021 - $89,537 and $162,986, respectively). These losses are expected to expire between 2023 and 2042, if not utilized. At December 31, 2022, we have Canadian investment tax credits of $4,368 (December 31, 2021 - $4,834) that are expected to expire between 2023 and 2040, if not utilized. As well, we have unclaimed Canadian scientific research and experimental development expenditures available to reduce future years' taxable income of $27,663 (December 31, 2021 - $27,663). We also have unclaimed U.S. credits for increasing research activities available to reduce future years' taxable income of $1,285 (December 31, 2021 - $1,343) expiring between 2031 and 2041. We have not recorded the potential benefits of these tax pools in these consolidated financial statements.

Deferred tax assets are recognized, to the extent that it is probable that taxable income will be available to utilize the deductible temporary differences. The components of our unrecognized deferred tax asset are as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **2022** | **2021** | **2020** |
| Non-capital losses carried forward | $**26726** | $25158 | $21488 |
| Scientific research and experimental development | **7648** | 7705 | 6362 |
| Investment tax credits | **3363** | 3716 | 4068 |
| Property and equipment | **366** | 351 | 1928 |
| Share issue costs | **518** | 648 | 689 |
| Net capital losses carried forward | **6** | 6 | 6 |
| Unrecognized deferred tax asset | $**38627** | $37584 | $34541 |

---

The Company currently files income tax returns in the various jurisdictions in which it operates. These tax returns are subject to periodic examinations in the normal course by the applicable tax authorities. Management is not aware of any material income tax examinations currently in progress by any taxing jurisdiction.

**Note 15: Capital Disclosures**

Our objective when managing capital is to maintain a strong statement of financial position. We achieve our objective by obtaining adequate cash resources to support planned activities which include the clinical trial program, product manufacturing, administrative costs, and intellectual property expansion and protection. We include shareholders' equity, cash and cash equivalents, and marketable securities in the definition of capital.

------

**ONCOLYTICS BIOTECH INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

For the year ended December 31, 2022

(in thousands of Canadian dollars, except share amounts and where indicated)

---

| | | |
|:---|:---|:---|
| | **December 31, 2022** | **December 31, 2021** |
| Cash and cash equivalents | $**11666** | $41262 |
| Marketable securities | $**20472** | $— |
| Shareholders' equity | $**26502** | $36099 |

---

We have no debt other than accounts payable and accrued liabilities and lease liabilities. We also have commitments and potential contingent obligations relating to the completion of our research and development of pelareorep.

In managing our capital, we estimate our future cash requirements by preparing a budget and a multi-year plan annually for review and approval by our Board. The budget establishes the approved activities for the upcoming year and estimates the costs associated with these activities. The multi-year plan estimates future activity along with the potential cash requirements and is based on our assessment of our current clinical trial progress along with the expected results from the coming year's activity. Budget to actual variances are prepared and reviewed by management and are presented quarterly to the Board.

Historically, funding for our plan is primarily managed through the issuance of additional common shares and common share purchase warrants that upon exercise are converted to common shares. Management regularly monitors the capital markets attempting to balance the timing of issuing additional equity with our progress through our clinical trial program, general market conditions, and the availability of capital. There are no assurances that funds will be made available to us when required.

On June 12, 2022, we renewed our short form base shelf prospectus (the "Base Shelf") that qualifies for distribution of up to $150,000 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. We may also 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 required to close a financing and is expected to increase the number of potential investors that may be prepared to invest in the 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 16, 2024.

Our Base Shelf allowed us to enter into our ATM equity distribution agreements (see Note 9). We use these equity arrangements to assist us in achieving our capital objective. These arrangements provide us with the opportunity to raise capital and better manage our cash resources.

We are not subject to externally imposed capital requirements, and there have been no changes in how we define or manage our capital in 2022.

**Note 16: Financial Instruments**

**Fair value of financial instruments**

Our financial instruments consist of cash and cash equivalents, marketable securities, other receivables, accounts payable and accrued liabilities, and warrant derivative. As at December 31, 2022, the carrying amount of our cash and cash equivalents, marketable securities, other receivables, and accounts payable and accrued liabilities approximated their fair value due to their short-term maturity.

Warrants with an exercise price denominated in a currency that differs from an entity's functional currency are treated as a derivative, initially measured at fair value, with subsequent changes in fair value at each reporting period end recognized through profit and loss. Our warrants with an exercise price of US$0.90 (see Note 9(b)) meet this requirement, and we have presented the fair value of these warrants as a current liability on the consolidated statement of financial position. As these warrants are exercised, the fair value at the date of exercise and the associated non-cash liability will be included in our share

------

**ONCOLYTICS BIOTECH INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

For the year ended December 31, 2022

(in thousands of Canadian dollars, except share amounts and where indicated)

capital along with the proceeds from the exercise. If these warrants expire, the non-cash warrant liability is reversed through the consolidated statement of loss and comprehensive loss. There is no cash flow impact as a result of the accounting treatment for changes in the fair value of the warrant derivative or when warrants expire unexercised. 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, 2022, the fair value of our warrant derivative was $79 (December 31, 2021 - $56). We use the Black-Scholes valuation model to estimate fair value.

**Financial risk management**

***Credit risk***

Credit risk is the risk of a 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, marketable securities, and other receivable from Pfizer in connection with the BRACELET-1 study (see Note 5) 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, marketable securities, and other receivable from Pfizer.

We mitigate our exposure to credit risk connected to our cash and cash equivalents 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. Our foreign bank accounts are used solely for the purpose of settling accounts payable and accrued liabilities or payroll.

We also mitigate our exposure to credit risk by restricting our portfolio to investment-grade securities with short-term maturities and monitoring counterparties' credit risk and credit standing.

***Interest rate risk***

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. We hold our cash and cash equivalents in bank accounts or high-interest savings accounts that have variable interest rates. Our marketable securities have fixed interest rates. We mitigate interest rate risk through our investment policy that only allows the investment of excess cash resources in investment-grade vehicles while matching maturities with our operational requirements.

Fluctuations in market interest rates 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 and the 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 2022 by approximately $170. The impact of a $0.01 increase in the value of the Euro against the Canadian dollar would have increased our net comprehensive loss in 2022 by approximately $22.

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 and accrued liabilities.

Significant balances in foreign currencies at December 31, 2022, are as follows:

---

| | | |
|:---|:---|:---|
| | **U.S. dollar** | **Euro** |
| Cash and cash equivalents | $6635 | $— |
| Marketable securities | 15115 |  |
| Accounts payable and accrued liabilities | (1093) | (1035) |
|  | $20657 | $(1035) |

---

------

**ONCOLYTICS BIOTECH INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

For the year ended December 31, 2022

(in thousands of Canadian dollars, except share amounts and where indicated)

***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 Note 15. Accounts payable and accrued liabilities are all due within the current operating period.

**Note 17: Additional Cash Flow Disclosures**

**Net Change In Non-Cash Working Capital**

---

| | | | |
|:---|:---|:---|:---|
| | **2022** | **2021** | **2020** |
| *Change in:* |  |  |  |
| Other receivables | $**345** | $(776) | $1979 |
| Prepaid expenses and deposits | **(1247)** | (349) | 286 |
| Accounts payable and accrued liabilities | **1662** | 183 | (1368) |
| Other liabilities | **(352)** | 228 | (723) |
| Non-cash impact of foreign exchange | **(17)** | (194) | 36 |
| Change in non-cash working capital related to operating activities | $**391** | $(908) | $210 |

---

**Other Cash Flow Disclosures**

---

| | | | |
|:---|:---|:---|:---|
| | **2022** | **2021** | **2020** |
| Cash interest received | $**452** | $190 | $190 |
| Cash taxes paid | $**46** | $35 | $12 |

---

**Note 18: Economic Dependence**

We are economically dependent on our toll manufacturers. We primarily use one toll manufacturer in the U.S. to produce the clinical-grade pelareorep active ingredient and a second toll manufacturer to formulate finished product required for our clinical trial program. Any significant disruption of the services provided by our primary toll manufacturers has the potential to delay the progress of our clinical trial program. We have used another toll manufacturer in the U.K. that has also produced clinical-grade pelareorep at a smaller scale. We have attempted to mitigate this risk by identifying an alternative toll manufacturer, establishing stability profiles for long-term storage of pelareorep, and producing sufficient pelareorep in advance of patient enrollment in a particular clinical trial.

------

**ONCOLYTICS BIOTECH INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

For the year ended December 31, 2022

(in thousands of Canadian dollars, except share amounts and where indicated)

**Note 19: Components of Expenses**

---

| | | | |
|:---|:---|:---|:---|
| | **2022** | **2021** | **2020** |
| **Research and development expenses** |  |  |  |
| Clinical trial expenses | $**4970** | $3205 | $3055 |
| Manufacturing & related process development expenses | **2148** | 1547 | 3384 |
| Intellectual property expenses | **544** | 618 | 907 |
| Translational science expenses | **264** | 673 | 318 |
| Personnel-related expenses | **6023** | 4754 | 4135 |
| Share-based compensation expense | **1371** | 2087 | 1043 |
| Other expenses | **112** | 36 | 103 |
|  | $**15432** | $12920 | $12945 |
| **General and administrative expenses** |  |  |  |
| Public company-related expenses | $**6790** | $8161 | $7432 |
| Office expenses | **3303** | 2963 | 3120 |
| Share-based compensation expense | **1007** | 1739 | 1516 |
| Depreciation - property and equipment | **93** | 130 | 89 |
| Depreciation - right-of-use assets | **299** | 322 | 357 |
|  | $**11492** | $13315 | $12514 |

---

In 2022, our research and development personnel-related expenses included employee compensation and benefits of $5,983 (2021 - $4,645; 2020 - $3,775).

In 2022, our general and administrative office expenses included employee compensation and benefits of $2,870 (2021 - $2,542; 2020 - $2,635).

**Note 20: Related Party Transactions**

***Compensation of Key Management Personnel***

Key management personnel are those persons having authority and responsibility for planning, directing, and controlling our activities as a whole. We have determined that key management personnel consists of the Board of Directors, the President and Chief Executive Officer, and the executives who report directly to the President and Chief Executive Officer.

---

| | | | |
|:---|:---|:---|:---|
| | **2022** | **2021** | **2020** |
| Short-term employee compensation and benefits | $**4308** | $3919 | $3515 |
| Termination benefits | **—** |  | 495 |
| Share-based compensation expense | **1615** | 2703 | 1758 |
|  | $**5923** | $6622 | $5768 |

---

**Note 21: Subsequent Events**

Between January 1, 2023 and March 2, 2023, we issued 1,499,044 shares for gross proceeds of US$2,570 through our June 2022 ATM equity distribution agreement.

## Exhibit 2.1

**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 2, 2023, we have 62,826,958 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 68,854,178 Common Shares issued and outstanding. As at March 2, 2023, we have 64,035 Common Share purchase warrants issued in 2019 (the "2019 Warrants") outstanding. Each 2019 Warrant entitles the holder to purchase one Common Share until August 16, 2024, at an exercise price of US$0.90.

The Corporation has neither declared nor paid dividends on the Common Shares and has no present intention of paying dividends on the Common Shares for the foreseeable future.

## Exhibit 4.19

**EXHIBIT 4.19**

**AMENDING AGREEMENT # 4**

**THIS AMENDING AGREEMENT** made effective as of the 1<sup>st</sup> day of January, 2023.

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, Amending Agreement # 2 and Amending Agreement # 3 (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, 2023, Oncolytics shall pay to the Employee a salary of SIX HUNDRED EIGHTY-SEVEN THOUSAND ONE HUNDRED AND TWENTY-FOUR ($687,124.00) CANADIAN DOLLARS per annum, exclusive of bonuses, benefits and other compensation, payable in equal installments of TWENTY-EIGHT THOUSAND SIX HUNDRED AND THIRTY DOLLARS AND SEVENTEEN CENTS ($28,630.17) on the 15<sup>th</sup> and last day of each month.

------

**EXHIBIT 4.19**

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**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.** | **ONCOLYTICS BIOTECH INC.** |
| Per: | /s/Wayne Pisano |
| | Wayne Pisano<br>Chair, Board of Directors |
| Per: | /s/Deborah Brown |
| | Deborah Brown<br>Chair, Compensation Committee<br>Director |

---

/s/Matt Coffey

______________________________

**MATT COFFEY**

## Exhibit 4.20

**EXHIBIT 4.20**

**AMENDING AGREEMENT # 4**

**THIS AMENDING AGREEMENT** made effective as of the 1<sup>st</sup> day of January, 2023.

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, Amending Agreement # 2, and by Amending Agreement # 3 (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, 2023, Oncolytics shall pay to the Employee a salary of FIVE HUNDRED TEN THOUSAND NINE HUNDRED AND TWENTY-THREE ($510,923.00) CANADIAN DOLLARS per annum, exclusive of bonuses, benefits and other compensation, payable in equal installments of TWENTY-ONE THOUSAND TWO HUNDRED EIGHTY-EIGHT DOLLARS and FORTY-SIX CENTS ($21,288.46) on the 15<sup>th</sup> and last day of each month.

------

**EXHIBIT 4.20**

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**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.** | **ONCOLYTICS BIOTECH INC.** |
| Per: | /s/Wayne Pisano |
| | Wayne Pisano<br>Chair, Board of Directors |
| Per: | /s/Deborah Brown |
| | Deborah Brown<br>Chair, Compensation Committee<br>Director |

---

/s/ Kirk Look

__________________________

**KIRK LOOK**

## Exhibit 4.21

**EXHIBIT 4.21**

**AMENDING AGREEMENT**

**THIS AMENDING AGREEMENT** made effective as of the 1<sup>st</sup> day of January, 2023.

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, 2022 (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**Amendments to the Employment Agreement**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Employment Agreement Section 3 – Remuneration is amended by replacing subsection (1) with the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;Commencing January 1, 2023, Oncolytics shall pay to the Employee a salary of FOUR HUNDRED TEN THOUSAND THREE HUNDRED AND THIRTEEN ($410,313.00) CANADIAN DOLLARS per annum, exclusive of bonuses, benefits and other compensation, payable in equal installments of SEVENTEEN THOUSAND NINETY-SIX DOLLARS and THIRTY-EIGHT CENTS ($17,096.38) on the 15<sup>th</sup> and last day of each month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The Employment Agreement Section 9 – Term and Termination is amended by replacing subsections (4) and (5) with the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Subject to Section 9(5), if this Agreement is terminated by Oncolytics at any time other than pursuant to Section 9(3), or if this Agreement is terminated by the Employee for Good Reason, the Employee shall be entitled to severance payment equal to 12 months salary. Such severance compensation shall be paid

------

**EXHIBIT 4.21**

to the Employee so as to maximize any reduction in income tax payable thereon as permitted by the Income Tax Act (Canada). The severance payment as provided pursuant to this Section 9(4) shall include an amount equal to the value of all benefits to which the Employee would otherwise have been entitled during the notice period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)Notwithstanding Section 9(4), if there is a change of control of Oncolytics, as defined herein, and if this Agreement is terminated by Oncolytics at any time within one (1) year following the change of control other than pursuant to Section 9(3), the Employee shall be entitled to severance payment equal to 12 months salary. Such severance compensation shall be paid to the Employee so as to maximize any reduction in income tax payable thereon as permitted by the Income Tax Act (Canada). For the purposes of this Section 9(5), "change of control" means any amalgamation, merger or other corporate reorganization which results in any change in the present effective voting control of Oncolytics, or will result in a change of the person or persons who own or control sufficient voting shares in Oncolytics to elect a majority of the directors of Oncolytics, or will result in a person acquiring sufficient voting shares in Oncolytics to elect a majority of the directors of Oncolytics.

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**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

------

**EXHIBIT 4.21**

IN WITNESS WHEREOF the parties hereto have executed this Amending Agreement as of the date and year first above written.

---

| | |
|:---|:---|
| **ONCOLYTICS BIOTECH INC.** | **ONCOLYTICS BIOTECH INC.** |
| Per: | /s/Wayne Pisano |
| | Wayne Pisano<br>Chair, Board of Directors |
| Per: | /s/Deborah Brown |
| | Deborah Brown<br>Chair, Compensation Committee<br>Director |

---

/s/Allison Hagerman

______________________________

**ALLISON HAGERMAN**

## Exhibit 4.22

**EXHIBIT 4.22**

**AMENDING AGREEMENT #6**

**THIS AMENDING AGREEMENT** made effective as of the 1<sup>st</sup> day of January, 2023.

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, Amending Agreement #3, Amending Agreement #4 and Amending Agreement #5 (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)&nbsp;&nbsp;&nbsp;&nbsp;Commencing January 1, 2023, OBUS shall pay to the Employee a salary of THREE HUNDRED FIFTY-TWO THOUSAND SIX HUNDRED AND SEVEN ($352,607.00) UNITED STATES DOLLARS per annum, exclusive of bonuses, benefits and other compensation, payable in equal installments of FOURTEEN THOUSAND SIX HUNDRED NINETY-ONE UNITED STATES DOLLARS and NINETY-SIX CENTS ($14,691.96) on the 15th and last day of each month.

3**Confirmation**

(1)&nbsp;&nbsp;&nbsp;&nbsp;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)&nbsp;&nbsp;&nbsp;&nbsp;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.

------

**EXHIBIT 4.22**

4**Miscellaneous**

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.** | **ONCOLYTICS BIOTECH (U.S.), INC.** |
| Per: | /s/Gilles Gosselin |
| | Gilles Gosselin<br>Director |
| Per: | /s/Matthew Coffey |
| | Matthew Coffey<br>Director |

---

/s/Andrew de Guttadauro

____________________________________

**ANDREW DE GUTTADAURO**

## Exhibit 4.23

**EXHIBIT4.23**

**AMENDING AGREEMENT # 3**

**THIS AMENDING AGREEMENT** made effective as of the 1<sup>st</sup> day of January, 2023.

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, as amended by Amending Agreement #1 and Amending Agreement # 2 (collectively 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**Amendments to the Employment Agreement**

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

Commencing January 1, 2023, OBUS shall pay to the Employee a Base Salary at an annual rate of FOUR HUNDRED AND SIXTY-FIVE THOUSAND ONE HUNDRED AND FIFTY ($465,150.00) UNITED STATES DOLLARS per annum, exclusive of bonuses, benefits and other compensation, payable in equal installments of NINETEEN THOUSAND AND THREE HUNDRED AND EIGHTY-ONE UNITED STATES DOLLARS and TWENTY-FIVE CENTS ($19,381.25) on the 15th and last day of each month.

(2)The Employment Agreement Section 5.2 – Without Cause is amended as follows:

Employer may terminate Employee's employment under this Agreement without Cause and without advance notice; <u>provided</u>, <u>however</u>, 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 12 months from the termination date; <u>provided</u>, <u>further</u>, 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 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

------

**EXHIBIT4.23**

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.

3**Confirmation**

(1)&nbsp;&nbsp;&nbsp;&nbsp;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)&nbsp;&nbsp;&nbsp;&nbsp;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**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)This Amending Agreement shall be effective from and after January 1, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)This Agreement shall be governed by and construed in accordance with the laws of California.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)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.** | **ONCOLYTICS BIOTECH (U.S.), INC.** |
| Per: | /s/Gilles Gosselin |
| | Gilles Gosselin<br>Director |
| Per: | /s/Matthew Coffey |
| | Matthew Coffey<br>Director |

---

/s/Thomas C. Heineman

____________________

**THOMAS C. HEINEMAN, M.D., Ph.D.**

## Exhibit 8.0

**EXHIBIT 8.0**

**LIST OF SUBSIDIARIES**

**2022**

---

| | |
|:---|:---|
| **Name** | **Jurisdiction** |
| Oncolytics Biotech (Barbados) Inc. | Barbados |
| Oncolytics Biotech (US) Inc. | Delaware |

---

## Exhibit 12.1

**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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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. &nbsp;&nbsp;&nbsp;&nbsp;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):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 3, 2023 | /s/Matthew Coffey |
| | | Dr. Matthew Coffey, PhD, MBA<br>Chief Executive Officer<br>Principal Executive Officer |

---

## Exhibit 12.2

**EXHIBIT 12.2**

**CERTIFICATION**

I, Kirk Look, certify that:

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

1. 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;

2. 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;

3. 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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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. &nbsp;&nbsp;&nbsp;&nbsp;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):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 3, 2023 | /s/Kirk Look |
| | | Kirk Look, CA<br>Chief Financial Officer<br>Principal Accounting and Financial Officer |

---

## Exhibit 13.1

**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, 2022, 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)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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 3, 2023

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

**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, 2022, 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)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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 3, 2023

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 15.1

![oncolyticslogotaglineblueaa.jpg](oncolyticslogotaglineblueaa.jpg)

**MANAGEMENT'S DISCUSSION & ANALYSIS**

**2022** 

------

**March 2, 2023** 

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

**BASIS OF PRESENTATION** 

Our Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, 2022, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). Our IFRS accounting policies are set in note 3 of our audited consolidated financial statements for the year ended December 31, 2022. This MD&A, along with our consolidated financial statements for the year ended December 31, 2022, were authorized for issue in accordance with a resolution of the Board of Directors (the "Board") on March 2, 2023. Unless otherwise indicated, all references to "$" and "dollars" in this discussion and analysis mean thousands of Canadian dollars.

All references in this MD&A to "the Company", "Oncolytics", "we", "us", or "our" and similar expressions refer to Oncolytics Biotech Inc. and the subsidiaries through which it conducts its business, unless otherwise indicated.

**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 immunotherapeutic agent, 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, including our immediate primary focus on advancing our program in hormone receptor-positive / human epidermal growth factor 2-negative metastatic breast cancer to a phase 3 licensure-enabling study; our exploration of opportunities for registrational programs in gastrointestinal cancers through our GOBLET platform study; the impact of the COVID-19 pandemic and the global political conflict in Ukraine on our research and development activities, business operations and financial condition, our plans to monitor and mitigate any such impact; our expectations regarding the delivery of additional clinical data, the timing thereof and the anticipated benefits and value to us of such additional clinical data; our current clinical development approach; our plan to actively manage the development of our clinical trial program, our preclinical and collaborative programs, our manufacturing process and pelareorep supply; our plans respecting regulatory approval for pelareorep; 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 clinical trials; our anticipated milestones and catalysts; our planned 2023 development program for pelareorep and primary 2023 clinical objectives; our 2023 manufacturing program; our anticipated 2023 cash requirements to fund our operations; our anticipated 2023 expenses relating to clinical trials, manufacturing and related process development, intellectual property, translational science, personnel-related and other and operating expenses; our plans respecting the maintenance of adequate cash reserves to support our planned activities; our anticipated cash usage in 2023; our plans for funding our capital expenditure requirements; our approach to credit rate, interest rate, foreign exchange and liquidity risk mitigation; the effectiveness of our internal control systems; 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 and the global political conflict in Ukraine, including 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 and the global political conflict in Ukraine persist 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.

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.

**Company Overview**

We are a clinical-stage biopharmaceutical company developing pelareorep, a safe and well-tolerated intravenously delivered immunotherapeutic agent that activates the innate and adaptive immune systems and weakens tumor defense mechanisms. This improves the ability of the immune system to fight cancer, making tumors more susceptible to a broad range of oncology treatments.

Pelareorep is a proprietary isolate of a naturally occurring, non-pathogenic double-stranded RNA (dsRNA) virus commonly found in environmental waters, known as reovirus. Pelareorep has demonstrated the ability to create a more permissive tumor microenvironment (TME) and conditions the tumor for multiple treatment combinations, including chemotherapies, checkpoint inhibitors and other immuno-oncology drugs, like CAR T therapies, bispecific antibodies, and CDK4/6 and PARP inhibitors. Pelareorep creates a new army of tumor-reactive T cells, helps these cells to infiltrate the tumor through an inflammatory process, and promotes the overexpression of PD-1/PD-L1. By priming the immune system with pelareorep, we believe we can increase the proportion of patients who respond to immunotherapies and other cancer treatments, especially in cancers where immunotherapies have failed or provided limited benefit.

As our clinical development program advances, we anticipate pelareorep's ability to enhance innate and adaptive immune responses within the TME will play an increasingly important role. This greatly increases opportunities for expansion of our clinical program along with business development and partnering opportunities to address a broad range of cancers in combination with a variety of other therapies. We believe this approach has the most promise for generating clinically impactful data and offers the most expeditious path to regulatory approval.

Our primary focus is to advance our programs in hormone receptor-positive / human epidermal growth factor 2-negative (HR+/HER2-) metastatic breast cancer (mBC) and advanced/metastatic pancreatic ductal adenocarcinoma (PDAC) to phase 3 licensure-enabling studies. In addition, we are exploring opportunities for registrational programs in gastrointestinal cancers through our GOBLET platform study.

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. As at December 31, 2022, we had cash, cash equivalents, and marketable securities of $32,138. We believe we have sufficient existing cash resources to fund our presently planned operations for at least the next twelve months.

------

**2022 Developments**

**Clinical Trial Program**

![oncolyticspipeline3.jpg](oncolyticspipeline3.jpg)

**Breast cancer program**

***Co-development Agreement 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 (Bavencio<sup>®</sup>), a human anti-PD-L1 antibody, for the treatment of HR+/HER2- mBC. This phase 2 clinical trial is jointly funded by Oncolytics and Pfizer. The study, known as BRACELET-1, is a randomised open-label study that enrolled 48 patients into three cohorts: paclitaxel alone, paclitaxel in combination with pelareorep, and paclitaxel in combination with both pelareorep and avelumab. PrECOG LLC, a leading cancer research network, is managing the BRACELET-1 study.

The study is examining the expression of immune-related biomarkers to identify changes in the T cell population between pretreatment and on-therapy biopsies and seeks to confirm our previously identified biomarker. It is designed to assess efficacy in terms of overall response rate at week 16 per RECIST 1.1. The safety of the combination is also being evaluated. The results of this study may provide an opportunity to add an arm to our proposed registration study that includes a checkpoint inhibitor in addition to the chemotherapy-pelareorep combination. Furthermore, the results of the BRACELET-1 study may provide important confirmatory data in the same patient population as our IND.213 study, for which we presented a statistically significant near doubling of overall survival with pelareorep treatment in HR+/HER2- mBC. These endpoints, including the biomarker data, are expected to further de-risk our contemplated registration study, permitting for a smaller study with a higher likelihood of clinical success.

In 2022, we concluded patient enrollment, continued re-treating patients still on-study, monitored those patients who came off treatment due to progression, and assisted with follow-up activities. These activities included analyzing data on the study's primary endpoint of week 16 overall response rate and secondary endpoints of progression-free survival (PFS) and overall survival.

***Collaboration with SOLTI: AWARE-1 study***

In February 2019, we received approval for our AWARE-1 study from the Spanish Agency for Medicine and Health Products. This clinical collaboration with SOLTI, an academic research group dedicated to breast cancer research, was 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®). We completed enrollment in 2022. Throughout 2020, 2021, and 2022, we published various clinical data which demonstrated most HR+/HER2- early breast cancer patients treated

------

with pelareorep showed an increase in CeLTIL score, a prognostic metric associated with improved overall and progression-free survival that is calculated based upon measures of (1) tumor cellularity (a measure of the proportion of cancerous vs. non-cancerous cells in a tumor tissue sample) and (2) the number of infiltrating lymphocytes in a tumor tissue sample. Importantly, the addition of atezolizumab to pelareorep increased both the magnitude of the increase in CeLTIL score and the proportion of patients with a positive CelTIL score, thereby achieving the study's primary endpoint. It was noted that patients treated with pelareorep and atezolizumab reached the primary endpoint of the study with 60% of the patients showing an increase of more than 30% in the CelTIL score. Biomarker data from AWARE-1 further demonstrated that pelareorep treatment reversed immunosuppressive tumor microenvironments, generated and expanded T cell clones, upregulated PD-L1 expression, and promoted CD8+ T cell tumor infiltration into tumors. Many of these effects were even more prominent when pelareorep was combined with atezolizumab demonstrating synergy between the two agents.

In 2022, we presented clinical biomarker analyses from AWARE-1's first two cohorts at the European Society for Medical Oncology Breast Cancer Meeting (ESMOBC), the Society for Immunotherapy of Cancer Annual Meeting 37<sup>th</sup> Meeting (SITC), and the San Antonio Breast Cancer Symposium (SABCS). The data demonstrated pelareorep's immunotherapeutic effects, synergy with checkpoint inhibition, and potential to improve the outlook for patients with HR+/HER2- breast cancer. Patients in AWARE-1's first two cohorts were treated with pelareorep and the aromatase inhibitor letrozole without (cohort 1), or with (cohort 2), the PD-L1 checkpoint inhibitor atezolizumab approximately 21 days prior to the surgical resection of their tumors.

Key data and conclusions presented at ESMOBC included:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Gene expression analyses showed 100% of evaluable patients had a Risk of Recurrence Score (ROR-S) classified as "low" at surgery vs. 55% with a "low" ROR-S at baseline

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pooled analysis of tumors from cohorts 1 and 2 shows a statistically significant 4-fold post-treatment increase in the average expression of caspase 3, which is a marker of apoptotic cell death

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pooled analysis across cohorts 1 and 2 shows statistically significant increases in markers of T cell activation and no significant changes in markers of T cell exhaustion from baseline to surgery

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Treatment with pelareorep with (cohort 2) or without (cohort1) atezolizumab led to the conversion of tumors from the more aggressive luminal B to the luminal A subtype, which is associated with improved clinical outcomes

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ 100% of evaluable cohort 2 tumors were luminal A at surgery (21 days post-treatment) vs. 70% at baseline (pre-treatment)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ 70% of evaluable cohort 1 patients had luminal A tumors at surgery vs. 40% at baseline

Data presented at SITC demonstrated that flow cytometry analyses of blood samples from these patients showed a statistically significant increase in anti-cancer natural killer (NK) cells on day 21 post-treatment in cohort 2 compared to cohort 1. In addition, cohort 2 patients showed higher levels of HLA-DR expression (a marker of T cell activation) in anti-cancer CD8+ T cells, and better maintained low levels of T cell exhaustion markers on day 21 compared to cohort 1 patients.

Data presented at SABCS demonstrated that based on the gene expression profiling data, it was shown that pelareorep primes the tumor for further checkpoint blockade therapy by activating the interferon-gamma pathway.

***Licensing Agreement with Adlai Nortye Biopharma Co., Ltd: bridging clinical trial*** 

Under our regional licensing agreement (the "Licensing Agreement") with our partner, Adlai Nortye Biopharma Co., Ltd. ("Adlai"), Adlai will have exclusive development and commercialization rights to pelareorep in certain Asian regions and we are entitled to certain milestone payments. The bridging clinical trial is evaluating the safety, tolerability, and preliminary efficacy of pelareorep-paclitaxel combination therapy in Chinese patients with advanced/metastatic HR+/HER2- breast cancer. Data from the bridging trial are expected to accelerate Adlai's development of pelareorep in China by allowing future regulatory submissions to include data from Oncolytics' North American metastatic breast cancer trials, IND.213 and BRACELET-1.

In 2022, Adlai advanced the bridging clinical trial to the third and final dose-escalation cohort. The trial's first two cohorts completed their dose escalation evaluation periods and indicated pelareorep in combination with paclitaxel was well-tolerated, with no new safety signals observed to date. The dosing regimens for the second and third cohorts are equivalent to those administered in the IND.213 study and the BRACELET-1 study, respectively.

Adlai further announced interim results at the 2022 SABCS meeting. Fifteen patients were treated in the trial, with fourteen having had at least one post-baseline tumor assessment (i.e., evaluable for efficacy). All patients enrolled into the trial were previously treated with at least one endocrine therapy and no more than one line of chemotherapy for recurrent/metastatic disease. The data and conclusions are summarized as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Disease control, partial response (PR), or stable disease (SD), was achieved in thirteen of fourteen evaluable patients (93%), with twelve (86%) showing tumor shrinkage from baseline

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Seven of fourteen evaluable patients achieved a PR (50%). Three of these patients achieved a confirmed PR (20%), while two patients are awaiting potential confirmatory scans

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• One patient achieving a PR at week 8 has maintained the PR through week 48 and remains on study

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Evolving median PFS for trial participants as of the data cut-off date was 9.1 months (95% confidence interval: 3.8 - NA)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The studied combination has been well tolerated, with no dose-limiting toxicities or serious adverse events (SAEs) reported to date

**Gastrointestinal cancer program** 

***Collaboration with Roche and AIO-Studien-gGmbH: GOBLET platform study***

Our GOBLET platform study is a collaboration with Roche and AIO-Studien-gGmbH, a leading academic cooperative medical oncology group based in Germany. The study is investigating the use of pelareorep, in combination with Roche's anti-PD-L1 checkpoint inhibitor atezolizumab (Tecentriq®), in patients with first-line advanced/metastatic pancreatic, first- and third-line metastatic colorectal, and advanced anal cancers. Approximately 55 patients are planned for enrollment across these four separate cohorts and the study is being conducted at 14 centers in Germany. The study's co-primary endpoints are safety and objective response rate (ORR) at week 16. Key secondary and exploratory endpoints include additional efficacy assessments and evaluation of potential blood-based biomarkers (T cell clonality and CEACAM6). We received clearance from the Paul Ehrlich Institute (PEI; Germany's medical regulatory body) for full enrollment of the first-line metastatic pancreatic cancer and third-line metastatic colorectal cancer cohorts in the first and second quarters of 2022, respectively. As the trial's anal cancer and first-line metastatic colorectal cancer cohorts do not include safety run-ins, all of the trial's four cohorts were cleared for full enrollment.

During 2022, GOBLET's pancreatic cancer cohort met the efficacy expansion criteria for Stage 1 of the trial and interim clinical results were presented at SITC. Per the study's Simon two-stage design, any cohort meeting a pre-specified efficacy threshold in Stage 1 (defined as achieving a minimum number of objective radiologic responses by week 16) may be expanded to enroll additional patients in an optional Stage 2 study expansion. The initial results from the safety run-in of this cohort met the primary endpoint as all patients achieved a partial response (n = 3). Additional interim data presented at the SITC meeting included:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ORR and clinical benefit rate (CBR) in GOBLET's PDAC cohort (n=13) were 69% and 85%, respectively;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• One of thirteen evaluable patients achieved a confirmed complete response;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Eight of thirteen evaluable patients achieved a PR;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Two of thirteen evaluable patients achieved SD;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The observed ORR of 69% is substantially higher than the average ORR of ~25% reported in historical control trials of gemcitabine and nab-paclitaxel in pancreatic cancer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• GOBLET's PDAC cohort exceeded the protocol-specified success criterion for Stage 1 of ≥ 3/12 objective responses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The studied treatment combination has been well tolerated, with no safety concerns identified to date; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On the strength of the data, Oncolytics and its stakeholders determined that the Stage 2 expansion will not be necessary.

Finally, we received the U.S. Food and Drug Administration (FDA) Fast Track designation for the treatment of advanced/metastatic PDAC using pelareorep in combination with atezolizumab, gemcitabine, and nab-paclitaxel. Fast Track designation is designed to facilitate the development and expedite the review of therapies to treat serious conditions and fill an unmet medical need. A clinical program that receives Fast Track designation may benefit from more frequent meetings and communications with the FDA to discuss development plans and ensure the collection of appropriate data needed to support approval.

**CAR T preclinical activities**

In 2022, we published preclinical data demonstrating the synergistic anti-cancer activity of pelareorep combined with CAR T cell therapy in solid tumors in *Science Translational Medicine* in collaboration with researchers at several institutions, including the Mayo Clinic and Duke University. The paper, entitled "Oncolytic virus-mediated expansion of dual-specific CAR T cells improves efficacy against solid tumors in mice," evaluated the persistence and efficacy of pelareorep-loaded CAR T cells ("CAR/Pela therapy") in multiple murine solid tumor models. The effects of combining CAR/Pela therapy with a subsequent intravenous dose of pelareorep ("pelareorep boost") were also investigated. Key data and conclusions from the paper included:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The persistence and anti-cancer activity of CAR T cells improved drastically when loaded with pelareorep. Compared to either treatment alone, treatment with CAR/Pela therapy led to statistically significant survival benefits in murine skin and brain cancer models.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• CAR/Pela therapy followed by a pelareorep boost led to enhanced efficacy in murine skin and brain cancer models and tumor cures in >80% of treated mice in each model.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Loading CAR T cells with pelareorep led to improved cancer cell targeting and prevented antigen escape *in vivo* by generating CAR T cells with dual specificity that target their designed antigen and the native T cell receptor antigen. These results indicate that CAR/Pela therapy may provide longer-lasting therapeutic benefits compared to treatment with CAR T cells alone.

**Manufacturing and Process Development** 

Throughout 2022, we continued distribution and storage activities, sourcing materials required for our planned product fills, and completed a product fill along with the applicable release testing. While we currently have sufficient drug product supply to support our clinical development program, we continued our activities to maintain our production capabilities. Ongoing bulk manufacturing and expanded filling capabilities are both part of the planned process validation. Continued process validation is required to ensure that the resulting product meets the required specifications and quality standards and will form part of our submission to regulators, including the FDA, for product approval.

**Intellectual Property**

At the end of 2022, we had been issued 243 patents, including 24 US and 11 Canadian patents, as well as issuances in other jurisdictions. We have an extensive patent portfolio covering the oncolytic reovirus and formulations that we use in our clinical trial program. These patent rights extend to at least the end of 2031.

**Financing Activity**

***U.S. "at-the-market" (ATM) equity distribution agreement***

In 2022, we sold 6,235,232 common shares for gross proceeds of US$10,192 at an average price of US$1.63. We received proceeds of US$9,886 after commissions of US$306. In total, we incurred share issue costs (including commissions) of $764.

**Cash Resources** 

We ended 2022 with cash, cash equivalents, and marketable securities of $32,138 (see *"Liquidity and Capital Resources")*.

**Global Business Conditions**

During 2022, a variety of external factors, including the ongoing coronavirus infectious disease 2019 (COVID-19) pandemic and the global political conflict in Ukraine, have touched elements of our business operations. COVID-19, including its variants, has created challenges affecting our clinical trial activities, including delayed patient enrollment related to our BRACELET-1 study and contributed to the disruption of our manufacturing supply chain, while the conflict in Ukraine has increased market volatility and uncertainty. Some challenges included, among other things, patients choosing to delay treatments, clinical sites suspending study activity temporarily, vendor and collaborator staff shortages, and raw material and components delays. While these challenges have largely impacted the timing of certain activities, we believe the impact on our overall business to date has not been significant. We also believe our financial condition, liquidity, and longer-term strategic development remain on track. However, these events have caused and may continue to cause significant fluctuations in stock markets, global economic activity, including inflation and rising interest rates, 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 these events might prolong and/or cause significant disruptions to our business and materially impact our results of operations, including our ongoing and planned clinical studies and manufacturing activities, will depend on future developments. These future developments are highly uncertain, cannot be predicted, and could negatively impact our business.

We will continue to monitor these events and their impact on our industry and business. We are collaborating with our investigators, partners, and vendors to minimize its effect and ensure the safety of patients and employees, minimize the effect of supply chain challenges, and maintain the advancement of our clinical programs. We expect these measures will allow us to respond to future challenges that may arise adequately. Moving forward, we plan to remain in contact with relevant stakeholders and keep the market apprised of any new information that may materially impact clinical timelines.

------

**Subsequent Events**

Between January 1, 2023 and March 2, 2023, we issued 1,499,044 shares for gross proceeds of US$2,570 through our June 2022 ATM equity distribution agreement.

**Expected Pelareorep Development For 2023**

Our primary 2023 clinical objectives will focus on delivering interim data from our BRACELET-1 and GOBLET clinical studies and assessing our clinical data to help form the nature of our registration strategy, our path to approval, and other possible clinical development opportunities.

Our 2023 manufacturing program will focus on progressing a process development program implementing single-use equipment for our drug substance production process and executing a manufacturing production run. We also expect to fill product and perform the associated analytical testing, as well as labeling, packaging, and distribution of pelareorep to our various clinical sites for ongoing and upcoming activities. Additionally, we will advance other product and analytical development activities towards registration readiness. Finally, our intellectual property program includes filings for additional patents along with monitoring activities required to protect our patent portfolio.

**Selected Annual Information**

Unless otherwise indicated, all amounts below are presented in thousands of Canadian dollars, except for share amounts.

---

| | | | |
|:---|:---|:---|:---|
| | **2022** | **2021** | **2020** |
| Revenue | $**—** | $— | $— |
| Net loss<sup>(1)(2)(3)</sup> | $**(24835)** | $(26304) | $(22505) |
| Basic and diluted loss per share<sup>(1)(2)(3)</sup> | $**(0.43)** | $(0.49) | $(0.56) |
| Total assets<sup>(4)</sup> | $**37334** | $45880 | $34346 |
| Cash dividends declared per share<sup>(5)</sup> | **Nil** | Nil | Nil |
| **Notes:** | **Notes:** | **Notes:** | **Notes:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Included in consolidated net loss and loss per common share for 2022, 2021, and 2020 are non-cash changes in fair value of warrant derivative (loss) gain of $(20), $17, and $3,492, respectively.  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Included in consolidated net loss and loss per common share for 2022, 2021, and 2020 are non-cash changes in fair value of warrant derivative (loss) gain of $(20), $17, and $3,492, respectively.  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Included in consolidated net loss and loss per common share for 2022, 2021, and 2020 are non-cash changes in fair value of warrant derivative (loss) gain of $(20), $17, and $3,492, respectively.  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Included in consolidated net loss and loss per common share for 2022, 2021, and 2020 are non-cash changes in fair value of warrant derivative (loss) gain of $(20), $17, and $3,492, respectively.  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Included in consolidated net loss and loss per common share for 2022, 2021, and 2020 are share-based compensation expenses of $2,378, $3,826, and $2,559, respectively. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Included in consolidated net loss and loss per common share for 2022, 2021, and 2020 are share-based compensation expenses of $2,378, $3,826, and $2,559, respectively. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Included in consolidated net loss and loss per common share for 2022, 2021, and 2020 are share-based compensation expenses of $2,378, $3,826, and $2,559, respectively. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Included in consolidated net loss and loss per common share for 2022, 2021, and 2020 are share-based compensation expenses of $2,378, $3,826, and $2,559, respectively. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Included in consolidated net loss and loss per common share for 2022, 2021, and 2020 are foreign exchange gain (loss) of $1,665, $(136), and $(659), respectively. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Included in consolidated net loss and loss per common share for 2022, 2021, and 2020 are foreign exchange gain (loss) of $1,665, $(136), and $(659), respectively. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Included in consolidated net loss and loss per common share for 2022, 2021, and 2020 are foreign exchange gain (loss) of $1,665, $(136), and $(659), respectively. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Included in consolidated net loss and loss per common share for 2022, 2021, and 2020 are foreign exchange gain (loss) of $1,665, $(136), and $(659), respectively. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) We issued 6,284,125 common shares for net cash proceeds of $12.6 million in 2022 (2021 - 8,876,809 common shares for net cash proceeds of $33.4 million; 2020 - 13,968,527 common shares for net cash proceeds of $40.2 million).  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) We issued 6,284,125 common shares for net cash proceeds of $12.6 million in 2022 (2021 - 8,876,809 common shares for net cash proceeds of $33.4 million; 2020 - 13,968,527 common shares for net cash proceeds of $40.2 million).  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) We issued 6,284,125 common shares for net cash proceeds of $12.6 million in 2022 (2021 - 8,876,809 common shares for net cash proceeds of $33.4 million; 2020 - 13,968,527 common shares for net cash proceeds of $40.2 million).  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) We issued 6,284,125 common shares for net cash proceeds of $12.6 million in 2022 (2021 - 8,876,809 common shares for net cash proceeds of $33.4 million; 2020 - 13,968,527 common shares for net cash proceeds of $40.2 million).  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) We have not declared or paid any dividends since incorporation. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) We have not declared or paid any dividends since incorporation. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) We have not declared or paid any dividends since incorporation. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) We have not declared or paid any dividends since incorporation. |

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**Components of Results of Operations**

***Research and Development Expenses ("R&D")***

Our R&D expenses consist primarily of costs incurred to conduct research and development on pelareorep.

Clinical trial expenses include expenses related to the preparation and development of our breast and gastrointestinal cancer programs and immunotherapy combinations in other selected cancers. Clinical trial expenses include regulatory and consulting activities, contract research organization expenses, data management expenses, and other costs associated with our clinical trial program.

Manufacturing & related process development ("M&P") expenses include product manufacturing and process development activities. Product manufacturing expenses include third-party direct manufacturing costs, quality control testing, filling, labeling, packaging, and storage costs. Process development expenses include costs associated with studies examining components of our manufacturing and analytical processes and costs associated with planned process validation and related conformity testing.

Intellectual property expenses include legal and filing fees associated with our patent portfolio.

Translational science expenses are intended to expand our intellectual property related to pelareorep and identify potential licensing opportunities arising from our technology base.

Personnel-related, share-based compensation, and other expenses are employee-related expenses.

***General and Administrative Expenses ("G&A")***

Our G&A expenses consist primarily of public company-related expenses, office expenses, share-based compensation expense, and depreciation. Public company-related expenses include 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 U.S. and Canadian stock listings. Office expenses include compensation costs (excluding share-based compensation expense), rent related to short-term leases, and other office-related costs.

***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.

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**Results of Operations**

Unless otherwise indicated, all amounts below are presented in thousands of Canadian dollars, except for share amounts.

Net loss for the year ended December 31, 2022, was $24,835 compared to $26,304 and $22,505 for the years ended December 31, 2021, and December 31, 2020, respectively.

***Research and Development Expenses ("R&D")***

Our R&D expenses increased by $2,512 for the year ended December 31, 2022, compared to 2021, and decreased by $25 for the year ended December 31, 2021, compared to 2020. The following table summarizes our R&D expenses for the years ended December 31, 2022, 2021, and 2020:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | | |
| | **2022** | **2021** | **2020** | **Change**<br>**2021 to 2022** | **Change**<br>**2020 to 2021** |
| Clinical trial expenses | $**4970** | $3205 | $3055 | $1765 | $150 |
| M&P expenses | **2148** | 1547 | 3384 | 601 | (1837) |
| Intellectual property expenses | **544** | 618 | 907 | (74) | (289) |
| Translational science expenses | **264** | 673 | 318 | (409) | 355 |
| Personnel-related expenses | **6023** | 4754 | 4135 | 1269 | 619 |
| Share-based compensation expense | **1371** | 2087 | 1043 | (716) | 1044 |
| Other expenses | **112** | 36 | 103 | 76 | (67) |
| Research and development expenses | $**15432** | $12920 | $12945 | $2512 | $(25) |

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The increase in our R&D expenses for the year ended December 31, 2022 was primarily due to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased clinical trial expenses as a result of an increase in our clinical study costs due to higher GOBLET set-up, patient enrollment, and sample analysis costs and increased clinical and safety data management consulting costs, partly offset by lower AWARE-1 patient activities as study closure began in 2022;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased personnel-related expenses due to higher salaries and annual incentive awards, the strengthening of the U.S. dollar, and additional headcount to support our R&D program; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased M&P expenses associated with higher production process and analytical activities as we focus on ensuring our active drug substance and finished drug product meet the regulatory specifications and standards. The increase was partly offset by lower routine testing activities.

The above increases were partly offset by the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Decreased share-based compensation expense as a result of a lower number of options granted in 2022 and the impact of the vesting of options granted in prior periods; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Decreased translational science expenses as our bispecific antibodies and CAR T studies ongoing throughout 2021 were largely completed by the end of the first quarter of 2022.

The decrease in our R&D expenses for the year ended December 31, 2021 was primarily due to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Decreased M&P expenses as a result of the completion of a production run, two product fills, and the associated release testing activities in 2020; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Decreased intellectual property expenses as a result of the lapsing of non-core patents in certain jurisdictions and foreign exchange fluctuations.

The above decreases were partly offset by the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased share-based compensation expense due to the impact of the vesting of options granted in prior periods;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased personnel-related expenses caused by a change in salary level and an increase in headcount as we expanded our U.S. office, partly offset by lower recruitment-related costs; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased translational science expenses as a result of the bispecific antibodies and CAR T studies initiated in 2021.

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***General and Administrative Expenses ("G&A")***

Our G&A expenses decreased by $1,823 for the year ended December 31, 2022, compared to 2021, and increased by $801 for the year ended December 31, 2021, compared to 2020. The following table summarizes our G&A expenses for the years ended December 31, 2022, 2021, and 2020:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | | |
| | **2022** | **2021** | **2020** | **Change**<br>**2021 to 2022** | **Change**<br>**2020 to 2021** |
| Public company-related expenses | $**6790** | $8161 | $7432 | $(1371) | $729 |
| Office expenses | **3303** | 2963 | 3120 | 340 | (157) |
| Share-based compensation expense | **1007** | 1739 | 1516 | (732) | 223 |
| Depreciation - property and equipment | **93** | 130 | 89 | (37) | 41 |
| Depreciation - right-of-use assets | **299** | 322 | 357 | (23) | (35) |
| General and administrative expenses | $**11492** | $13315 | $12514 | $(1823) | $801 |

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The decrease in our G&A expenses for the year ended December 31, 2022 was primarily due to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Decreased public company-related expenses as a result of lower investor relations activities, partly offset by increased travel expenses with the easing of COVID-19-related restrictions and higher board of directors advisory costs; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Decreased share-based compensation expense caused by a lower number of options granted in 2022 and the impact of the vesting of options and share awards granted in prior periods.

Increased office expenses partly offset the above decreases as a result of higher salaries and annual incentive awards, and additional headcount to support our administrative activities.

The increase in our G&A expenses for the year ended December 31, 2021 was primarily due to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased public company-related expenses due to an increase in directors and officers insurance premiums and investor relations activities, partly offset by lower business development consulting activities; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased share-based compensation expense on account of the impact of the vesting of options granted in prior periods, partly offset by a lower number of vesting share awards granted to independent board members due to a change in compensation arrangement.

***Change in Fair Value of Warrant Derivative***

For the year ended December 31, 2022, we recognized a loss of $20 on the change in fair value of our warrant derivative compared to gains of $17 and $3,492 for the years ended December 31, 2021, and December 31, 2020, respectively. The change in fair value in 2021 and 2020 was based on several factors, including changes in the market price of our shares and the revaluation of warrants exercised. The number of outstanding warrants was 64,035, 64,035, and 265,757 as at December 31, 2022, December 31, 2021, and December 31, 2020, respectively.

***Foreign Exchange***

For the year ended December 31, 2022, our foreign exchange gain was $1,665 compared to losses of $136 and $659 for the years ended December 31, 2021, and December 31, 2020, respectively. The foreign exchange gain/loss incurred in all three years was primarily due to unrealized translation gain/loss on U.S. dollar-denominated cash balances as a result of the fluctuation of the U.S. dollar versus the Canadian dollar throughout the respective periods.

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**Summary of Quarterly Results**

Historical patterns of expenditures cannot be taken as an indication of future expenditures. Our current and future expenditures are subject to numerous uncertainties, including the duration, timing, and costs of R&D activities ongoing during each period and the availability of funding from investors and prospective partners. As a result, the amount and timing of expenditures and, therefore, liquidity and capital resources may vary substantially from period to period.

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **2022** | **2022** | **2022** | **2022** | **2021** | **2021** | **2021** | **2021** |
| | Dec.<sup>(3)</sup> | Sept. | June | March | Dec.<sup>(3)</sup> | Sept. | June | March |
| Revenue |  |  |  |  |  |  |  |  |
| Net loss<sup>(1)(2)</sup> | (8554) | (4407) | (5095) | (6779) | (7751) | (4872) | (7246) | (6435) |
| Basic and diluted loss per common share<sup>(1)(2)</sup> | $(0.14) | $(0.08) | $(0.09) | $(0.12) | $(0.14) | $(0.09) | $(0.13) | $(0.13) |
| Total assets<sup>(4)</sup> | 37334 | 38959 | 40239 | 44446 | 45880 | 52593 | 56309 | 54180 |
| Total cash, cash equivalents, and marketable securities<sup>(4)</sup> | 32138 | 32362 | 33689 | 39483 | 41262 | 48087 | 50799 | 50362 |
| Total long-term debt | **—** | **—** | **—** | **—** | **—** |  |  |  |
| Cash dividends declared<sup>(5)</sup> | Nil | Nil | Nil | Nil | Nil | Nil | Nil | Nil |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Included in consolidated net loss and loss earnings per common share are share-based compensation expenses of $749, $500, $490, $639, $1,129, $1,007, $1,032, and $658, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Included in consolidated net loss and loss per common share are foreign exchange (loss) gain of $(274), $1,526, $888, $(474), $(326), $1,212, $(631), and $(391), respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Included in consolidated net loss and loss per common share were annual short-term incentive awards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)We issued 6,284,125 common shares for net cash proceeds of $12.6 million in 2022 (2021 - 8,876,809 common shares for net cash proceeds of $33.4 million).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)We have not declared or paid any dividends since incorporation.

**Fourth Quarter**

Statement of loss for the three months ended December 31, 2022, and 2021 was as follows:

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| | | |
|:---|:---|:---|
| | **2022** | **2021** |
| **Expenses** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development | $**4841** | $3679 |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative | **3667** | 3776 |
| **Loss before the following** | **(8508)** | (7455) |
| &nbsp;&nbsp;&nbsp;Change in fair value of warrant derivative | **(29)** | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange loss | **(274)** | (326) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income, net | **314** | 22 |
| **Loss before income taxes** | **(8497)** | (7709) |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax expense | **(57)** | (42) |
| **Net loss** | **(8554)** | (7751) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive loss - translation adjustment | **(61)** | (19) |
| **Net comprehensive loss** | $**(8615)** | $(7770) |
| **Basic and diluted loss per common share** | $**(0.14)** | $(0.14) |
| **Weighted average number of shares (basic and diluted)** | **59512765** | 55025655 |

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**Fourth Quarter Review of Operations**

Net loss for the three months ended December 31, 2022, was $8,554 compared to $7,751 for the three months ended December 31, 2021.

***Research and Development Expenses ("R&D")***

Our R&D expenses increased by $1,162 from $3,679 for the three months ended December 31, 2021, to $4,841 for the three months ended December 31, 2022. The following table summarizes our R&D expenses for the three months ended December 31, 2022, and 2021:

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| | | | |
|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | |
| | **2022** | **2021** |<br>**Change** |
| Clinical trial expenses | $**1295** | $628 | $667 |
| M&P expenses | **477** | 270 | 207 |
| Intellectual property expenses | **129** | 93 | 36 |
| Translational science expenses | **13** | 222 | (209) |
| Personnel-related expenses | **2431** | 1848 | 583 |
| Share-based compensation expense | **460** | 616 | (156) |
| Other expenses | **36** | 2 | 34 |
| Research and development expenses | $**4841** | $3679 | $1162 |

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The increase in our R&D expenses for the three months ended December 31, 2022 was primarily due to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased clinical trial expenses as a result of higher GOBLET patient costs and safety data management consulting costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased personnel-related expenses attributable to higher salaries and annual incentive awards, the strengthening of the U.S. dollar, and additional headcount to support our R&D program; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased M&P expenses associated with higher production process and analytical activities as we focus on ensuring our active drug substance and finished drug product meet the regulatory specifications and standards plus higher distribution costs related to GOBLET.

The above increases were partly offset by the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Decreased translational sciences expenses as our bispecific antibodies and CAR T studies ongoing in the fourth quarter of 2021 were largely completed by the end of the first quarter of 2022; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Decreased share-based compensation expense as a result of the impact of the vesting of options granted in prior periods.

***General and Administrative Expenses ("G&A")***

Our G&A expenses decreased by $109 from $3,776 for the three months ended December 31, 2021, to $3,667 for the three months ended December 31, 2022. The following table summarizes our G&A expenses for the three months ended December 31, 2022, and 2021:

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| | | | |
|:---|:---|:---|:---|
| | **2022** | **2021** | **Change** |
| Public company-related expenses | $**2003** | $2095 | $(92) |
| Office expenses | **1276** | 1071 | 205 |
| Share-based compensation expense | **289** | 513 | (224) |
| Depreciation - property and equipment | **22** | 23 | (1) |
| Depreciation - right-of-use assets | **77** | 74 | 3 |
| General and administrative expenses | $**3667** | $3776 | $(109) |

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The decrease in our G&A expenses for the three months ended December 31, 2022 was primarily due to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Decreased share-based compensation expense attributable to the impact of the vesting of options granted in prior periods;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Partly offset by increased office expenses as a result of higher salaries and annual incentive awards, and additional headcount to support our administrative activities.

**Liquidity and Capital Resources**

As a clinical-stage biopharmaceutical company, we have not been profitable since our inception. We expect to continue to incur substantial losses as we continue our research and development efforts. We do not expect to generate significant revenues until and unless pelareorep becomes commercially viable. To date, we have funded our operations mainly through the issuance of additional capital via public offerings, equity distribution arrangements, and the exercise of warrants and stock options. In 2022, we were able to raise funds through our U.S. ATM equity distribution agreement.

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 16, 2022, we renewed our short form base shelf prospectus (the "Base Shelf") that qualifies for distribution of up to $150.0 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. We may also sell Securities directly to purchasers or through agents, subject to obtaining any applicable exemption from registration requirements. The distribution of Securities may be affected 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 required to close a financing and is expected to increase the number of potential investors that may be prepared to invest in the 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 16, 2024.

Our Base Shelf allowed us to enter into our ATM equity distribution agreements (see Note 9 of our audited consolidated financial statements). We use these equity arrangements to assist us in achieving our capital objective. These arrangements provide us with the opportunity to raise capital and better manage our cash resources. Our current ATM equity distribution agreement provides us with access to, subject to terms and conditions, US$65.0 million, of which we have raised gross proceeds of approximately US$5.6 million at December 31, 2022. We expect to continue to access our equity arrangement to help support our operations.

As at December 31, 2022, and 2021, we had cash and cash equivalents, marketable securities, and working capital ratios as follows:

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| | | |
|:---|:---|:---|
| | **2022** | **2021** |
| Cash and cash equivalents | $**11666** | $41262 |
| Marketable securities | $**20472** | $— |
| Working capital ratio | **9.05** | 16.69 |

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We define working capital ratio as current assets divided by current liabilities, as presented on our audited consolidated statement of financial position. The change in our cash and cash equivalents between December 31, 2021, and December 31, 2022, reflects the cash used in our operating activities of $23.4 million, cash used in our investing activities of $20.4 million, and cash provided by our financing activities of $12.2 million for the year ended December 31, 2022. We have no debt other than accounts payable and accrued liabilities and lease liabilities. We have commitments and contingent obligations relating to the completion of our research and development of pelareorep.

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The following table summarizes our cash flows for the periods indicated:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | | |
| | **2022** | **2021** | **2020** | **Change**<br>**2021 to 2022** | **Change**<br>**2020 to 2021** |
| Cash used in operating activities | $**(23355)** | $(22433) | $(22068) | $(922) | $(365) |
| Cash used in investing activities | **(20403)** | (286) | (29) | (20117) | (257) |
| Cash provided by financing activities | **12205** | 33015 | 39773 | (20810) | (6758) |
| Impact of foreign exchange on cash and cash equivalents | **1957** | (254) | (604) | 2211 | 350 |
| (Decrease) increase in cash and cash equivalents | $**(29596)** | $10042 | $17072 | $(39638) | $(7030) |

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***Cash used in operating activities***

The change between 2022 and 2021 was primarily related to higher net operating activities and non-cash working capital changes. The change between 2021 and 2020 reflected lower net operating activities and non-cash working capital changes.

Net cash used in operating activities for the year ended December 31, 2022, consisted of a net loss of $24,835 less non-cash adjustments of $1,089 and non-cash working capital changes of $391. Non-cash items primarily included share-based compensation expense and unrealized foreign exchange gain. Non-cash working capital changes were mainly due to additions to accounts payable and accrued liabilities and prepaid expenses and deposits.

Net cash used in operating activities for the year ended December 31, 2021, included a net loss of $26,304 less non-cash adjustments of $4,779 offset by non-cash working capital changes of $908. Non-cash items mainly consisted of share-based compensation expense and unrealized foreign exchange loss. An increase in other receivables primarily caused the non-cash working capital changes.

Net cash used in operating activities for the year ended December 31, 2020, comprised a net loss of $22,505 less non-cash adjustments of $227 and non-working capital changes of $210. Non-cash items primarily included share-based compensation expense, change in fair value of warrant derivative, and unrealized foreign exchange loss. Non-cash working capital changes were mainly attributable to a decrease in other receivables, accounts payable and accrued liabilities, and other liabilities.

***Cash used in investing activities***

The change between 2022 and 2021 was principally related to acquiring marketable securities. The change between 2021 and 2020 directly related to leasehold improvements and furnishing of our Calgary headquarters in 2021.

***Cash provided by financing activities***

The changes were mainly due to our U.S. ATM activities. During the year ended December 31, 2022, we sold 6,235,232 common shares for gross proceeds of US$10,192 at an average price of US$1.63. During the year ended December 31, 2021, we sold 8,401,029 common shares for gross proceeds of US$27,158 at an average price of US$3.23. During the year ended December 31, 2020, we sold 12,182,532 common shares for gross proceeds of US$30,167 at an average price of US$2.48, and 1,418,369 warrants in connection with our August 2019 underwritten public offering were exercised for gross proceeds of US$1,277.

We desire to maintain adequate cash reserves to support our planned activities, including our clinical trial program, product manufacturing, administrative costs, and intellectual property protection. To do so, we estimate our future cash requirements by preparing a budget and a multi-year plan annually for review and approval by our Board. The budget establishes the approved activities for the upcoming year and estimates the associated costs. The multi-year plan estimates future activity along with the potential cash requirements and is based on our assessment of our current clinical trial progress along with the expected results from the coming year's activity. Budget to actual variances are prepared and reviewed by management and are presented quarterly to the Board.

We continue to manage our research and development plan to ensure optimal use of our existing resources as we expect to fund our expenditure requirements and commitments with existing working capital. Additional activities continue to be subject to adequate resources, and we believe we will have sufficient existing cash resources to fund our presently planned operations for at least the next twelve months. Factors that will affect our anticipated cash usage 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.

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We are not subject to externally imposed capital requirements, and there have been no changes in how we define or manage our capital in 2022.

**Contractual Obligations and Commitments**

The following table summarizes our significant contractual obligations as at December 31, 2022:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **<br>Total** | **Less than 1 year** | <br>**2 -3 years** | <br>**4 - 5 years** | **More than <br>5 years** |
| Accounts payable and accrued liabilities | $3650 | $3650 | $— | $— | $— |
| Lease obligations | 447 | 251 | 130 | 66 |  |
| Total contractual obligations | $4097 | $3901 | $130 | $66 | $— |

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In addition, we are committed to payments totaling approximately $16,775 for activities mainly related to our clinical trial and manufacturing programs, which are expected to occur over the next three years. We are able to cancel most of these agreements with notice. The ultimate amount and timing of these payments are subject to changes in our research and development plan.

**Off-Balance Sheet Arrangements**

As at December 31, 2022, we had not entered into any off-balance sheet arrangements.

**Transactions with Related Parties**

For the years ended December 31, 2022, 2021, and 2020, we did not enter into any related party transactions other than compensation paid to key management personnel. Key management personnel are those persons having authority and responsibility for planning, directing, and controlling our activities as a whole. We have determined that key management personnel consists of the Board of Directors, the President and Chief Executive Officer, and the executives who report directly to the President and Chief Executive Officer.

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| | | | |
|:---|:---|:---|:---|
| | **2022** | **2021** | **2020** |
| Short-term employee compensation and benefits | $**4308** | $3919 | $3515 |
| Termination benefits | **—** |  | 495 |
| Share-based compensation expense | **1615** | 2703 | 1758 |
|  | $**5923** | $6622 | $5768 |

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**Critical Accounting Estimates**

In preparing our audited consolidated financial statements, we use IFRS as issued by the IASB. IFRS requires us to make certain estimates, judgements, and assumptions that we believe are reasonable based upon the information available in applying our accounting policies. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the audited consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods presented. Actual results could differ from those estimates, and such differences could be material.

Judgment, estimates and assumptions made by management that are significant to the financial statements are described below and in Note 4 of our audited consolidated financial statements for the year ended December 31, 2022.

*Revenue recognition*

We entered into a Licensing Agreement with Adlai, which provides, among other payments, 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 toward 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.

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*Clinical trial and manufacturing expenses*

Clinical trial and manufacturing expenses represent significant components of our research and development expenses, and we outsource a significant portion of these activities to third-party contract research/manufacturing 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 achieving certain milestones. As part of preparing our audited consolidated financial statements, we estimate the expense to recognize based on services that the contract research/manufacturing organizations have performed. 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.

*Valuation of share-based compensation*

Estimating the 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 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 model, including the expected life, share price volatility, and dividend yield, 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 compensation expense for the years ended December 31, 2022, 2021, and 2020, of $2,378, $3,826, and $2,559, respectively.

*Valuation of warrant derivative* 

Estimating the 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 model including, the expected life, share price volatility, and dividend yield, and making assumptions about them, as discussed in Note 16 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 years ended December 31, 2022, 2021, and 2020, of $(20), $17, and $3,492, respectively.

*Income taxes*

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Currently, we are accumulating tax loss carry-forward balances in various tax jurisdictions creating a deferred tax asset. Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Management's judgment is required to determine the amount of deferred tax assets that can be recognized based on the likely timing and the level of future taxable profits together with future tax planning strategies.

To date, we have determined that none of our deferred tax assets should be recognized. Our deferred tax assets are mainly comprised of our net operating losses from prior years, prior year research and development expenses, and non-refundable investment tax credits. These tax pools relate to entities that have a history of losses, have varying expiry dates, and may not be used to offset taxable income within our other subsidiaries. There are also no taxable temporary differences or any tax planning opportunities available that could partly support the recognition of these losses as deferred tax assets.

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**Accounting Policies** 

Our significant accounting policies are described in Note 3 of our audited consolidated financial statements for the year ended December 31, 2022.

**Accounting Standards and Interpretations Issued but Not Yet Effective**

**IAS 1 *Presentation of Financial Statements***

In February 2021, the IASB issued amendments to IAS 1 *Presentation of Financial Statements* and IFRS Practice Statement 2 *Making Materiality Judgements,* in which it provides guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments apply to annual reporting periods beginning on or after January 1, 2023, with earlier application permitted. The adoption of this standard is not expected to have a material impact on our consolidated financial statements.

**IAS 8 *Accounting Policies, Changes in Accounting Estimates and Errors***

In February 2021, the IASB issued amendments to IAS 8, in which it introduced a new definition of 'accounting estimates'. The amendments clarify the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors. Also, the amendments clarify how entities use measurement techniques and inputs to develop accounting estimates. The amendments apply to annual reporting periods beginning on or after January 1, 2023, with earlier application permitted. The adoption of this standard is not expected to have a material impact on our consolidated financial statements.

**IAS 12 *Income Taxes*** 

In May 2021, the IASB issued amendments to IAS 12, which narrowed the scope of the initial recognition exception under IAS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences. The amendments apply to annual reporting periods beginning on or after January 1, 2023, with earlier application permitted. The amendments apply prospectively to transactions that occur on or after the beginning of the earliest comparative period presented. The adoption of this standard is not expected to have a material impact on our consolidated financial statements.

**Financial Instruments and Other Instruments**

**Fair value of financial instruments**

Our financial instruments consist of cash and cash equivalents, marketable securities, other receivables, accounts payable and accrued liabilities, and warrant derivative. As at December 31, 2022, the carrying amount of our cash and cash equivalents, marketable securities, other receivables, and accounts payable and accrued liabilities approximated their fair value due to their short-term maturity.

Warrants with an exercise price denominated in a currency that differs from an entity's functional currency are treated as a derivative, initially measured at fair value, with subsequent changes in fair value at each reporting period end recognized through profit and loss. Our warrants with an exercise price of US$0.90 (see Note 9(b) of our audited consolidated financial statements) meet this requirement, and we have presented the fair value of these warrants as a current liability on the consolidated statement of financial position. As these warrants are exercised, the fair value at the date of exercise and the associated non-cash liability will be included in our share capital along with the proceeds from the exercise. If these warrants expire, the non-cash warrant liability is reversed through the consolidated statement of loss and comprehensive loss. There is no cash flow impact as a result of the accounting treatment for changes in the fair value of the warrant derivative or when warrants expire unexercised. 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, 2022, the fair value of our warrant derivative was $79 (December 31, 2021 - $56). We use the Black-Scholes valuation model to estimate fair value.

**Financial risk management**

***Credit risk***

Credit risk is the risk of a 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, marketable securities, and other receivable from Pfizer in connection with the BRACELET-1 study (see Note 5 of our audited consolidated financial statements) 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, marketable securities, and other receivable from Pfizer.

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We mitigate our exposure to credit risk connected to our cash and cash equivalents 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. Our foreign bank accounts are used solely for the purpose of settling accounts payable and accrued liabilities or payroll.

We also mitigate our exposure to credit risk by restricting our portfolio to investment-grade securities with short-term maturities and monitoring counterparties' credit risk and credit standing.

***Interest rate risk***

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. We hold our cash and cash equivalents in bank accounts or high-interest savings accounts that have variable interest rates. Our marketable securities have fixed interest rates. We mitigate interest rate risk through our investment policy that only allows the investment of excess cash resources in investment-grade vehicles while matching maturities with our operational requirements.

Fluctuations in market interest rates 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 and the 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 2022 by approximately $170. The impact of a $0.01 increase in the value of the Euro against the Canadian dollar would have increased our net comprehensive loss in 2022 by approximately $22.

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 and accrued liabilities.

Significant balances in foreign currencies at December 31, 2022, are as follows:

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| | | |
|:---|:---|:---|
| | **U.S. dollar** | **Euro** |
| Cash and cash equivalents | $6635 | $— |
| Marketable securities | 15115 |  |
| Accounts payable and accrued liabilities | (1093) | (1035) |
|  | $20657 | $(1035) |

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***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 and accrued liabilities are all due within the current operating period.

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**Other MD&A Requirements**

We have 62,826,958 common shares outstanding at March 2, 2023. If all of our options (5,963,185) and common share purchase warrants with a US$0.90 exercise price (64,035) were exercised or were to vest, we would have 68,854,178 common shares outstanding.

Our 2022 annual report on Form 20-F is available on SEDAR at www.sedar.com and EDGAR at www.sec.gov.

**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 errors 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 errors or mistakes. 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, projections of any evaluation of effectiveness to future periods are subject to the risk that the 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, 2022, and has concluded that such internal control over financial reporting is effective as of December 31, 2022. 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 year ended December 31, 2022, that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

**Risks and Uncertainties**

We are a clinical-stage biopharmaceutical company. Prospects for biotechnology companies in the research and development stage should generally be regarded as speculative. It is not possible to predict, based on 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 on 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

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companies generally are volatile, and may or may not move in a manner consistent with the progress we have made or are making.

Investment in our common shares involves a high degree of risk. An investor should carefully consider, among other matters, the risk factors in addition to the other information in our annual report on Form 20-F filed with the U.S. Securities and Exchange Commission (the "SEC"), as well as our other public filings with the Canadian securities regulatory authorities and the SEC, when evaluating our business because these risk factors may have a significant impact on our business, financial condition, operating results or cash flow. If any of the described material risks in our annual report or in subsequent reports we file with the regulatory authorities actually occur, they may materially harm our business, financial condition, operating results or cash flow. Additional risks and uncertainties that we have not yet identified or that we presently consider to be immaterial may also materially harm our business, financial condition, operating results, or cash flow. For information on risks and uncertainties, please refer to the "Risk Factors" section of our most recent annual report on Form 20-F and our other public filings available on www.sedar.com and www.sec.gov/edgar.shtml.

## Exhibit 15.2

**EXHIBIT 15.2**

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We consent to the incorporation by reference in the following Registration Statements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Form S-8 nos. 333-171625 and 333-205708

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Form F-10 no. 333-265510

of Oncolytics Biotech Inc. (the "Company") of our report dated March 2, 2023, with respect to the consolidated statements of financial position as at December 31, 2022 and December 31, 2021 and the consolidated statements of loss and comprehensive loss, changes in equity and cash flows for each of the years in the three-year period ended December 31, 2022 included in this Annual Report on Form 20-F.

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|:---|:---|
| Calgary, Alberta | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; /s/Ernst & Young LLP |
| March 3, 2023 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chartered Professional Accountants |

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