o
|
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
OR
|
||
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For fiscal year ended December 31, 2010
|
||
OR
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from ____ to ____
|
||
OR
|
||
o
|
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Date of event requiring this shell company report:
|
Title of Each Class | Name of each exchange on which registered |
Common Shares, no par value | NASDAQ Capital Market |
Large accelerated filer o | Accelerated filer x | Non-accelerated filer o |
U.S. GAAP | International Reporting Standards as issued | Other x |
by the International Accounting Standards Board o |
|
●
|
risks related all of our products, including REOLYSIN
®
, being in the research and development stage and requiring further development and testing before they can be marketed commercially;
|
|
●
|
risks inherent in pharmaceutical research and development;
|
|
●
|
risks related to timing and possible delays in our clinical trials;
|
|
●
|
risks related to our pharmaceutical products being subject to intense regulatory approval processes;
|
|
●
|
risks related to the extremely competitive biotechnology industry and our competition with larger companies with greater resources;
|
|
●
|
risks related to our reliance on patents and proprietary rights to protect our technology;
|
|
●
|
risks related to potential products liability claims;
|
|
●
|
risks related to our limited manufacturing experience and reliance on third parties to commercially manufacture our products, if and when developed;
|
|
●
|
risks related to our new products not being accepted by the medical community or consumers;
|
|
●
|
risks related to our technologies becoming obsolete;
|
|
●
|
risks related to our dependence on third party relationships for research and clinical trials;
|
|
●
|
risks related to our lack of operating revenues and history of losses;
|
|
●
|
uncertainty regarding our ability to obtain third-party reimbursement for the costs of our product;
|
|
●
|
risks related to our ability to obtain additional financing to fund future research and development of our products and to meet ongoing capital requirements;
|
|
●
|
risks related to potential increases in the cost of director and officer liability insurance;
|
|
●
|
risks related to our dependence on key employees and collaborators;
|
|
●
|
risks related to Barbados law;
|
|
●
|
risks related to the effect of changes in the law on our corporate structure;
|
|
●
|
risks related to expenses in foreign currencies and our exposure to foreign currency exchange rate fluctuations;
|
|
●
|
risks related to our status as a foreign private issuer;
|
|
●
|
risks related to our compliance with the Sarbanes-Oxley Act of 2002, as amended;
|
|
●
|
risk related to possible “passive foreign investment company” status;
|
|
●
|
risks related to fluctuations in interest rates;
|
|
●
|
and risks related to our common shares.
|
Canadian Dollars Per U.S. Dollars
|
||||||
2010
|
2009
|
2008
|
2007
|
2006
|
2005
|
|
Average for the period
|
0.9710
|
0.8760
|
0.9441
|
0.9348
|
0.8820
|
0.8259
|
|
A.
|
Selected Financial Data
|
2010
$
|
2009
$
|
2008
$
|
2007
$
|
2006
$
|
|
Revenues
|
—
|
—
|
—
|
—
|
—
|
Net loss, Canadian GAAP
(2)
|
19,973,772
|
16,231,249
|
17,550,204
|
15,950,426
|
14,628,291
|
Net loss, U.S. GAAP
(2)
|
24,815,721
|
14,999,569
|
17,188,704
|
15,588,926
|
14,266,791
|
Basic and diluted loss per share, Canadian GAAP
(2), (3)
|
0.32
|
0.33
|
0.42
|
0.39
|
0.40
|
Basic and diluted loss per share, U.S.
GAAP
(2), (3)
|
0.40
|
0.30
|
0.42
|
0.39
|
0.39
|
Total assets, Canadian GAAP
(1), (3)
|
44,432,442
|
35,593,391
|
13,987,195
|
26,297,567
|
29,389,636
|
Total assets, U.S. GAAP
(1), (3)
|
44,432,442
|
35,593,391
|
13,806,445
|
25,755,317
|
28,485,886
|
Shareholders’ equity, Canadian GAAP
(3)
|
41,931,760
|
31,366,458
|
9,453,084
|
23,476,340
|
26,773,217
|
Shareholders’ equity, U.S. GAAP
(3)
|
36,278,996
|
30,343,407
|
9,272,334
|
22,934,090
|
25,869,467
|
Cash dividends declared per share
(4)
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Weighted average number of common shares outstanding
|
62,475,403
|
49,370,175
|
41,369,515
|
40,428,825
|
36,346,266
|
|
1)
|
Subsequent to the acquisition of Oncolytics Biotech Inc. by SYNSORB in April 1999, we applied push down accounting. See note 2 to the audited financial statements for 2010.
|
|
2)
|
Included in net loss and net loss per share is stock based compensation expense of $3,251,041 (2009 – $424,273; 2008 – $64,039; 2007 – $539,156; 2006 – $403,550).
|
|
3)
|
We issued 6,408,333 common shares for net cash proceeds of $27,288,132 (2009 – 17,524,211 common shares for net cash proceeds of $37,052,900 and 200,000 common shares for a $684,000 investment in British Canadian Biosciences Corp.; 2008 – 2,650,000 commons shares for net cash proceeds of $3,421,309; 2007 – 4,660,000 common shares for net cash proceeds of $12,114,394; 2006 – 284,000 common shares for cash proceeds of $241,400)
|
|
4)
|
We have not declared or paid any dividends since incorporation.
|
|
B.
|
Capitalization and Indebtedness
|
|
C.
|
Reasons for the Offer and Use of Proceeds
|
|
D.
|
Risk Factors
|
|
●
|
the discovery of unexpected toxicities or lack of sufficient efficacy of products which make them unattractive or unsuitable for human use;
|
|
●
|
preliminary results as seen in animal and/or limited human testing may not be substantiated in larger, controlled clinical trials;
|
|
●
|
manufacturing costs or other production factors may make manufacturing of products ineffective, impractical and non-competitive;
|
|
●
|
proprietary rights of third parties or competing products or technologies may preclude commercialization;
|
|
●
|
requisite regulatory approvals for the commercial distribution of products may not be obtained; and
|
|
●
|
other factors may become apparent during the course of research, up-scaling or manufacturing which may result in the discontinuation of research and other critical projects.
|
|
●
|
Our 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;
|
|
●
|
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;
|
|
●
|
We might have to suspend or terminate our clinical trials if the participants are being exposed to unacceptable health risks;
|
|
●
|
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;
|
|
●
|
Regulators may refuse to accept or consider data from clinical trials for various reasons, including noncompliance with regulatory requirements or our clinical protocols;
|
|
●
|
The cost of our clinical trials may be greater than we anticipate; and
|
|
●
|
The supply or quality of our products or other materials necessary to conduct our clinical trials may be insufficient or inadequate.
|
|
●
|
The size and nature of the subject population;
|
|
●
|
The proximity of subjects to clinical sites;
|
|
●
|
The eligibility criteria for the trial;
|
|
●
|
The design of the clinical trial;
|
|
●
|
Competing clinical trials; and
|
|
●
|
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.
|
|
·
|
competition in relation to alternative treatments, including efficacy advantages and cost advantages;
|
|
·
|
perceived ease of use;
|
|
·
|
the availability of coverage or reimbursement by third-party payors;
|
|
·
|
uncertainties regarding marketing and distribution support;
|
|
·
|
distribution or use restrictions imposed by regulatory authorities.
|
|
A.
|
History and Development of the Company
|
|
B.
|
Business Overview
|
Scientific Background
|
Trial number
|
Delivery Method
|
Trial Program and Cancer Indication
|
Location
|
Status
|
REO 022
|
Intravenous administration in combination with FOLFIRI
|
Phase I colorectal cancer
|
United States
|
Ongoing
|
REO 021
|
Intravenous administration in combination with paclitaxel and carboplatin (sponsored by the CTRC)
|
Phase II squamous cell carcinoma lung cancer
|
United States
|
Ongoing
|
REO 020
|
Intravenous administration in combination with paclitaxel and carboplatin (sponsored by the CTRC)
|
Phase II metastatic melanoma
|
United States
|
Ongoing
|
REO 018
|
Intravenous administration in combination with paclitaxel and carboplatin
|
Phase III squamous cell carcinoma of the head and neck
|
United States, U.K., Belgium, Canada
|
Ongoing
|
REO 017
|
Intravenous administration in combination with gemcitabine (sponsored by the CTRC)
|
Phase II advanced pancreatic cancer
|
United States
|
Ongoing
|
REO 016
|
Intravenous administration in combination with paclitaxel and carboplatin
|
Phase II non-small cell lung with K-RAS or EGFR-activated tumours
|
United States
|
Ongoing
|
Trial number
|
Delivery Method
|
Trial Program and Cancer Indication
|
Location
|
Status
|
REO 015
|
Intravenous administration in combination with paclitaxel and carboplatin
|
Phase II head and neck
|
United States
|
Ongoing
|
REO 014
|
Intravenous administration monotherapy
|
Phase II sarcoma
|
United States
|
Complete
|
REO 013
|
Intravenous administration monotherapy (sponsored by University of Leeds)
|
Translational metastatic colorectal
|
United Kingdom
|
Ongoing
|
NCI Trial
|
Intravenous administration monotherapy (NCI)
|
Phase II melanoma
|
United States
|
Ongoing
|
NCI Trial
|
Intravenous and intraperitoneal administration monotherapy (NCI)
|
Phase I/II ovarian
|
United States
|
Ongoing
|
REO 012
|
Intravenous administration in combination with cyclophosphamide
|
Phase I/II pancreatic, lung, ovarian
|
United Kingdom
|
Ongoing
|
REO 011
|
Intravenous administration in combination with paclitaxel and carboplatin
|
Phase I/II melanoma, lung, ovarian
|
United Kingdom
|
Complete
|
REO 010
|
Intravenous administration in combination with docetaxel
|
Phase I/II bladder, prostate, lung, upper gastro-intestinal
|
United Kingdom
|
Complete
|
REO 009
|
Intravenous administration in combination with gemcitabine
|
Phase I/II pancreatic, lung, ovarian
|
United Kingdom
|
Complete
|
Trial number
|
Delivery Method
|
Trial Program and Cancer Indication
|
Location
|
Status
|
REO 008
|
Local therapy in combination with radiation
|
Phase II various metastatic tumours, including head & neck
|
United Kingdom
|
Complete
|
REO 007
|
Infusion monotherapy
|
Phase I/II recurrent malignant gliomas
|
United States
|
Complete
|
REO 006
|
Local therapy in combination with radiation
|
Phase I various metastatic tumours
|
United Kingdom
|
Complete
|
REO 005
|
Intravenous administration monotherapy
|
Phase I various metastatic tumours
|
United Kingdom
|
Complete
|
REO 004
|
Intravenous administration monotherapy
|
Phase I various metastatic tumours
|
United States
|
Complete
|
REO 003
|
Local monotherapy
|
Phase I recurrent malignant gliomas
|
Canada
|
Complete
|
REO 002
|
Local monotherapy
|
T2 prostate cancer
|
Canada
|
Complete
|
REO 001
|
Local monotherapy
|
Phase I trial for various subcutaneous tumours
|
Canada
|
Complete
|
|
●
|
Develop REOLYSIN
®
by continuing to progress the product through our clinical trial program assessing the safety and efficacy in human subjects;
|
|
●
|
Establish collaborations with experts to assist us with scientific and clinical developments of this new potential pharmaceutical product;
|
|
●
|
Implement strategic alliances with selected pharmaceutical and biotechnology companies and selected laboratories, at a time and in a manner where such alliances may complement and expand our research and development efforts on the product and provide sales and marketing capabilities;
|
|
●
|
Utilize our broadening patent base and collaborator network as a mechanism to meet our strategic objectives; and
|
|
●
|
Develop relationships with companies that could be instrumental in assisting us to access other innovative therapeutics.
|
|
●
|
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.
|
|
●
|
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.
|
|
●
|
Pharmacological Studies
(or Phase I 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.
|
|
●
|
Therapeutic Studies
(or Phase II and III 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.
|
|
●
|
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.
|
|
C.
|
Organizational Structure
|
Contractual Obligations
|
Payments Due by Period
|
||||
Total
$
|
Less than 1
year
$
|
2 -3 years
$
|
4 – 5 years
$
|
After 5 years
$
|
|
Alberta Heritage Foundation
(1)
|
150,000
|
—
|
—
|
—
|
150,000
|
Capital lease obligations
|
Nil
|
—
|
—
|
—
|
—
|
Operating lease
(2)
|
478,709
|
65,674
|
275,012
|
138,023
|
—
|
Purchase obligations
|
1,140,000
|
1,140,000
|
—
|
—
|
—
|
Other long term obligations
|
Nil
|
—
|
—
|
—
|
—
|
Total contractual obligations
|
1,768,709
|
1,205,674
|
275,012
|
138,023
|
150,000
|
(2)
|
Our operating lease is comprised of our office lease and exclude our portion of operating costs.
|
|
A.
|
Directors and Senior Management
|
Name and Municipality of Residence
|
Position with the Corporation
|
Principal Occupation
|
Director of the Company Since
|
Bradley G. Thompson
Ph.D
(2)
Calgary, Alberta
|
Chief Executive Officer and Chairman of the Board
|
Executive Chairman of the Board, President and Chief Executive Officer of Oncolytics since April 1999.
|
April 21, 1999
|
Douglas A. Ball C.A.
Calgary, Alberta
|
Chief Financial Officer and Director
|
Chief Financial Officer of the Corporation since May 2000.
|
April 21, 1999
|
William A. Cochrane, OC, M.D.
(2),(3)
Calgary, Alberta
|
Director
|
President of W.A. Cochrane & Associates, Inc. (a consulting company) since 1989 and from April 2003 to December 2010, Chairman of Resverlogix Corp. (a public biopharmaceutical company) and is a Director of Immunovaccine Inc. Dr. Cochrane was formerly Chairman of QSV Biologics Ltd. (biologics contract manufacturer) from 2003 to 2009 and was a director of Sernova Corp. from 2005 to 2008, and a former chairman of University Technologies International Inc. (UTI) at the University of Calgary.
|
October 31, 2002
|
Matthew C. Coffey Ph.D.
Calgary, Alberta
|
Chief Operating Officer
|
Chief Operating Officer of the Corporation since December 2008. Since April 1999 to December 2008, Dr. Coffey held other senior management positions with the Corporation and is a co-founder of Oncolytics.
|
N/A
|
George M. Gill, M.D.
Washington, D.C.
|
Senior Vice President, Clinical and Regulatory Affairs
|
Dr. Gill has been a consultant in clinical research and regulatory affairs to the pharmaceutical and biotechnology industries since he retired from Ligand Pharmaceuticals in 1999. During his 38 years in the industry, he also served in senior executive positions with ICI Pharmaceuticals (now AstraZeneca), Bristol-Myers Squibb, and Hoffmann-La Roche. Dr. Gill holds a B.Sc. in chemistry from Dickinson College in Pennsylvania and an M.D. from the School of Medicine of the University of Pennsylvania in Philadelphia.
|
N/A
|
Name and Municipality of Residence
|
Position with the Corporation
|
Principal Occupation
|
Director of the Company Since
|
Robert B. Schultz, F.C.A.
(1), (4)
Toronto, Ontario
|
Lead Director
|
Former Chairman and Director of Rockwater Capital Corporation, formerly McCarvill Corporation (a financial services company) from 2001 to 2007. Mr. Schultz has held a variety of senior positions, and has participated on various industry-related boards and committees including Director and Chairman of the Investment Dealers Association of Canada.
|
June 30, 2000
|
Fred A. Stewart, Q.C.
(1)(2)
,
Calgary, Alberta
|
Director
|
Former practising lawyer in Calgary; President of Fred Stewart & Associates Inc., consultant in commercialization of technology. Mr Stewart has served in a number of positions of corporate governance, in both private and public organizations
|
August 27, 1999
|
J. Mark Lievonen, F.C.A.
(3)
Markham, Ontario
|
Director
|
President of Sanofi Pasteur Limited, a vaccine development, manufacturing and marketing company, since October 1998. Mr. Lievonen serves on a number of industry and not-for-profit boards including BIOTECanada, the Ontario Institute for Cancer Research and York University, and is a past Chair of BIOTECanada and the Ontario Genomics Institute. He was named a Chevalier de l'Ordre National de Merite by the government of France in 2007.
|
April 5, 2004
|
Name and Municipality of Residence
|
Position with the Corporation
|
Principal Occupation
|
Director of the Company Since
|
Karl Mettinger, M.D., Ph.D
Berkeley, CA
|
Chief Medical Officer
|
Dr. Mettinger has been our CMO since 2005. Dr. Mettinger has been involved in clinical and regulatory affairs with various pharmaceutical companies since 1985. Prior to joining Oncolytics, he was Senior Vice President and Chief Medical Officer with SuperGen Inc. Prior to that, he was Executive Director, Clinical Research at IVAX/Baker Norton, the new drug subsidiary of IVAX Corporation.
|
N/A
|
Jim Dinning
(1)
Calgary, Alberta
|
Director
|
Chair of Western Financial Group since September 2004. Mr. Dinning was Executive Vice President of TransAlta Corporation (power generation and wholesale marketing company) from 1997 to 2004. Mr. Dinning is the Chair of Export Development Canada and Canada West Foundation and serves as a director of other public and private companies. He is the Chancellor of the University of Calgary.
|
March 24, 2004
|
Ger van Amersfoort,
(2)
Oakville, Ont
|
Director
|
President and Chief Executive Officer of Novartis Canada, a pharmaceutical company, until his retirement in 2001.
|
June 15, 2006
|
Ed Levy, Ph.D,
(3)
Lund, BC
|
Director
|
Adjunct professor at the W. Maurice Young Centre for Applied Ethics at the University of British Columbia since retiring from QLT Inc. in late 2002.
|
May 17, 2006
|
Mary Ann Dillahunty, JD, MBA
Half Moon Bay, CA
|
Vice President, Intellectual Property
|
Ms. Dillahunty has been our VP-Intellectual Property since 2007. Prior to joining Oncolytics, Ms. Dillahunty was a principal in the law firm of Fish & Richardson, a leading intellectual property firm in the U.S.
|
N/A
|
|
1)
|
These persons are members of the Audit Committee. Mr. Stewart is the Chair of the Audit Committee.
|
|
2)
|
These persons are members of the Compensation Committee. Mr. Stewart is the Chair of the Compensation Committee.
|
|
3)
|
These persons are members of the Corporate Governance and Nominating Committee. Mr. Lievonen is the Chair of the Corporate Governance and Nominating Committee.
|
|
4)
|
As Lead Director, Mr. Schultz is an ex-officio member of the Compensation and Nominating Committees.
|
|
B.
|
Executive Compensation
|
Name
|
Fees &
Retainers Earned
($)
|
Share-
Based Awards
($)
|
Option-
Based Awards
(1)
($)
|
Non-Equity Incentive Plan Compensation
($)
|
Pension Value
($)
|
All Other Compensation
($)
|
Total
($)
|
Dr. W. Cochrane
|
29,000
|
N/A
|
99,000
|
None
|
N/A
|
None
|
128,000
|
Mr. G. van Amersfoort
|
27,250
|
N/A
|
99,000
|
None
|
N/A
|
None
|
126,250
|
Mr. J. Dinning
|
29,000
|
N/A
|
99,000
|
None
|
N/A
|
None
|
128,000
|
Mr. M. Lievonen
|
25,500
|
N/A
|
99,000
|
None
|
N/A
|
None
|
124,500
|
Dr. E. Levy
|
25,500
|
N/A
|
99,000
|
None
|
N/A
|
None
|
124,500
|
Mr. R. Schultz
|
46,000
|
N/A
|
264,000
|
None
|
N/A
|
None
|
310,000
|
Mr. F. Stewart
|
40,250
|
N/A
|
148,500
|
None
|
N/A
|
None
|
188,750
|
(1)
|
Options include grants from July and December 2010. The options granted in July, 2010 have an estimated grant date fair value of $1.32, and the options granted in December 2010 have an estimated grant date fair value of $3.30 per option using the following respective grant date assumptions: expected life of option, 3 years for both; volatility 61.7% and 74.9% respectively; risk free interest rate 1.55% and 1.95% respectively; dividend yield 0% for both.
|
Name and principal position
|
Year
|
Salary
$
|
Share-
based awards
$
|
Option-
based awards
(3)
$
|
Non-equity incentive
plan compensation
$
|
Pension value
$
|
All other compensation
($)
(1)
|
Total
compensation ($) |
|
Dr. Bradley G.
|
2010
|
444,996
|
N/A
|
709,500
|
150,163
|
N/A
|
N/A
|
50,712
|
1,355,371
|
Thompson
|
2009
|
444,996
|
N/A
|
59,500
|
106,800
|
N/A
|
N/A
|
40,200
|
651,496
|
Chief Executive Officer
|
2008
|
444,996
|
N/A
|
None
|
None
|
N/A
|
N/A
|
46,700
|
491,696
|
Douglas A. Ball
|
2010
|
257,567
|
N/A
|
643,500
|
46,362
|
N/A
|
N/A
|
36,649
|
984,078
|
Chief Financial
|
2009
|
257,567
|
N/A
|
35,700
|
46,000
|
N/A
|
N/A
|
34,654
|
373,921
|
Officer
|
2008
|
257,567
|
N/A
|
None
|
None
|
N/A
|
N/A
|
35,454
|
293,021
|
Dr. Matt C.
|
2010
|
326224
|
N/A
|
379,500
|
88,080
|
N/A
|
N/A
|
42,913
|
836,717
|
Coffey
|
2009
|
326,224
|
N/A
|
35,700
|
46,000
|
N/A
|
N/A
|
38,520
|
446,444
|
Chief Operating Officer
|
2008
|
326,224
|
N/A
|
None
|
None
|
N/A
|
N/A
|
39,573
|
365,797
|
Dr. Karl
|
2010
|
318,270
|
N/A
|
132,000
|
30,076
|
N/A
|
N/A
|
38,686
|
519,032
|
Mettinger
(2)
|
2009
|
333,101
|
N/A
|
35,700
|
38,000
|
N/A
|
N/A
|
40,709
|
447,510
|
Chief Medical Officer
|
2008
|
333,101
|
N/A
|
None
|
None
|
N/A
|
N/A
|
40,709
|
373,810
|
Mary Ann
|
2010
|
153,665
|
N/A
|
82,500
|
19,467
|
N/A
|
N/A
|
19,066
|
274,698
|
Dillahunty
(2)
|
2009
|
161,700
|
N/A
|
17,850
|
24,720
|
N/A
|
N/A
|
20,063
|
224,333
|
VP Intellectual Property
|
2008
|
242,550
|
N/A
|
None
|
None
|
N/A
|
N/A
|
32,661
|
275,211
|
|
(1)
|
The dollar amounts set forth under this column are related to RRSP contributions and amounts provided for health care benefits by the Corporation for the Named Executive Officers. For Named Executive Officers resident in Canada these benefits are provided in accordance the Corporation’s registered Health Benefit Plan.
|
|
(2)
|
U.S. Employees are paid salaries and other compensation in U.S. Dollars. All amounts paid in U.S. Dollars for each U.S. Employee have been converted using the exchange rate of .9946 at December 31, 2010 and are indicated in Canadian Dollars.
|
|
(3)
|
The options granted in July, 2010 have an estimated grant date fair value of $1.32, and the options granted in December 2010 have an estimated grant date fair value of $3.30 per option using the following respective grant date assumptions: expected life of option, 3 years for both; volatility 61.7% and 74.9% respectively; risk free interest rate 1.55% and 1.95% respectively; dividend yield 0% for both.
|
Name and principal position
|
Year
|
Salary
$
|
Dr. Bradley G. Thompson
|
2011
|
489,500
|
Chief Executive Officer
|
||
Douglas A. Ball
|
2011
|
283,800
|
Chief Financial Officer
|
||
Matt C. Coffey
|
2011
|
330,139
|
Chief Operating Officer
|
||
Karl Mettinger
|
2011
|
322,289
(1)
|
Chief Medical Officer
|
||
Mary Ann Dillahunty
|
2011
|
156,354
(1)
|
VP Intellectual Property
|
||
Name
|
Termination without Cause
(1)
|
Change of Control
(2)
|
Severance ($)
|
Severance ($)
|
|
Dr. Bradley G. Thompson
Chief Executive Officer
|
1,104,668
|
1,657,001
|
Douglas A. Ball, C.A.
Chief Financial Officer
|
329,664
|
659,327
|
Dr. Matt C. Coffey
Chief Operating Officer
|
379,825
|
759,651
|
Dr. Karl Mettinger
Chief Medical Officer
(1)
|
361,185
|
722,370
|
Mary Ann Dillahunty,
J.D. M.B.A., VP Intellectual Property
(2)
|
175,524
|
351,048
|
|
(1)
|
As at December 31, 2010 all options granted to Officers had fully vested. As a result, all Officers shall be entitled to exercise all or any part of their Options, within the period ending on the earlier of the date of expiration of the Option and the ninetieth (90th) day after the date such Officer is terminated.
|
|
(2)
|
On a change of control of the Corporation, the Officers 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 ninetieth (90th) day after the date such Officer is terminated.
|
|
C.
|
Board Practices
|
Name and Municipality of Residence
|
Position with the Corporation
|
Director of the Corporation Since
|
Date of Expiration of Current Term of Office
|
Bradley G. Thompson
Ph.D
Calgary, Alberta
|
President, Chief Executive Officer and Chairman of the Board
|
April 21, 1999
|
Date of 2011 Annual General Meeting of the Shareholders
|
Douglas A. Ball C.A.
Calgary, Alberta
|
Chief Financial Officer and Director
|
April 21, 1999
|
Date of 2011 Annual General Meeting of the Shareholders
|
William A. Cochrane, OC, M.D.
(2),(3)
Calgary, Alberta
|
Director
|
October 31, 2002
|
Date of 2011 Annual General Meeting of the Shareholders
|
Robert B. Schultz, F.C.A.
(1), (4)
Toronto, Ontario
|
Lead Director
|
June 30, 2000
|
Date of 2011 Annual General Meeting of the Shareholders
|
Fred A. Stewart, Q.C.
(1)(2)
,
Calgary, Alberta
|
Director
|
August 27, 1999
|
Date of 2011 Annual General Meeting of the Shareholders
|
J. Mark Lievonen, F.C.A.
(3)
Markham, Ontario
|
Director
|
April 5, 2004
|
Date of 2011 Annual General Meeting of the Shareholders
|
Jim Dinning
(1)
Calgary, Alberta
|
Director
|
March 24, 2004
|
Date of 2011 Annual General Meeting of the Shareholders
|
Ger van Amersfoort,
(2)
Oakville, Ont
|
Director
|
June 15, 2006
|
Date of 2011 Annual General Meeting of the Shareholders
|
Ed Levy, Ph.D,
(3)
Lund, BC
|
Director
|
May 17, 2006
|
Date of 2011 Annual General Meeting of the Shareholders
|
|
1)
|
These persons are members of the Audit Committee. Mr. Stewart is the Chair of the Audit Committee.
|
|
2)
|
These persons are members of the Compensation Committee. Mr. Stewart is the Chair of the Compensation Committee.
|
|
3)
|
These persons are members of the Corporate Governance and Nominating Committee. Mr. Lievonen is the Chair of the Corporate Governance and Nominating Committee.
|
|
4)
|
As Lead Director, Mr. Schultz is an “ex officio” member of the Corporate Governance and Compensation Committees.
|
|
a.
|
The Committee shall consist of a minimum of two (2) directors, at least half of whom shall be resident Canadians. The Board shall appoint the members of the Committee and may seek the advice and assistance of the Corporate Governance and Nominating Committee in identifying qualified candidates. The Board shall appoint one member of the Committee to be the Chair of the Committee, or delegate such authority to appoint the Chair of the Committee to the Committee.
|
|
b.
|
The Chair of the Committee shall be responsible for the leadership of the Committee, including preparing or approving the agenda, presiding over the meetings, and making committee assignments.
|
|
c.
|
Each director appointed to the Committee by the Board shall be an outside director who is unrelated. An outside, unrelated director is a director who meets the requirements of NASDAQ Rule 4200 and National Instrument 58-101 who is independent of management and is free from any interest, any business or other relationship which could, or could reasonably be perceived, to materially interfere with the director’s ability to act with a view to the best interests of the Corporation, other than interests and relationships arising from shareholding. In determining whether a director is independent of management, the Board shall make reference to the then current legislation, rules, policies and instruments of applicable regulatory authorities.
|
|
d.
|
A director appointed by the Board to the Committee shall be a member of the Committee until replaced by the Board or until his or her resignation.
|
|
a.
|
The Committee shall convene a minimum of once each year at such times and places as may be designated by the Chair of the Committee and whenever a meeting is requested by the Board, a member of the Committee, or the Chief Executive Officer of the Corporation (the "CEO").
|
|
b.
|
Notice of each meeting of the Committee shall be given to each member of the Committee and the CEO, who shall each be entitled to attend each meeting of the Committee and shall attend whenever requested to do so by a member of the Committee.
|
|
c.
|
Notice of a meeting of the Committee shall:
|
|
c. i.
|
be in writing, including by electronic communication facilities;
|
|
c. ii.
|
state the nature of the business to be transacted at the meeting in reasonable detail;
|
|
c. iii.
|
to the extent practicable, be accompanied by copies of documentation to be considered at the meeting; and
|
|
c. iv.
|
be given at least two business days prior to the time stipulated for the meeting or such shorter period as the members of the Committee may permit.
|
|
d.
|
A quorum for the transaction of business at a meeting of the Committee shall consist of a majority of the members of the Committee. However, it shall be the practice of the Committee to require review, and, if necessary, approval of certain important matters by all members of the Committee.
|
|
e.
|
A member or members of the Committee may participate in a meeting of the Committee by means of such telephonic, electronic or other communication facilities, as permits all persons participating in the meeting to communicate adequately with each other. A member participating in such a meeting by any such means is deemed to be present at the meeting.
|
|
f.
|
In the absence of the Chair of the Committee, the members of the Committee shall choose one of the members present to be Chair of the meeting. In addition, the members of the Committee shall choose one of the persons present to be the Secretary of the meeting.
|
|
g.
|
Minutes shall be kept of all meetings of the Committee and shall be signed by the Chair and the Secretary of the meeting.
|
|
a.
|
The Committee shall, at the earliest opportunity after each meeting, report to the Board the results of its activities and any reviews undertaken and make recommendations to the Board as deemed appropriate.
|
|
b.
|
The Committee’s primary duties and responsibilities are to review and make recommendations to the Board in respect of:
|
|
g. i.
|
human resource policies, practices and structures (to monitor consistency with the Corporation’s goals and near and long-term strategies, support of operational effectiveness and efficiency, and maximization of human resources potential);
|
|
g. ii.
|
compensation policies and guidelines;
|
|
g. iii.
|
management incentive and perquisite plans and any non-standard remuneration plans;
|
|
g. iv.
|
senior management, executive and officer appointments and their compensation;
|
|
g. v.
|
management succession plans, management training and development plans, termination policies and termination arrangements;
|
|
g. vi.
|
Board compensation matters.
|
|
c.
|
In carrying out its duties and responsibilities, the Committee shall:
|
|
a. i.
|
annually assess and make a recommendation to the Board with regard to the competitiveness and appropriateness of the compensation package of the CEO, all other officers of the Corporation and such other key employees of the Corporation or any subsidiary of the Corporation as may be identified by the CEO and approved by the Committee (collectively, the "Designated Employees");
|
|
a. ii.
|
annually review the performance goals and criteria for the CEO and evaluate the performance of the CEO against such goals and criteria and recommend to the Board the amount of regular and incentive compensation to be paid to the CEO;
|
|
a. iii.
|
annually, review and make a recommendation to the Board regarding the CEO’s performance evaluation of Designated Employees and his recommendations with respect to the amount of regular and incentive compensation to be paid to such Designated Employees;
|
|
a. iv.
|
review and make a recommendation to the Board regarding any employment contracts or arrangements with each of the Designated Employees, including any retiring allowance arrangements or any similar arrangements to take effect in the event of a termination of employment;
|
|
a. v.
|
periodically, review the compensation philosophy statement of the Corporation and make recommendations for change to the Board as considered necessary;
|
|
a. vi.
|
from time to time, review and make recommendations to the Board in respect of the design, benefit provisions, investment options and text of applicable pension, retirement and savings plans or related matters;
|
|
a. vii.
|
annually, in conjunction with the Corporation’s general and administrative budget, review and make recommendations to the Board regarding compensation guidelines for the forthcoming budget period;
|
|
a. viii.
|
when requested by the CEO, review and make recommendations to the Board regarding short term incentive or reward plans and, to the extent delegated by the Board, approve awards to eligible participants;
|
|
a. ix.
|
review and make recommendations to the Board regarding incentive stock option plans or any other long term incentive plans and to the extent delegated by the Board, approve grants to participants and the magnitude and terms of their participation;
|
|
a. x.
|
as required, fulfill the obligations assigned to the Committee pursuant to any other employee benefit plans approved by the Board;
|
|
a. xi.
|
annually, prepare or review the report on executive compensation required to be disclosed in the Corporation’s information circular or any other human resource or compensation matter required to be publicly disclosed by the Corporation;
|
|
a. xii.
|
periodically, but at least every third year, review and make a recommendation to the Board regarding the compensation of the Board of Directors;
|
|
a. xiii.
|
as required, retain independent advice in respect of human resources and compensation matters and, if deemed necessary by the Committee, meet separately with such advisors; and
|
|
a. xiv.
|
assess, on an annual basis, the adequacy of this Mandate and the performance of the Committee.
|
|
d.
|
In addition to the foregoing, the Committee shall undertake on behalf of the Board such other initiatives as may be necessary or desirable to assist the Board in discharging its responsibility to ensure that appropriate human resources development, performance evaluation, compensation and succession planning programs are in place and operating effectively.
|
|
a.
|
be in writing, including by electronic communication facilities;
|
|
b.
|
state the nature of the business to be transacted at the meeting in reasonable detail;
|
|
c.
|
to the extent practicable, be accompanied by copies of documentation to be considered at the meeting; and
|
|
d.
|
be given at least two business days prior to the time stipulated for the meeting or such shorter period as the members of the Audit Committee may permit.
|
|
a.
|
identify and monitor the management of the principal risks that could impact the financial reporting of the Corporation ;
|
|
b.
|
monitor the integrity of the Corporation’s financial reporting process and system of internal controls regarding financial reporting and accounting compliance;
|
|
c.
|
monitor the independence and performance of the Corporation’s external auditors. This will include receipt, review and evaluation, at least annually, of a formal written statement from the independent auditors confirming their independence, and qualifications, including their compliance with the requirements of the relevant oversight boards ;
|
|
d.
|
deal directly with the external auditors to pre-approve external audit plans, other services (if any) and fees;
|
|
e.
|
directly oversee the external audit process and results (in addition to items described in Section 4(d) below);
|
|
f.
|
provide an avenue of communication among the external auditors, management and the Board;
|
|
g.
|
carry out a review designed to ensure that an effective "whistle blowing" procedure exists to permit stakeholders to express any concerns regarding accounting, internal controls, auditing matters or financial matters to an appropriately independent individual;
|
|
h.
|
pre-approve any related party transactions to be entered into by the Company, and ensure appropriate disclosure thereof;
|
|
i.
|
ensure financial disclosure incorporates inclusion of any material correcting adjustments required by the external auditors; and
|
|
j.
|
require and ensure that the external auditors are directly responsible to the Audit Committee, to whom they report
|
|
a.
|
inspect any and all of the books and records of the Corporation and its affiliates;
|
|
b.
|
discuss with the management of the Corporation and its affiliates, any affected party and the external auditors, such accounts, records and other matters as any member of the Audit Committee considers necessary and appropriate;
|
|
c.
|
engage independent counsel and other advisors as it determines necessary to carry out its duties; and
|
|
d.
|
to set and pay the compensation for any advisors employed by the Audit Committee.
|
|
a.
|
review the audit plan with the Corporation’s external auditors and with management;
|
|
b.
|
review with the independent auditors the matters required to be discussed relating to the conduct of the audit, including (a) the proposed scope of their examination, with emphasis on accounting and financial areas where the Committee, the independent auditors or management believes special attention should be directed; (b) the results of their audit, including their audit findings report and resulting letter, if any, of recommendations for management; (c) their evaluation of the adequacy and effectiveness of the Company’s internal controls over financial reporting; (d) significant areas of disagreement, if any, with management; (e) co-operation received from management in the conduct of the audit; (f) significant accounting, reporting, regulatory or industry developments affecting the Company; and (g) review any proposed changes in major accounting policies or principles proposed or contemplated by the independent auditors or management, the presentation and impact of material risks and uncertainties and key estimates and judgements of management that may be material to financial reporting;
|
|
c.
|
review with management and with the external auditors material financial reporting issues arising during the most recent fiscal period and the resolution or proposed resolution of such issues;
|
|
d.
|
review any problems experienced or concerns expressed by the external auditors in performing an audit, including any restrictions imposed by management or material accounting issues on which there was a disagreement with management;
|
|
e.
|
review with senior management the process of identifying, monitoring and reporting the principal risks affecting financial reporting;
|
|
f.
|
review audited annual financial statements (including management discussion and analysis) and related documents in conjunction with the report of the external auditors and obtain an explanation from management of all material variances between comparative reporting periods. Without restricting the generality of the foregoing, the committee will discuss with management and the independent auditors to the extent required, any issues and disclosure requirements regarding (a) the use of “pro forma” or “adjusted” non-GAAP information, as well as financial information and earnings guidance provided to analysts and rating agencies, (b) any off balance sheet arrangements, and (c) any going concern qualification.
|
|
g.
|
consider and review with management, the internal control memorandum or management letter containing the recommendations of the external auditors and management’s response, if any, including an evaluation of the adequacy and effectiveness of the internal financial controls of the Corporation and subsequent follow-up to any identified weaknesses;
|
|
h.
|
review with financial management and the external auditors the quarterly unaudited financial statements and management discussion and analysis before release to the public;
|
|
i.
|
before release, review and if appropriate, recommend for approval by the Board, all public disclosure documents containing audited or unaudited financial information, including any prospectuses, annual reports, annual information forms, management discussion and analysis and press releases; and
|
|
j.
|
oversee, any of the financial affairs of the Corporation or its affiliates, and, if deemed appropriate, make recommendations to the Board, external auditors or management.
|
|
a.
|
evaluate the independence and performance of the external auditors and annually recommend to the Board the appointment of the external auditor or the discharge of the external auditor when circumstances are warranted and monitor the audit partners’ rotation as required by law.;
|
|
b.
|
consider the recommendations of management in respect of the appointment of the external auditors;
|
|
c.
|
pre-approve all non-audit services to be provided to the Corporation or its subsidiary entities by its external auditors', or the external auditors of affiliates of the Corporation subject to the over-riding principle that the external auditors not being permitted to be retained by the Corporation to perform specifically listed categories of non-audit services as set forth by the Securities and Exchange Commission as well as internal audit outsourcing services, financial information systems work and expert services. Notwithstanding, the foregoing the pre-approval of non-audit services may be delegated to a member of the Audit Committee, with any decisions of the member with the delegated authority reporting to the Audit Committee at the next scheduled meeting;
|
|
d.
|
approve the engagement letter for non-audit services to be provided by the external auditors or affiliates, together with estimated fees, and considering the potential impact of such services on the independence of the external auditors;
|
|
e.
|
when there is to be a change of external auditors, review all issues and provide documentation related to the change, including the information to be included in the Notice of Change of Auditors and documentation required pursuant to the then current legislation, rules, policies and instruments of applicable regulatory authorities and the planned steps for an orderly transition period; and
|
|
f.
|
review all reportable events, including disagreements, unresolved issues and consultations, as defined by applicable securities policies, on a routine basis, whether or not there is to be a change of external auditors.
|
|
a.
|
the receipt, retention and treatment of complaints received by the Corporation regarding accounting controls, or auditing matters; and
|
|
b.
|
the confidential, anonymous submission by employees of the Corporation or concerns regarding questionable accounting or auditing matters.
|
|
D.
|
Employees
|
Activity
|
2010
|
2009
|
2008
|
Research and development
|
13
|
9
|
10
|
Operating
|
4
|
5
|
6
|
Total
|
17
|
14
|
16
|
Geographic location
|
2010
|
2009
|
2008
|
Canada
|
15
|
12
|
14
|
United States of America
|
2
|
2
|
2
|
Total
|
17
|
14
|
16
|
|
E.
|
Share Ownership
|
Common Shares
|
Percentage of
Ownership(1) |
Options(2)
|
Exercise
Price |
Expiry Date
|
Percentage
of Outstanding (1)(3) |
|
Officers
|
||||||
Bradley Thompson
|
652,900
|
**
|
15,000
|
12.15
|
Dec 14, 2010
|
|
18,000
|
9.76
|
Jun 20, 2011
|
||||
25,000
|
7.25
|
Dec 17, 2011
|
||||
50,000
|
2.70
|
May 16, 2012
|
||||
10,000
|
2.00
|
Dec 13, 2012
|
||||
59,000
|
3.33
|
Aug 5, 2013
|
||||
80,000
|
4.50
|
Dec 11, 2013
|
||||
30,000
|
8.10
|
May 28, 2014
|
||||
350,000
|
5.00
|
Dec 9, 2014
|
||||
149,160
|
2.22
|
Dec 12, 2017
|
||||
50,000
|
3.06
|
Dec 8, 2019
|
||||
215,000
|
6.72
|
Dec 14, 2020
|
||||
1,051,160
|
2.19%
|
Common Shares
|
Percentage of
Ownership(1) |
Options(2)
|
Exercise
Price |
Expiry Date
|
Percentage
of Outstanding (1)(3) |
Matthew Coffey
|
288,550
|
**
|
15,000
|
12.15
|
Dec 14, 2010
|
|
18,000
|
9.76
|
Jun 20, 2011
|
||||
20,000
|
7.25
|
Dec 17, 2011
|
||||
37,500
|
2.70
|
May 16, 2012
|
||||
10,000
|
2.00
|
Dec 13, 2012
|
||||
53,500
|
3.33
|
Aug 5, 2013
|
||||
40,000
|
4.50
|
Dec 11, 2013
|
||||
20,000
|
8.10
|
May 28, 2014
|
||||
180,000
|
5.00
|
Dec 9, 2014
|
||||
33,333
|
2.22
|
Dec 12, 2017
|
||||
30,000
|
3.06
|
Dec 8, 2019
|
||||
115,000
|
6.72
|
Dec 14, 2020
|
||||
572,333
|
1.11%
|
|||||
Douglas Ball
|
8,000
|
**
|
15,000
|
12.15
|
Dec 14, 2010
|
|
27,000
|
9.76
|
Jun 20, 2011
|
||||
20,000
|
7.25
|
Dec 17, 2011
|
||||
37,500
|
2.70
|
May 16, 2012
|
||||
10,000
|
2.00
|
Dec 13, 2012
|
||||
37,000
|
3.33
|
Aug 5, 2013
|
||||
40,000
|
4.50
|
Dec 11, 2013
|
||||
20,000
|
8.10
|
May 28, 2014
|
||||
180,000
|
5.00
|
Dec 9, 2014
|
||||
33,333
|
2.22
|
Dec 12, 2017
|
||||
30,000
|
3.06
|
Dec 8, 2019
|
||||
250,000
|
3.13
|
July 28, 2020
|
||||
95,000
|
6.72
|
Dec 14, 2020
|
||||
794,833
|
1.03%
|
|||||
Mary Ann Dillahunty
|
2,201
|
**
|
100,000
|
3.28
|
Feb 1, 2017
|
|
16,667
|
2.22
|
Dec 12, 2007
|
||||
15,000
|
3.06
|
Dec 8, 2019
|
||||
131,667
|
**
|
|||||
Karl Mettinger
|
2,000
|
**
|
200,000
|
3.18
|
Sept 23, 2015
|
|
30,000
|
3.06
|
Dec 8, 2019
|
||||
40,000
|
6.72
|
Dec 14, 2020
|
||||
270,000
|
**
|
|||||
George Gill
|
—
|
**
|
20,000
|
7.50
|
Oct 18, 2011
|
|
87,000
|
1.85
|
Oct 10, 2012
|
||||
17,000
|
3.33
|
Aug 5, 2013
|
||||
40,000
|
4.50
|
Dec 11, 2013
|
||||
7,500
|
8.10
|
May 28, 2014
|
||||
12,500
|
5.00
|
Dec 9, 2014
|
||||
16,667
|
2.22
|
Dec 12, 2017
|
||||
15,000
|
3.06
|
Dec 8, 2019
|
||||
25,000
|
3.72
|
Dec 14, 2020
|
||||
240,667
|
**
|
Common Shares
|
Percentage of
Ownership(1) |
Options(2)
|
Exercise
Price |
Expiry Date
|
Percentage
of Outstanding (1)(3) |
Directors
|
||||||
Robert Schultz
|
10,000
|
**
|
9,000
|
9.76
|
Jun 20, 2011
|
|
10,000
|
7.25
|
Dec 17, 2011
|
||||
7,500
|
2.70
|
May 16, 2012
|
||||
10,000
|
2.00
|
Dec 13, 2012
|
||||
34,000
|
3.33
|
Aug 5, 2013
|
||||
10,000
|
4.50
|
Dec 11, 2013
|
||||
5,000
|
8.10
|
May 28, 2014
|
||||
22,500
|
5.00
|
Dec 9, 2014
|
||||
10,000
|
2.25
|
Dec 15, 2016
|
||||
17,500
|
2.22
|
Dec 12, 2017
|
||||
17,500
|
3.06
|
Dec 8, 2019
|
||||
50,000
|
3.13
|
July 28, 2020
|
||||
60,000
|
6.72
|
Dec 14, 2020
|
||||
263,000
|
**
|
|||||
Fred Stewart
|
46,000
|
**
|
9,000
|
9.76
|
Jun 20, 2011
|
|
10,000
|
7.25
|
Dec 17, 2011
|
||||
7,500
|
2.70
|
May 16, 2012
|
||||
10,000
|
2.00
|
Dec 13, 2012
|
||||
21,000
|
3.33
|
Aug 5, 2013
|
||||
10,000
|
4.50
|
Dec 11, 2013
|
||||
5,000
|
8.10
|
May 28, 2014
|
||||
22,500
|
5.00
|
Dec 9, 2014
|
||||
10,000
|
2.25
|
Dec 15, 2016
|
||||
17,500
|
2.22
|
Dec 12, 2017
|
||||
17,500
|
3.06
|
Dec 8, 2019
|
||||
45,000
|
6.72
|
Dec 14, 2020
|
||||
185,000
|
**
|
|||||
Jim Dinning
|
20,000
|
**
|
50,000
|
6.90
|
Mar 29, 2014
|
|
5,000
|
8.10
|
May 28, 2014
|
||||
22,500
|
5.00
|
Dec 9, 2014
|
||||
10,000
|
2.25
|
Dec 15, 2016
|
||||
17,500
|
2.22
|
Dec 12, 2017
|
||||
17,500
|
3.06
|
Dec 8, 2019
|
||||
30,000
|
6.72
|
Dec 14, 2020
|
||||
152,500
|
**
|
|||||
Mark Lievonen
|
3,000
|
**
|
50,000
|
9.38
|
Apr 5, 2014
|
|
5,000
|
8.10
|
May 28, 2014
|
||||
22,500
|
5.00
|
Dec 9, 2014
|
||||
10,000
|
2.25
|
Dec 15, 2016
|
||||
17,500
|
2.22
|
Dec 12, 2017
|
||||
17,500
|
3.06
|
Dec 8, 2019
|
||||
30,000
|
6.72
|
Dec 14, 2020
|
||||
152,500
|
**
|
Common Shares
|
Percentage of
Ownership(1) |
Options(2)
|
Exercise
Price |
Expiry Date
|
Percentage
of Outstanding (1)(3) |
William Cochrane
|
54,700
|
**
|
4,000
|
3.33
|
Aug 5, 2013
|
|
10,000
|
4.50
|
Dec 11, 2013
|
||||
5,000
|
8.10
|
May 28, 2014
|
||||
22,500
|
5.00
|
Dec 9, 2014
|
||||
10,000
|
2.25
|
Dec 15, 2016
|
||||
17,500
|
2.22
|
Dec 12, 2017
|
||||
17,500
|
3.06
|
Dec 8, 2019
|
||||
30,000
|
6.72
|
Dec 14, 2020
|
||||
116,500
|
**
|
|||||
Ed Levy
|
15,300
|
**
|
50,000
|
4.10
|
May 16, 2016
|
|
10,000
|
2.25
|
Dec 15, 2016
|
||||
17,500
|
2.22
|
Dec 12, 2017
|
||||
17,500
|
3.06
|
Dec 8, 2019
|
||||
30,000
|
6.72
|
Dec 14, 2020
|
||||
125,000
|
**
|
|||||
Ger van Amersfoort
|
10,200
|
**
|
50,000
|
3.60
|
Jun 15, 2016
|
|
10,000
|
2.25
|
Dec 15, 2016
|
||||
17,500
|
2.22
|
Dec 12, 2017
|
||||
17,500
|
3.06
|
Dec 8, 2019
|
||||
30,000
|
6.72
|
Dec 14, 2020
|
||||
125,000
|
**
|
|||||
TOTAL:
|
1,112,851
|
4,160,160
|
|
1)
|
Based on 67,958,302 common shares issued and outstanding on December 31, 2010.
|
|
2)
|
Options exercisable to acquire common shares.
|
|
3)
|
Ownership percentage assumes aggregate beneficial ownership of common shares, common shares acquirable upon exercise of options and fully diluted share outstanding of 77,988,522.
|
|
A.
|
Major Shareholders
|
Name of
Shareholder |
Total Number of Common
Shares Held |
Percentage of
Outstanding
%
|
|||
Acuity Investment Management Inc.
|
9,570,500
|
13.70
|
Total Number of Holders of Record
|
Total Number of Common Shares
issued and
Outstanding
|
Number of U.S. Holders of Record
(2)
|
Number of Common Shares Held by U.S. Holders of Record
|
Percentage of Common Shares Held by U.S. Holders of Record
|
||||
202
|
71,207,318
|
56
|
6,063,614
|
8.52%
|
|
B.
|
Related Party Transactions
|
|
C.
|
Interests of Experts and Council
|
|
A.
|
Consolidated Statements and Other Financial Statements
|
|
B.
|
Significant Changes
|
|
A.
|
Offering and Listing Details
|
|
B.
|
Plan of Distribution
|
|
C.
|
Markets
|
|
E.
|
Dilution
|
|
F.
|
Expenses of the Issue
|
|
A.
|
Share Capital
|
|
B.
|
Memorandum and Articles of Association
|
|
●
|
delaying or prohibiting a change in control of our company that operate only with respect to a merger, acquisition or corporate restructuring;
|
|
●
|
discriminating against any existing or prospective holder of shares as a result of such shareholder owning a substantial number of shares;
|
|
●
|
requiring disclosure of share ownership; or
|
|
●
|
governing changes in capital, where such provisions are more stringent than those required by law.
|
|
D.
|
Exchange Controls
|
|
E.
|
Taxation
|
● | an individual who is a citizen or resident of the U.S.; |
● | a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the U.S., any state thereof or the District of Columbia; |
● | an estate whose income is subject to U.S. federal income taxation regardless of its source; or |
● | 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. |
|
F.
|
Dividends and Paying Agents
|
|
G.
|
Statements by Experts
|
|
H.
|
Documents on Display
|
|
I.
|
Subsidiary Information
|
|
A.
|
Modification of Instruments Defining Rights of Security Holders.
|
|
B.
|
Modification or Issuance of Other Class of Securities.
|
|
C.
|
Withdrawal or Substitution of Security
|
|
D.
|
Change of Trustee or Paying Agent
|
|
E.
|
Use of Proceeds
|
|
A.
|
Evaluation of Disclosure Controls and Procedures
|
|
B.
|
Management’s Annual Report on Internal Control Over Financial Reporting
|
|
C.
|
Attestation report of the register public accounting firms
|
|
D.
|
Changes in Internal Controls over Financial Reporting
|
December 31,
|
||||
Item
|
2010
$
|
2009
$
|
2008
$
|
|
Audit fees
|
190,448
|
177,396
|
140,961
|
|
Audit-related fees
(1),(3),
|
65,994
|
107,654
|
121,440
|
|
Tax fees
(2)
|
26,041
|
21,626
|
17,316
|
|
All other fees
(4)
|
23,675
|
2,098
|
112,352
|
1)
|
Includes review of interim financial statements, accounting consultations and subscription to on-line accounting services.
|
2)
|
Comprised of tax return preparation, scientific research and development return and other tax consultation fees.
|
3)
|
Includes fees associated with matters relating to a prospectus offering and base shelf prospectus filing (2009 - the prospectus offerings and a private company purchase; 2008 – the base shelf prospectus and prospectus offering).
|
4)
|
Includes fees associated with the adoption of International Financial Reporting Standards and the expansion of our corporate structure.
|
EXHIBIT
NUMBER |
DESCRIPTION |
Constating Documents
|
|
1.1*
|
Articles of Incorporation
|
1.2*
|
By-laws
|
Material Contracts
|
|
4.1**
|
Services Agreement, dated October 16, 2002, between the Company and its Senior Vice President, Clinical and Regulatory Affairs, George Gill
|
4.2***
|
Amending Agreement No. 1, dated January 6, 2005, to the Services Agreement between the Company and its Senior Vice President, Clinical and Regulatory Affairs, George Gill, dated October 16, 2001
|
4.3***
|
Employment Agreement, dated January 12, 2007, between the Company and its Vice President, Intellectual Property, Mary Ann Dillahunty
|
4.4***
|
Executive Employment Agreement, dated May 29, 2007, between the Company and its Chief Scientific Officer, Matthew Coffey
|
4.5***
|
Executive Employment Agreement, dated May 29, 2007, between the Company and its Chief Medical Officer, Dr. Karl Mettinger
|
4.6***
|
Executive Employment Agreement, dated May 30, 2007, between the Company and its Chief Financial Officer, Douglas Ball
|
4.7***
|
Executive Employment Agreement, dated June 6, 2007, between the Company and its Chief Executive Officer, Bradley Thompson
|
4.8***
|
Amending Agreement No. 1, dated December 3, 2007, to the Employment Agreement between the Company and its Vice President, Intellectual Property, Mary Ann Dillahunty, dated January 12, 2007
|
4.9****
|
Amendment No. 1, dated March 7, 2008, to the Executive Employment Agreement between the Company and its Chief Financial Officer, Douglas Ball, dated May 30, 2007
|
4.10****
|
Amendment No.1, dated March 7, 2008, between the Company and its Chief Scientific Officer, Matthew Coffey, dated May 29, 2007
|
4.11****
|
Amendment No. 1, dated March 7, 2008, to the Executive Employment Agreement between the Company and its Chief Executive Officer, Bradley Thompson, dated June 6, 2007
|
4.12****
|
Amendment No. 1, dated March 20, 2008, to the Employment Agreement between the Company and its Vice President, Intellectual Property, Mary Ann Dillahunty, dated January 12, 2007
|
4.13****
|
Amendment No. 1, dated March 28, 2008, to the Executive Employment Agreement between the Company and its Chief Medical Officer, Dr. Karl Mettinger, dated May 29, 2007
|
4.14****
|
Amendment No. 2, dated March 31, 2008, to the Services Agreement between the Company and its Senior Vice President, Clinical and Regulatory Affairs, George Gill, dated October 16, 2001
|
4.15****
|
Executive Employment Agreement, dated January 26, 2009, between the Oncolytics Biotech (U.S.) Inc. and its Chief Medical Officer, Dr. Karl Mettinger
|
4.16****
|
Executive Employment Agreement, dated January 22, 2009 between the Company and its Vice President, Intellectual Property, Mary Ann Dillahunty.
|
4.17
|
Amendment No. 2, dated January 1, 2011, to the Executive Employment Agreement between the Company and its Chief Executive Officer, Bradley Thompson, dated June 6, 2007
|
Subsidiaries
|
|
8.0
|
List of subsidiaries
|
Certifications
|
|
12.1
|
Certificate of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
12.2
|
Certificate of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
13.1
|
Certificate of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
13.2
|
Certificate of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
Other Exhibits | |
15.1 | The Registrant's Management's Discussion and Analysis for the Year Ended December 31, 2010 |
15.2 | Consent of Ernst & Young LLP |
/s/ Brad Thompson | /s/ Doug Ball |
Brad Thompson, Ph.D | Doug Ball, CA |
Chief Executive Officer | Chief Financial Officer |
/s/ Brad Thompson | /s/ Doug Ball |
Brad Thompson, Ph.D | Doug Ball, CA |
Chief Executive Officer | Chief Financial Officer |
Calgary, Canada
March 16, 2011 |
Chartered Accountants |
Calgary, Canada
March 16, 2011 |
Chartered Accountants |
As at December 31,
|
Notes
|
$ | 2010 | $ | 2009 | |||||||
Assets
|
||||||||||||
Current assets
|
||||||||||||
Cash and cash equivalents
|
4 | 39,296,682 | 32,448,939 | |||||||||
Short-term investments
|
4 | 3,609,246 | 1,679,937 | |||||||||
Accounts receivable
|
22 | 284,988 | 64,787 | |||||||||
Prepaid expenses
|
278,934 | 507,408 | ||||||||||
Total current assets
|
43,469,850 | 34,701,071 | ||||||||||
Non-current assets
|
||||||||||||
Property and equipment
|
5 | 226,911 | 208,320 | |||||||||
Asset held for sale
|
6 | 735,681 | 684,000 | |||||||||
Total non-current assets
|
962,592 | 892,320 | ||||||||||
Total assets
|
44,432,442 | 35,593,391 | ||||||||||
Liabilities And Shareholders’ Equity
|
||||||||||||
Current Liabilities
|
||||||||||||
Accounts payable and accrued liabilities
|
2,500,682 | 4,226,933 | ||||||||||
Total current liabilities
|
2,500,682 | 4,226,933 | ||||||||||
Commitments and contingencies
|
12, 13, 18 and 19
|
|||||||||||
Shareholders’ equity
|
||||||||||||
Share capital
Authorized: unlimited
Issued 67,958,302 (2009 – 61,549,969)
|
7 | 155,227,915 | 131,908,274 | |||||||||
Warrants
|
7 | 6,066,128 | 4,511,441 | |||||||||
Contributed surplus
|
8, 11 | 19,399,489 | 13,734,743 | |||||||||
Deficit
|
10 | (138,761,772 | ) | (118,788,000 | ) | |||||||
Total shareholders’ equity
|
41,931,760 | 31,366,458 | ||||||||||
Total Liabilities And Equity
|
44,432,442 | 35,593,391 | ||||||||||
On behalf of the Board: | ||
/s/ Fred Stewart | /s/ Jim Dinning | |
Fred Stewart
Dector |
Jim Dinning
Dector |
For the periods ending December 31,
|
Notes
|
$ | 2010 | $ | 2009 | $ | 2008 |
Cumulative from inception on April 2, 1998 to December 31, 2010
$
|
||||||||||||
Revenue
|
||||||||||||||||||||
Rights revenue
|
— | — | — | 310,000 | ||||||||||||||||
Expenses
|
||||||||||||||||||||
Research and development
|
7, 13 | 12,191,809 | 11,606,514 | 13,351,875 | 98,330,100 | |||||||||||||||
Operating
|
4,190,403 | 3,782,507 | 4,311,575 | 32,809,935 | ||||||||||||||||
Stock based compensation
|
8 | 3,251,041 | 424,273 | 64,039 | 8,444,158 | |||||||||||||||
Foreign exchange loss (gain)
|
346,686 | 179,716 | (68,283 | ) | 1,115,829 | |||||||||||||||
Amortization - intellectual property
|
— | 180,750 | 361,500 | 3,615,000 | ||||||||||||||||
Amortization - property and equipment
|
63,156 | 64,930 | 48,754 | 625,237 | ||||||||||||||||
20,043,095 | 16,238,690 | 18,069,460 | 144,940,259 | |||||||||||||||||
Loss before the following
|
(20,043,095 | ) | (16,238,690 | ) | (18,069,460 | ) | (144,630,259 | ) | ||||||||||||
Interest
|
76,934 | 29,441 | 519,256 | 6,640,380 | ||||||||||||||||
Gain on sale of BCY LifeSciences Inc.
|
21 | — | — | — | 299,403 | |||||||||||||||
Loss on sale of Transition Therapeutics Inc.
|
— | — | — | (2,156,685 | ) | |||||||||||||||
Loss before income taxes
|
(19,966,161 | ) | (16,209,249 | ) | (17,550,204 | ) | (139,847,161 | ) | ||||||||||||
Income taxes (recovery)
|
14 | 7,611 | 22,000 | — | (1,085,389 | ) | ||||||||||||||
Net loss and comprehensive loss
|
(19,973,772 | ) | (16,231,249 | ) | (17,550,204 | ) | (138,761,772 | ) | ||||||||||||
Basic and diluted loss per common share
|
9 | (0.32 | ) | (0.33 | ) | (0.42 | ) | — |
For the periods ending December 31,
|
Notes
|
$ | 2010 | $ | 2009 | $ | 2008 |
Cumulative from inception on April 2, 1998 to December 31, 2010
$
|
||||||||||||
Cash Flows
|
||||||||||||||||||||
Operating Activities
|
||||||||||||||||||||
Net loss and comprehensive loss for the period
|
(19,973,772 | ) | (16,231,249 | ) | (17,550,204 | ) | (138,761,772 | ) | ||||||||||||
Amortization - intellectual property
|
— | 180,750 | 361,500 | 3,615,000 | ||||||||||||||||
Amortization - property and equipment
|
63,156 | 64,930 | 48,754 | 625,237 | ||||||||||||||||
Stock based compensation
|
8 | 3,251,041 | 424,273 | 64,039 | 8,444,158 | |||||||||||||||
Other non-cash items
|
17 | 343,821 | 110,800 | — | 1,838,158 | |||||||||||||||
Net change in non-cash working capital
|
17 | (1,717,978 | ) | (613,383 | ) | 1,787,279 | 1,936,760 | |||||||||||||
Cash used in operating activities
|
(18,033,732 | ) | (16,063,879 | ) | (15,288,632 | ) | (122,302,459 | ) | ||||||||||||
Investing Activities
|
||||||||||||||||||||
Acquisition of property and equipment
|
(81,846 | ) | (9,324 | ) | (111,577 | ) | (904,914 | ) | ||||||||||||
Purchase of intellectual property
|
6 | (51,681 | ) | — | — | (51,681 | ) | |||||||||||||
Purchase of short-term investments
|
(1,929,309 | ) | (1,679,937 | ) | (347,901 | ) | (53,026,110 | ) | ||||||||||||
Redemption of short-term investments
|
— | 5,846,634 | 13,000,000 | 48,998,380 | ||||||||||||||||
Investment in BCY
|
— | — | — | 464,602 | ||||||||||||||||
Investment in Transition Therapeutics Inc.
|
— | — | — | 2,532,343 | ||||||||||||||||
Cash provided by (used in) investing activities
|
(2,062,836 | ) | 4,157,373 | 12,540,522 | (1,987,380 | ) | ||||||||||||||
Financing Activities
|
||||||||||||||||||||
Proceeds from exercise of stock options and warrants
|
528,211 | 15,210,210 | 41,600 | 31,039,489 | ||||||||||||||||
Proceeds from private placements
|
— | — | — | 38,137,385 | ||||||||||||||||
Proceeds from acquisition of private company
|
— | 1,800,120 | — | 1,800,120 | ||||||||||||||||
Proceeds from public offering
|
26,759,921 | 20,042,570 | 3,421,309 | 93,080,698 | ||||||||||||||||
Cash provided by financing activities
|
27,288,132 | 37,052,900 | 3,462,909 | 164,057,692 | ||||||||||||||||
Increase in cash
|
7,191,564 | 25,146,394 | 714,799 | 39,767,853 | ||||||||||||||||
Cash and cash equivalents, beginning of period
|
32,448,939 | 7,429,895 | 6,715,096 | — | ||||||||||||||||
Impact of foreign exchange on cash and cash equivalents
|
(343,821 | ) | (127,350 | ) | — | (471,171 | ) | |||||||||||||
Cash and cash equivalents, end of period
|
39,296,682 | 32,448,939 | 7,429,895 | 39,296,682 |
Office equipment and furniture
|
20%
|
Medical equipment
|
20%
|
Computer equipment
|
30%
|
Leasehold improvements
|
Straight-line over the term of the lease
|
●
|
Scoping and diagnostic phase — This phase involved performing a high-level diagnostic assessment to identify key areas that were impacted by the transition to IFRS. This phase was finalized in 2008.
|
●
|
Impact analysis, evaluation and design phase —This phase involved specification of changes required to existing accounting policies, information systems and business processes, together with an analysis of policy alternatives allowed under IFRS. This phase was finalized in 2009.
|
●
|
Implementation and review phase — This phase included execution of changes to information systems and business processes, completing formal authorization processes to approve recommended accounting policy changes and training. At the end of the implementation and review phase we will be able to compile financial statements compliant with IFRS.
|
Face
Value
$
|
Original Cost
$
|
Accrued Interest
$
|
Carrying
Value
$
|
Fair
Value
$
|
Effective
Interest Rate
%
|
|
December 31, 2010
|
||||||
Short-term investments
|
3,609,246
|
3,609,246
|
Nil
|
3,609,246
|
3,609,246
|
0.30%
|
December 31, 2009
|
||||||
Short-term investments
|
1,679,937
|
1,679,937
|
Nil
|
1,679,937
|
1,679,937
|
0.17%
|
2010
|
||||||||||||
Cost
$
|
Accumulated
Amortization
$
|
Net Book
Value
$
|
||||||||||
Medical equipment
|
107,471 | 59,329 | 48,142 | |||||||||
Office equipment
|
37,236 | 28,813 | 8,423 | |||||||||
Office furniture
|
117,357 | 79,024 | 38,333 | |||||||||
Computer equipment
|
339,074 | 213,744 | 125,330 | |||||||||
Leasehold improvements
|
139,616 | 132,933 | 6,683 | |||||||||
740,754 | 513,843 | 226,911 |
2009
|
Cost
$
|
Accumulated Amortization
$
|
Net Book Value
$
|
||||||||||
Medical equipment
|
100,816 | 47,504 | 53,312 | |||||||||
Office equipment
|
36,385 | 27,006 | 9,379 | |||||||||
Office furniture
|
111,076 | 73,457 | 37,619 | |||||||||
Computer equipment
|
271,194 | 185,905 | 85,289 | |||||||||
Leasehold improvements
|
139,616 | 116,895 | 22,721 | |||||||||
659,087 | 450,767 | 208,320 |
Issued
:
|
Shares
|
Warrants
|
||||||||||||||
Number
|
Amount
$
|
Number
|
Amount
$
|
|||||||||||||
Balance, December 31, 1998
|
2,145,300 | 4 |
|
|
||||||||||||
Issued on exercise of stock options
|
76,922 | 77 |
|
|
||||||||||||
2,222,222 | 81 |
|
|
|||||||||||||
July 29, 1999 share split
(a)
|
6,750,000 | 81 |
|
|
||||||||||||
Issued for cash pursuant to July 30, 1999 private placement (net of share issue costs of $45,000)
(b)
|
1,500,000 | 855,000 |
|
|
||||||||||||
Issued for cash pursuant to August 24, 1999 private placement
|
1,399,997 | 1,049,998 |
|
|
||||||||||||
Issued on initial public offering (net of share issue costs of $317,897)
(c)
|
4,000,000 | 3,082,103 |
|
|
||||||||||||
Issued for cash pursuant to exercise of share purchase warrants
|
20,000 | 15,000 |
|
|
||||||||||||
Balance, December 31, 1999
|
13,669,997 | 5,002,182 |
|
|
||||||||||||
Issued on exercise of stock options and warrants
|
573,910 | 501,010 |
|
|
||||||||||||
Issued for cash pursuant to July 17, 2000 private placement
(d)
|
244,898 | 2,998,645 |
|
|
||||||||||||
Issued on public offering (net of share issue costs of $998,900)
(e)
|
3,000,000 | 13,101,100 |
|
|
||||||||||||
Balance, December 31, 2000
|
17,488,805 | 21,602,937 |
|
|
||||||||||||
Issued on exercise of stock options and warrants
|
1,702,590 | 2,210,016 |
|
|
||||||||||||
Balance, December 31, 2001
|
19,191,395 | 23,812,953 |
|
|
||||||||||||
Issued on exercise of stock options
|
40,000 | 34,000 |
|
|
||||||||||||
Issued on acquisition of the interest in Transition Therapeutics Inc.
|
1,913,889 | 4,689,028 |
|
|
||||||||||||
Issued for cash pursuant to December 11, 2002 private placement
(f)
|
1,000,000 | 1,896,714 | 550,000 | 114,286 | ||||||||||||
Share issue costs
|
|
(241,123 | ) |
|
|
|||||||||||
Balance, December 31, 2002
|
22,145,284 | 30,191,572 | 550,000 | 114,286 | ||||||||||||
Issued for cash pursuant to February 10, 2003 private placement
(g)
|
140,000 | 265,540 | 77,000 | 16,000 | ||||||||||||
Issued for cash pursuant to June 19, 2003 private placement
(h)
|
2,120,000 | 5,912,113 | 1,272,000 | 543,287 |
Issued
:
|
Shares
|
Warrants
|
||||||||||||||
Number
|
Amount
$
|
Number
|
Amount
$
|
Issued for cash pursuant to August 21, 2003 private placement
(i)
|
1,363,900 | 3,801,778 | 813,533 | 349,176 | ||||||||||||
Issued for cash pursuant to October 14, 2003 public offering
(j)
|
1,200,000 | 5,528,972 | 720,000 | 617,428 | ||||||||||||
Exercise of options
|
64,700 | 149,615 |
|
|
||||||||||||
Exercise of warrants
|
174,378 | 593,194 | (174,378 | ) | (41,927 | ) | ||||||||||
Share issue costs
|
|
(1,730,195 | ) |
|
|
|||||||||||
Balance, December 31, 2003
|
27,208,262 | 44,712,589 | 3,258,155 | 1,598,250 | ||||||||||||
Issued for cash pursuant to April 7, 2004 private placement
(k)
|
1,077,100 | 5,924,050 | 646,260 | 1,028,631 | ||||||||||||
Issued for cash pursuant to November 23, 2004 public offering
(l)
|
1,504,000 | 8,693,120 | 864,800 | 1,521,672 | ||||||||||||
Issued pursuant to cancellation of contingent
payment
[note 13]
|
21,459 | 150,000 |
|
|
||||||||||||
Exercise of warrants
|
1,907,175 | 8,178,546 | (1,907,175 | ) | (798,096 | ) | ||||||||||
Expired warrants
|
|
|
(6,700 | ) | (2,827 | ) | ||||||||||
Exercise of options
|
197,500 | 778,951 |
|
|
||||||||||||
Share issue costs
|
|
(1,796,758 | ) |
|
|
|||||||||||
Balance, December 31, 2004
|
31,915,496 | 66,640,498 | 2,855,340 | 3,347,630 | ||||||||||||
Issued for cash pursuant to December 29, 2005 private placement
(m)
|
3,200,000 | 14,176,000 | 1,920,000 | 2,908,800 | ||||||||||||
Exercise of warrants
|
771,252 | 3,417,271 | (771,252 | ) | (329,984 | ) | ||||||||||
Expired warrants
|
|
|
(1,219,288 | ) | (1,496,514 | ) | ||||||||||
Exercise of options
|
350,000 | 297,500 |
|
|
||||||||||||
Share issue costs
|
|
(1,689,398 | ) |
|
|
|||||||||||
Balance, December 31, 2005
|
36,236,748 | 82,841,871 | 2,784,800 | 4,429,932 | ||||||||||||
Exercise of options
|
284,000 | 241,400 |
|
|
||||||||||||
Expired warrants
|
|
|
(112,800 | ) | (213,192 | ) | ||||||||||
Balance, December 31, 2006
|
36,520,748 | 83,083,271 | 2,672,000 | 4,216,740 | ||||||||||||
Issued for cash pursuant to February 22, 2007 public offering
(n)
|
4,600,000 | 11,362,000 | 2,300,000 | 2,438,000 | ||||||||||||
Exercise of options
|
60,000 | 51,000 |
|
|
||||||||||||
Expired warrants
|
|
|
(752,000 | ) | (1,308,480 | ) |
Issued
:
|
Shares
|
Warrants
|
||||||||||||||
Number
|
Amount
$
|
Number
|
Amount
$
|
Share issue costs
|
|
(1,736,606 | ) |
|
|
|||||||||||
Balance, December 31, 2007
|
41,180,748 | 92,759,665 | 4,220,000 | 5,346,260 | ||||||||||||
Issued for cash pursuant to December 5, 2008 public offering
(o)
|
2,650,000 | 3,127,000 | 2,915,000 | 946,050 | ||||||||||||
Expired warrants
|
— | — | (1,920,000 | ) | (2,908,800 | ) | ||||||||||
Warrants
(p)
|
— | — | 320,000 | 41,600 | ||||||||||||
Share issue costs
|
— | (651,741 | ) | — | — | |||||||||||
Balance, December 31, 2008
|
43,830,748 | 95,234,924 | 5,535,000 | 3,425,110 | ||||||||||||
Issued on acquisition of private company
(q)
|
1,875,121 | 2,113,275 | — | — | ||||||||||||
Issued for cash pursuant to May 13, 2009 public offering
(r)
|
3,450,000 | 5,623,500 | 3,795,000 | 1,442,100 | ||||||||||||
Issued for cash pursuant to November 23, 2009 public offering
(s)
|
4,887,500 | 13,380,549 | 1,955,000 | 2,073,981 | ||||||||||||
Exercise of stock options
|
281,600 | 318,541 | — | — | ||||||||||||
Exercise of warrants
|
7,030,000 | 17,360,750 | (7,030,000 | ) | (2,429,750 | ) | ||||||||||
Issued for investment in BCBC
(t)
|
200,000 | 684,000 | — | — | ||||||||||||
Sale of intellectual property
(u)
|
(5,000 | ) | (16,550 | ) | — | — | ||||||||||
Share issue costs
|
|
(2,790,715 | ) |
|
|
|||||||||||
Balance, December 31, 2009
|
61,549,969 | 131,908,274 | 4,255,000 | 4,511,441 | ||||||||||||
Issued for cash pursuant to November 8, 2010 bought deal financing
(v)
|
6,256,000 | 25,336,800 | 3,503,360 | 4,120,201 | ||||||||||||
Exercise of warrants
|
119,900 | 575,813 | (119,900 | ) | (127,514 | ) | ||||||||||
Expired warrants
|
— | — | (2,300,000 | ) | (2,438,000 | ) | ||||||||||
Exercise of stock options
|
32,433 | 104,109 | — | — | ||||||||||||
Share issue costs
|
— | (2,697,081 | ) | — | — | |||||||||||
Balance, December 31, 2010
|
67,958,302 | 155,227,915 | 5,338,460 | 6,066,128 |
(a)
|
Pursuant to subsection 167(1)(f) of the Business Corporations Act (Alberta), the Articles of the Company were amended by subdividing the 2,222,222 issued and outstanding common shares of the Company into 6,750,000 common shares.
|
(b)
|
Pursuant to a private placement, 1,500,000 common share purchase warrants were issued entitling the holders thereof to acquire one additional share at $0.75 per share until November 8, 2001. At December 31, 2001, all of the warrants had been exercised.
|
(c)
|
Pursuant to the initial public offering, the agent was issued common share purchase warrants entitling it to acquire 400,000 common shares at $0.85 per share until May 8, 2001. At December 31, 2001, all of the warrants had been exercised.
|
(d)
|
Pursuant to a private placement, 244,898 common shares were issued at an issue price of $12.25 per share net of issue costs of $1,355.
|
(e)
|
Pursuant to a special warrant offering, we sold 3,000,000 special warrants for $4.70 per warrant for net proceeds of $13,101,100. Each warrant entitled the holder to one common share upon exercise. At December 31, 2001, all of the warrants had been exercised.
|
(f)
|
Pursuant to a private placement, 1,000,000 units were issued at an issue price of $2.00 per unit net of issue costs of $241,123. Each unit included one common share (ascribed value of $1.897) and one-half of one common share purchase warrant (ascribed value of $0.103) for a total of 500,000 warrants. Each whole common share purchase warrant entitled the holder to acquire one common share in the capital of the Company upon payment of $3.00 per share until June 11, 2004. In addition, we issued 50,000 common share purchase warrants on the same terms to the brokerage firm assisting with the transaction. The ascribed value of these broker warrants was $11,000 ($0.22 per broker warrant) and has been included in the issue costs. The ascribed values of the warrants were based on the Black Scholes Option Pricing Model (“Black Scholes”).
|
(g)
|
Pursuant to a private placement, 140,000 units were issued at an issue price of $2.00 per unit net of issue costs of $37,369. Each unit included one common share (ascribed value of $1.897) and one-half of one common share purchase warrant (ascribed value of $0.103) for a total of 70,000 warrants. Each whole common share purchase warrant entitled the holder to acquire one common share in the capital of the Company upon payment of $3.00 per share until August 10, 2004. In addition, we issued 7,000 common share purchase warrants on the same terms to the brokerage firm assisting with the transaction. The ascribed value of these broker warrants was $1,540 ($0.22 per broker warrant) and has been included in the issue costs. The ascribed values of the warrants were determined using Black Scholes.
|
(h)
|
Pursuant to a private placement, 2,120,000 units were issued at an issue price of $3.00 per unit net of issue costs of $637,986. Each unit included one common share (ascribed value of $2.789) and one-half of one common share purchase warrant (ascribed value of $0.211) for a total of 1,060,000 warrants. Each whole common share purchase warrant entitled the holder to acquire one common share in the capital of the Company upon payment of $4.00 per share until December 19, 2004. In addition, we issued 212,000 common share purchase warrants on the same terms to the brokerage firms assisting with the transaction. The ascribed value of these broker warrants was $95,400 ($0.45 per broker warrant) and has been included in the issue costs. The ascribed values of the warrants were determined using Black Scholes.
|
(i)
|
Pursuant to a private placement, 1,363,900 common shares and 681,943 common share purchase warrants were issued for gross proceeds of $4,091,738. Each common share and whole common share purchase warrant have ascribed values of $2.787 and $0.425, respectively. Each common share purchase warrant entitled the holder to acquire one common share in the capital of the Company upon payment of $4.00 per share until February 21, 2005. Share issue costs related to this private placement were $367,839. In addition, we issued 131,590 common share purchase warrants on the same terms to the advisors assisting with the transaction. The ascribed value of these additional warrants was $59,216 ($0.45 per additional warrant) and has been included in the issue costs. The ascribed values of the warrants were determined using Black Scholes.
|
(j)
|
Pursuant to a public offering, 1,200,000 units were issued at an issue price of $5.00 per unit net of issue costs of $687,001. Each unit included one common share (ascribed value of $4.607) and one-half of one common share purchase warrant (ascribed value of $0.393) for a total of 600,000 warrants. Each whole common share purchase warrant entitled the holder to acquire one common share in the capital of the Company upon payment of $6.25 per share until April 14, 2005. In addition, we issued 120,000 common share purchase warrants with an exercise price of $5.00 that expires on April 14, 2005 to the brokerage firms assisting with the transaction.
|
|
The ascribed value of these broker warrants was $146,400 ($1.19 per broker warrant) and has been included in the issue costs. The ascribed values of the warrants were determined using Black Scholes.
|
(k)
|
Pursuant to a private placement, the Company sold 1,077,100 units at an average price of $6.25 per unit for gross cash proceeds of $6,731,875. The units were comprised of 1,077,100 common shares and 538,550 common share purchase warrants and have ascribed values of $5.50 and $1.50, respectively. Each common share purchase warrant entitled the holder to acquire one common share in the capital of the Company upon payment of $7.75 per share until October 7, 2005. Share issue costs related to the private placement were $728,918. In addition, we issued 107,710 common share purchase warrants to our advisor entitling the holder to acquire one common share of the capital of the Company upon payment of $7.00 per share until October 7, 2005. The ascribed value of these additional warrants was $220,806 ($2.05 per additional warrant) and has been included in the share issue costs above. The ascribed values of the warrants were determined using Black Scholes.
|
(l)
|
Pursuant to a public offering, the Company sold 1,504,000 units at an issue price of $6.65 per unit for gross cash proceeds of $10,001,600. Each unit included one common share (ascribed value of $5.78) and one-half of one common share purchase warrant (ascribed value of $0.87) for a total of 752,000 warrants. Each whole common share purchase warrant entitled the holder to acquire one common share in the capital of the Company upon payment of $8.00 per share until November 23, 2007. Share issue costs related to this public offering were $1,063,890. In addition, we issued 112,800 common share purchase warrants with an exercise price of $7.06 that expires on May 23, 2006 to the brokerage firm assisting with the transaction. The ascribed value of these broker warrants was $213,192 ($1.89 per broker warrant) and has been included in the share issue costs above. The ascribed values of the warrants were determined using Black Scholes.
|
(m)
|
Pursuant to a private placement, 3,200,000 units were issued at an issue price of $5.15 per unit net of issue costs of $1,689,398. Each unit included one common share (ascribed value of $4.43) and one-half of one common share purchase warrant (ascribed value of $0.72) for a total of 1,600,000 warrants. Each whole common share purchase warrant entitled the holder to acquire one common share in the capital of the Company upon payment of $6.15 per share until December 29, 2008. In addition, we issued 320,000 common share purchase warrants with an exercise price of $5.65 expiring on December 29, 2008. The ascribed value of these broker warrants was $604,800 ($1.89 per broker warrant) and has been included in the issue costs. The ascribed values of the warrants were determined using Black Scholes.
|
(n)
|
Pursuant to a public offering, 4,600,000 units were issued at an issue price of $3.00 per unit for gross proceeds of $13,800,000. Each unit included one common share (ascribed value of $2.47) and one-half of one common share purchase warrant (ascribed value of $0.53) for a total of 2,300,000 warrants. The ascribed value was determined using the relative fair value method. Each whole common share purchase warrant entitles the holder to acquire one common share in the capital of the Company upon payment of $3.50 per share until February 22, 2010. Share issue costs for this offering were $1,736,606. The ascribed value of the warrants was determined using Black Scholes.
|
(o)
|
Pursuant to a public offering, 2,650,000 units were issued at an issue price of $1.50 per unit for gross proceeds of $3,975,000. Each unit included one common share (ascribed value of $1.18) and one- common share purchase warrant (ascribed value of $0.32). The ascribed value was determined using the relative fair value method. Each common share purchase warrant entitles the holder to acquire one common share in the capital of the Company upon payment of $1.80 per share until December 5, 2011 subject to acceleration of the expiry date under certain circumstances. Share issue costs for this offering were $651,741. In addition, we issued 265,000 broker common share purchase warrants with an exercise price of $1.80 expiring on December 5, 2011 subject to acceleration of the expiry date under certain circumstances. The ascribed value of these broker warrants was $98,050 ($0.37 per broker warrant) and has been included in the share issue costs. The ascribed values of the warrants were determined using Black Scholes.
|
|
Under the terms of the warrant indenture and the broker warrant certificates, if the 10-day volume-weighted average trading price of our common shares (the “Common Shares”) on the Toronto Stock Exchange exceeded $2.50 per Common Share, then, at any date subsequent to this date, at our sole discretion and upon sending the holder written notice of such accelerated exercise date and issuing a news release announcing such accelerated exercise date, the expiry date of the warrant shall be the day that is 30 days following the later of (i) the date on which such notice is sent to the holder; and (ii) the date on which such announcement is made by news release. As of the close of business on September 18, 2009, the 10-day volume-weighted average trading price of the Common Shares exceeded $2.50 and we elected to accelerate the exercise date to October 23, 2009, the date of our news release. All of these warrants were exercised.
|
(p)
|
On December 18, 2008, we amended the terms of 320,000 previously issued broker warrants for cash consideration of $41,600. The amendments included adjusting the exercise price from $5.65 to $1.80 and extending the expiry date from December 29, 2008 to December 29, 2009, subject to acceleration of the expiry date in certain circumstances. All of these warrants were exercised in 2009.
|
(q)
|
On April 9, 2009, we completed our acquisition of an inactive private company pursuant to a plan of arrangement under the Business Corporations Act (Alberta). We issued 1,875,121 common shares in exchange for all of the issued and outstanding securities of the private company. The exchange ratio was at an agreed premium to the private company’s net cash per security at closing and was calculated using an ascribed value per common share of $1.69 (being the 20 day volume weighted average trading price of our common shares on the Toronto Stock Exchange up to and including March 2, 2009). We have treated this acquisition as a financing transaction for accounting purposes and we have allocated the net cash from the private company to the value of the common shares we issued net of related transaction costs. The private company had no other assets or liabilities.
|
(r)
|
Pursuant to a public offering, 3,450,000 units were issued at an issue price of $2.00 per unit for gross proceeds of $6,900,000. Each unit included one common share (ascribed value of $1.63) and one common share purchase warrant (ascribed value of $0.37). The ascribed value was determined using the relative fair value method. Each common share purchase warrant entitles the holder to acquire one common share in the capital of the Company upon payment of $2.40 per share until May 13, 2012 subject to acceleration of the expiry date under certain circumstances. Share issue costs for this offering were $952,854. In addition, we issued 345,000 broker common share purchase warrants with an exercise price of $2.40 expiring on May 13, 2012 subject to acceleration of the expiry date under certain circumstances. The ascribed value of these broker warrants was $165,600 ($0.48 per broker warrant) and has been included in the share issue costs. The ascribed values of the warrants were determined using Black Scholes. On October 2, 2009, the acceleration provisions under the warrant indenture were met allowing us to accelerate the expiry date of these warrants to November 2, 2009.
|
|
Under the terms of the warrant indenture and the broker warrant certificates, if the 10-day volume-weighted average trading price of our Common Shares on the Toronto Stock Exchange exceeded $3.35 per Common Share, then, at any date subsequent to this date, at our sole discretion and upon sending the holder written notice of such accelerated exercise date and issuing a news release announcing such accelerated exercise date, the expiry date of the warrant shall be the day that is 30 days following the later of (i) the date on which such notice is sent to the holder; and (ii) the date on which such announcement is made by news release. As of the close of business on October 2, 2009, the 10-day volume-weighted average trading price exceeded $3.35 and we elected to accelerate the exercise date to November 2, 2009. All of these warrants were exercised.
|
(s)
|
Pursuant to a public offering, 4,887,500 units were issued at an issue price of US$3.00 per unit for gross proceeds of US$14,662,500. Each unit included one common share (ascribed value of US$2.60) and 0.40 of one common share purchase warrant (ascribed value of US$0.40). The ascribed value was determined using the relative fair value method. Each common share purchase warrant entitles the holder to acquire one common share in the capital of the Company upon payment of US$3.50 per share until November 23, 2014 subject to
acceleration of the expiry date under certain circumstances. Share issue costs for this offering were $1,524,706. The ascribed value of the warrant was determined using Black Scholes.
|
(t)
|
On October 20, 2009 we made an investment in British Canadian Biosciences Corp. (“BCBC”), a privately held biotechnology company specializing in the development of peptides for the treatment of a variety of conditions, including cancer. We purchased all of the convertible preferred shares of BCBC in exchange for 200,000 common shares of Oncolytics.
|
(u)
|
On October 26, 2009, we received and cancelled 5,000 of our common shares in consideration for clinical trial data that we had obtained as part of our acquisition of Private Company in April 2009.
|
(v)
|
Pursuant to a bought deal financing, 6,256,000 units were issued at an issue price of $4.60 per unit for gross proceeds of $28,777,600. Each unit included one common share (ascribed value of $4.05) and 0.40 of one common share purchase warrant (ascribed value of $0.55). The ascribed value was determined using the relative fair value method. Each common share purchase warrant entitles the holder to acquire one common share in the capital of the Company upon payment of $6.15 per share until November 8, 2012. Share issue costs for this offering were $2,697,081 . In addition, we issued 375,360 common share purchase warrants with an exercise price of $4.60 that expires on November 8, 2012 to the brokerage firm assisting with the transaction. The ascribed value of these broker warrants was $679,402 ($1.81 per broker warrant) and has been included in the share issue costs above. The ascribed values of the warrants were determined using Black Scholes.
|
Exercise
Price |
Outstanding, Beginning
of the Year |
Granted During
the Year |
Exercised During
the Year |
Expired During
the Year |
Outstanding,
End of Year |
Weighted Average
Remaining Contractual Life (years) |
||||||||||||||||||||
US3.50 | 1,955,000 | — | (109,400 | ) | — | 1,845,600 | 0.08 | |||||||||||||||||||
3.50 | 2,300,000 | — | — | (2,300,000 | ) | — | — | |||||||||||||||||||
4.60 | — | 375,360 | — | — | 375,360 | 1.83 | ||||||||||||||||||||
6.15 | — | 3,128,000 | (10,500 | ) | — | 3,117,500 | 1.83 | |||||||||||||||||||
4,255,000 | 3,503,360 | (119,900 | ) | (2,300,000 | ) | 5,338,460 | 1.22 |
2010
|
2009
|
|||||||||||||||
Stock Options
|
Weighted Average Share Price
$
|
Stock Options
|
Weighted Average Share Price
$
|
|||||||||||||
Outstanding, beginning of the year
|
3,936,543 | 4.72 | 3,885,993 | 4.59 | ||||||||||||
Granted during the year
|
1,183,000 | 5.73 | 332,500 | 3.06 | ||||||||||||
Cancelled during the year
|
(383,350 | ) | 10.42 | (350 | ) | 2.35 | ||||||||||
Exercised during the year
|
(32,433 | ) | 2.46 | (281,600 | ) | 0.99 | ||||||||||
Outstanding, end of the year
|
4,703,760 | 4.53 | 3,936,543 | 4.72 | ||||||||||||
Options exercisable, end of the year
|
4,654,926 | 4.54 | 3,875,026 | 4.75 |
Range of Exercise Prices
|
Number
Outstanding |
Weighted Average
Remaining Contractual Life (years) |
Weighted Average
Exercise Price
$
|
Number Exercisable
|
Weighted Average
Exercise Price
$
|
|||||||||||||||||
$ | 1.45 - $2.37 | 788,760 | 5.2 | 2.09 | 767,426 | 2.09 | ||||||||||||||||
$ | 2.70 - $3.60 | 1,407,750 | 6.2 | 3.13 | 1,392,750 | 3.14 | ||||||||||||||||
$ | 4.00 - $5.00 | 1,224,750 | 3.9 | 4.86 | 1,212,250 | 4.86 | ||||||||||||||||
$ | 6.72 - $9.76 | 1,279,500 | 7.3 | 7.22 | 1,279,500 | 7.22 | ||||||||||||||||
$ | 12.15 - $13.50 | 3,000 | 0.2 | 12.49 | 3,000 | 12.49 | ||||||||||||||||
4,703,760 | 5.7 | 4.53 | 4,654,926 | 4.54 |
2010
|
2009
|
2008
|
|
Risk-free interest rate
|
1.85%
|
1.21%
|
1.85%
|
Expected hold period to exercise
|
3.0 years
|
3.0 years
|
4.0 years
|
Volatility in the price of the Company’s shares
|
71%
|
57%
|
56%
|
Dividend yield
|
Zero
|
Zero
|
Zero
|
Weighted average fair value of options
|
$2.76
|
$1.19
|
$0.60
|
Amount
$
|
|
Balance, December 31, 2008
|
102,556,751
|
Net loss and comprehensive loss for the year
|
16,231,249
|
Balance, December 31, 2009
|
118,788,000
|
Net loss and comprehensive loss for the year
|
19,973,772
|
Balance, December 31, 2010
|
138,761,772
|
$ | 2010 | $ | 2009 | |||||
Balance, beginning of the year
|
13,734,743 | 13,349,801 | ||||||
Stock based compensation
|
3,251,041 | 424,273 | ||||||
Expired warrants
|
2,438,000 | — | ||||||
Exercise of stock options
|
(24,295 | ) | (39,331 | ) | ||||
Balance, end of the year
|
19,399,489 | 13,734,743 |
Amount
$
|
|
2011
|
65,674
|
2012
|
88,792
|
2013
|
91,332
|
2014
|
94,888
|
2015
|
97,428
|
2016
|
40,595
|
478,709
|
$ | 2010 | $ | 2009 | $ | 2008 | |||||||
Loss before income taxes
|
(19,966,161 | ) | (16,209,249 | ) | (17,550,204 | ) | ||||||
Statutory Canadian corporate tax rate
|
28.00 | % | 29.00 | % | 29.50 | % | ||||||
Anticipated tax recovery
|
(5,590,525 | ) | (4,700,682 | ) | (5,177,310 | ) | ||||||
Foreign jurisdiction tax rate difference
|
3,431,667 | 3,360,634 | 373,868 | |||||||||
Employee stock based compensation
|
910,291 | 123,039 | 18,892 | |||||||||
Change in tax rate
|
124,696 | 151,038 | — | |||||||||
Tax return adjustment
|
(242,261 | ) | 1,725,970 | (290,082 | ) | |||||||
Other permanent differences
|
(112,318 | ) | 42,929 | 11,456 | ||||||||
Change in valuation allowance
|
1,486,061 | (680,928 | ) | 5,063,176 | ||||||||
Future income tax recovery
|
— | — | — | |||||||||
Current income taxes
|
7,611 | 22,000 | — |
2010
$ |
2009
$ |
|||||||
Net operating losses carried forward
|
8,251,442 | 6,871,568 | ||||||
Scientific research and experimental development
|
4,408,673 | 4,220,931 | ||||||
Investment tax credits
|
3,078,664 | 2,797,690 | ||||||
Undepreciated capital costs in excess of book value
of property and equipment and intellectual property
|
307,970 | 290,724 | ||||||
Share issue costs
|
939,502 | 814,857 | ||||||
Valuation allowance
|
(16,986,251 | ) | (14,995,770 | ) | ||||
Future income tax asset
|
— | — |
2010
$
|
2009
$
|
|
Cash and cash equivalents
|
39,296,682
|
32,448,939
|
Short-term investments
|
3,609,246
|
1,679,937
|
Shareholders’ equity
|
41,931,760
|
31,366,458
|
U.S. dollars
$
|
British pounds
£
|
|||||||
Cash and cash equivalents
|
3,933,733 | 54,748 | ||||||
Accounts payable
|
(561,907 | ) | (64,441 | ) | ||||
3,371,827 | (9,693 | ) |
$ | 2010 | $ | 2009 | $ | 2008 |
Cumulative from
inception on April 2, 1998 to December 31, 2010
$
|
||||||||||
Change in:
|
||||||||||||||||
Accounts receivable
|
(220,201 | ) | 21,535 | (6,237 | ) | (284,988 | ) | |||||||||
Prepaid expenses
|
228,474 | (327,740 | ) | 80,632 | (278,934 | ) | ||||||||||
Accounts payable and accrued liabilities
|
(1,726,251 | ) | (307,178 | ) | 1,712,884 | 2,500,682 | ||||||||||
Change in non-cash working capital
|
(1,717,978 | ) | (613,383 | ) | 1,787,279 | 1,936,760 | ||||||||||
Net change associated with investing activities
|
— | — | — | — | ||||||||||||
Net change associated with operating activities
|
(1,717,978 | ) | (613,383 | ) | 1,787,279 | 1,936,760 |
|
$ | 2010 | $ | 2009 | $ | 2008 |
Cumulative from
inception on April 2, 19 98 to December 31, 2010
$
|
|||||||||
Gain on disposal of clinical data
|
— | (16,550 | ) | — | (16,550 | ) | ||||||||||
Unrealized foreign exchange loss
|
343,821 | 127,350 | — | 896,357 | ||||||||||||
Donation of medical equipment
|
— | — | — | 66,069 | ||||||||||||
Loss on sale of Transition Therapeutics Inc.
|
— | — | — | 2,156,685 | ||||||||||||
Gain on sale of BCY LifeSciences Inc.
|
— | — | — | (299,403 | ) | |||||||||||
Cancellation of contingent payment obligation settled in common shares
[note 7]
|
— | — | — | 150,000 | ||||||||||||
Future income tax recovery
|
— | — | — | (1,115,000 | ) | |||||||||||
343,821 | 110,800 | — | 1,838,158 |
2010
$
|
2009
$
|
|
Government grant receivable
|
244,000
|
—
|
Other
|
40,988
|
64,787
|
284,988
|
64,787
|
Years Ended December 31
|
Cumulative from
inception on April 2, 1998 to |
|||||||||||||||||||
Notes
|
2010
$ |
2009
$ |
2008
$ |
December 31, 2010
$
|
||||||||||||||||
Net loss and comprehensive loss - Canadian GAAP
|
(2) | 19,973,772 | 16,231,249 | 17,550,204 | 138,761,772 | |||||||||||||||
Change in fair value of warrant liability
|
(3) | 4,841,949 | (1,050,930 | ) | — | 3,791,019 | ||||||||||||||
Amortization of intellectual property
|
(1) | — | (180,750 | ) | (361,500 | ) | (3,615,000 | ) | ||||||||||||
Future income tax recovery
|
(1) | — | — | — | 1,115,000 | |||||||||||||||
Net loss and comprehensive loss – U.S. GAAP
|
24,815,721 | 14,999,569 | 17,188,704 | 140,052,791 | ||||||||||||||||
Basic and diluted loss per common share – U.S. GAAP
|
(0.40 | ) | (0.30 | ) | (0.42 | ) | — |
December 31, 2010
|
December 31, 2009
|
||||
Notes
|
Canadian
GAAP |
U.S.
GAAP
|
Canadian
GAAP |
U.S.
GAAP
|
|
Warrant liability
|
(3)
|
—
|
5,652,764
|
—
|
1,023,051
|
Future income taxes
|
(1)
|
—
|
—
|
—
|
—
|
Share capital
|
(3)
|
155,227,915
|
155,440,151
|
131,908,274
|
131,908,274
|
Warrants
|
(3)
|
6,066,128
|
3,992,147
|
4,511,441
|
2,437,460
|
Contributed surplus
|
(1)
|
19,399,489
|
16,899,489
|
13,734,743
|
11,234,743
|
Deficit
|
(1), (3)
|
138,761,772
|
140,052,791
|
118,788,000
|
115,237,070
|
1.
|
“Push-Down” Accounting and In Process Research and Development
|
2.
|
Presentation of Stock Based Compensation Expense
|
3.
|
Treatment of Warrants with a Foreign Currency Exercise Price
|
2010
|
2009
|
|||||||||||||||
Stock Options
|
Weighted Average Grant Date Fair Value
$
|
Stock Options
|
Weighted Average Grant Date Fair Value
$
|
|||||||||||||
Non-vested options, beginning of the year
|
61,167 | 0.92 | 138,700 | 1.14 | ||||||||||||
Granted during the year
|
15,000 | 1.33 | — | — | ||||||||||||
Vested during the year
|
(26,508 | ) | 2.55 | (77,183 | ) | 1.32 | ||||||||||
Forfeited during the year
|
(825 | ) | 0.36 | (350 | ) | 0.92 | ||||||||||
Non-vested options, end of the year
|
48,834 | 0.96 | 61,167 | 0.92 |
Name
|
Jurisdiction
|
Oncolytics Biotech (Barbados) Inc.
|
Barbados
|
Oncolytics Biotech (US) Inc.
|
Delaware
|
Valens Pharma Ltd.
|
Alberta
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
Date: March 24 , 2011
|
/s/ Brad Thompson
|
|
Brad Thompson, PhD
Chief Executive Officer
Principal Executive Officer
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
Date: March 24, 2011
|
/s/ Doug Ball
|
|
Doug Ball, CA
Chief Financial Officer
Principal Accounting and Financial Officer
|
Title
|
Senior Author
|
Publication
|
Description/Conclusion
|
"Antiangiogenic cancer therapy combined with oncolytic virotherapy leads to regression of established tumors in mice"
|
Dr. Richard Vile
Dr. Kevin Harrington
|
April 1, 2010 Journal of Clinical Investigation on
|
The research demonstrated that combining VEGF165 inhibitors such as Avastin or Sunitinib with systemic delivery of REOLYSIN leads to substantial regression and cure of established tumors in immunocompetent mice. This approach led to direct tumor cell lysis (break down) and triggered innate immune–mediated attack on the tumor vasculature. It also resulted in long-term antitumor effects, even against tumors in which viral replication was poorly supported. The authors concluded that because this combinatorial approach targets the tumor endothelium, these data have direct, wide-ranging, and immediate clinical applicability across a broad range of tumor types using reagents that are already approved for use in patients.
|
1.
|
The technical feasibility of completing the intangible asset so that it will be available for use or sale.
|
2.
|
Our intention to complete the intangible asset and use or sell it.
|
3.
|
Our ability to use or sell the intangible asset.
|
4.
|
How the intangible asset will generate probable future economic benefits. Among other things, we are able to demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset.
|
5.
|
The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset.
|
6.
|
Our ability to measure reliably the expenditure attributable to the intangible asset during its development.
|
•
|
Scoping and diagnostic phase — This phase involved performing a high-level diagnostic assessment to identify key areas that were impacted by the transition to IFRS. This phase was finalized in 2008.
|
•
|
Impact analysis, evaluation and design phase —This phase involved specification of changes required to existing accounting policies, information systems and business processes, together with an analysis of policy alternatives allowed under IFRS. This phase was finalized in 2009.
|
•
|
Implementation and review phase — This phase included execution of changes to information systems and business processes, completing formal authorization processes to approve recommended accounting policy changes and training. At the end of the implementation and review phase we will be able to compile financial statements compliant with IFRS.
|
2010
|
|
Risk-free interest rate
|
1.85%
|
Expected hold period to exercise
|
3 years
|
Volatility in the price of the our shares
|
71%
|
Dividend yield
|
Zero
|
$ | 2010 | $ | 2009 | $ | 2008 | |||||||
Revenue
|
— | — | — | |||||||||
Net loss
(2)
|
19,973,772 | 16,231,249 | 17,550,204 | |||||||||
Basic and diluted loss per share
(2), (3)
|
0.32 | 0.33 | 0.42 | |||||||||
Total assets
(1), (3)
|
44,432,442 | 35,593,391 | 13,987,195 | |||||||||
Cash dividends declared per share
(4)
|
Nil
|
Nil
|
Nil
|
(1)
|
Subsequent to the acquisition of Oncolytics Biotech Inc. by SYNSORB in April 1999, we applied push down accounting.
|
(2)
|
Included in net loss and loss per common share for 2010, 2009 and 2008 are stock based compensation expenses of $3,251,041, $424,273 and $64,039, respectively.
|
(3)
|
We issued 6,408,333 commons shares for net cash proceeds of $27,288,132 in 2010 (2009 – 17,524,211 common shares for net cash proceeds of $37,052,900; 2008 – 2,650,000 common shares for net cash proceeds of $3,421,309)
|
(4)
|
We have not declared or paid any dividends since incorporation.
|
$ | 2010 | $ | 2009 | $ | 2008 | |||||||
Clinical trial expenses
|
4,159,064 | 3,766,234 | 5,797,085 | |||||||||
Manufacturing and related process development expenses
|
4,528,115 | 3,720,251 | 3,062,951 | |||||||||
Intellectual property expenses
|
1,020,897 | 968,849 | 1,244,388 | |||||||||
Research collaboration expenses
|
303,929 | 509,600 | 687,679 | |||||||||
Scientific Research and Development Refund
|
(531,506 | ) | — | (75,833 | ) | |||||||
Other R&D expenses
|
2,711,310 | 2,641,580 | 2,635,605 | |||||||||
Research and development expenses
|
12,191,809 | 11,606,514 | 13,351,875 |
$ | 2010 | $ | 2009 | $ | 2008 | |||||||
Direct clinical trial expenses
|
2,630,202 | 3,691,553 | 5,797,085 | |||||||||
Phase III start up expenses
|
1,528,862 | 74,681 | — | |||||||||
Clinical trial expenses
|
4,159,064 | 3,766,234 | 5,797,085 |
$ | 2010 | $ | 2009 | $ | 2008 | |||||||
Product manufacturing expenses
|
3,694,324 | 3,367,631 | 2,774,747 | |||||||||
Process development expenses
|
833,791 | 352,620 | 288,204 | |||||||||
Manufacturing and related process development expenses
|
4,528,115 | 3,720,251 | 3,062,951 |
$ | 2010 | $ | 2009 | $ | 2008 | |||||||
Intellectual property expenses
|
1,020,897 | 968,849 | 1,244,388 |
$ | 2010 | $ | 2009 | $ | 2008 | |||||||
Research collaboration expenses
|
303,929 | 509,600 | 687,679 |
$ | 2010 | $ | 2009 | $ | 2008 | |||||||
Scientific research and development refund
|
(531,506 | ) | — | (75,833 | ) |
$ | 2010 | $ | 2009 | $ | 2008 | |||||||
R&D consulting fees
|
63,071 | 279,321 | 197,773 | |||||||||
R&D salaries and benefits
|
2,394,869 | 2,097,501 | 1,926,148 | |||||||||
Other R&D expenses
|
253,370 | 264,758 | 511,684 | |||||||||
Other research and development expenses
|
2,711,310 | 2,641,580 | 2,635,605 |
$ | 2010 | $ | 2009 | $ | 2008 | |||||||
Public company related expenses
|
2,806,048 | 2,326,431 | 3,099,583 | |||||||||
Office expenses
|
1,384,355 | 1,456,076 | 1,211,992 | |||||||||
Operating expenses
|
4,190,403 | 3,782,507 | 4,311,575 |
$ | 2010 | $ | 2009 | $ | 2008 | |||||||
Stock based compensation
|
3,251,041 | 424,273 | 64,039 |
2010
|
2009
|
|||||||||||||||||||||||||||||||
(unaudited)
|
Dec.
|
Sept.
|
June
|
March
|
Dec.
|
Sept.
|
June
|
March
|
||||||||||||||||||||||||
Revenue
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Net loss
(3)
|
7,472 | 4,009 | 4,352 | 4,141 | 5,245 | 2,694 | 4,335 | 3,958 | ||||||||||||||||||||||||
Basic and diluted loss per common share
(3)
|
$ | 0.11 | $ | 0.07 | $ | 0.07 | $ | 0.07 | $ | 0.09 | $ | 0.05 | $ | 0.09 | $ | 0.09 | ||||||||||||||||
Total assets
(1), (4)
|
44,432 | 21,137 | 26,569 | 30,159 | 35,593 | 10,240 | 12,755 | 9,802 | ||||||||||||||||||||||||
Total cash
(2), (4)
|
42,906 | 19,708 | 24,885 | 28,823 | 34,129 | 9,655 | 11,983 | 9,292 | ||||||||||||||||||||||||
Total long-term debt
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Cash dividends declared
(5)
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
(1)
|
Subsequent to the acquisition of Oncolytics Biotech Inc. by SYNSORB in April 1999, we applied push down accounting.
|
(2)
|
Included in total cash are cash and cash equivalents plus short-term investments.
|
(3)
|
Included in net loss and loss per common share between December 2010 and January 2009 are quarterly stock based compensation expenses of $2,850,938, $397,675, $1,399, $1,029, $396,110, $7,982, $8,544, and $11,637, respectively.
|
(4)
|
We issued 6,408,333 commons shares for net cash proceeds of $27,288,132 in 2010 (2009 – 17,524,211 common shares for net cash proceeds of $37,052,900).
|
(5)
|
We have not declared or paid any dividends since incorporation.
|
2010
$
(unaudited)
|
2009
$
(unaudited)
|
|||||||
Expenses
|
||||||||
Research and development expenses
|
3,290,721 | 3,600,282 | ||||||
Operating expenses
|
1,215,728 | 1,078,998 | ||||||
Stock based compensation
|
2,850,938 | 396,110 | ||||||
Foreign exchange (gain) loss
|
132,677 | 137,371 | ||||||
Amortization – property and equipment
|
17,669 | 15,318 | ||||||
7,507,733 | 5,228,079 | |||||||
Interest income
|
(40,052 | ) | (5,225 | ) | ||||
Income taxes
|
3,884 | 22,000 | ||||||
Net loss
|
7,471,565 | 5,244,854 |
2010
$
(unaudited)
|
2009
$
(unaudited)
|
|||||||
Clinical trial expenses
|
1,164,960 | 805,188 | ||||||
Manufacturing and related process development expenses (“M&P”)
|
902,425 | 1,599,609 | ||||||
Intellectual property expenses
|
343,764 | 201,854 | ||||||
Research collaboration expenses
|
146,315 | 185,906 | ||||||
Scientific Research and Development Refund
|
(244,000 | ) | ||||||
Other R&D expenses
|
977,257 | 807,725 | ||||||
Research and development expenses
|
3,290,721 | 3,600,282 |
2010
$
(unaudited)
|
2009
$
(unaudited)
|
|||||||
Direct clinical trial expenses
|
788,679 | 730,507 | ||||||
Phase III start up expenses
|
376,281 | 74,681 | ||||||
Clinical trial expenses
|
1,164,960 | 805,188 |
2010
$
(unaudited)
|
2009
$
(unaudited)
|
|||||||
Product manufacturing expenses
|
681,012 | 1,553,558 | ||||||
Process development expenses
|
221,413 | 46,051 | ||||||
Manufacturing and related process development expenses
|
902,425 | 1,599,609 |
2010
$
(unaudited)
|
2009
$
(unaudited)
|
|||||||
Intellectual property expenses
|
343,764 | 201,854 |
2010
$
(unaudited)
|
2009
$
(unaudited)
|
|||||||
Research collaboration expenses
|
146,315 | 185,906 |
$ | 2010 | $ | 2009 | |||||
Scientific research and development refund
|
244,000 | — |
2010
$
(unaudited)
|
2009
$
(unaudited)
|
|||||||
R&D consulting fees
|
3,250 | 18,437 | ||||||
R&D salaries and benefits
|
913,375 | 711,774 | ||||||
Other R&D expenses
|
60,632 | 77,514 | ||||||
Other research and development expenses
|
977,257 | 807,725 |
2010
$
(unaudited)
|
2009
$
(unaudited)
|
|||||||
Public company related expenses
|
778,500 | 668,046 | ||||||
Office expenses
|
437,228 | 410,952 | ||||||
Operating expenses
|
1,215,728 | 1,078,998 |
2010
$
(unaudited)
|
2009
$
(unaudited)
|
|||||||
Stock based compensation
|
2,850,938 | 396,110 |
$ | 2010 | $ | 2009 | |||||
Cash and cash equivalents
|
39,296,682 | 32,448,939 | ||||||
Short-term investments
|
3,609,246 | 1,679,937 | ||||||
Working capital position
|
40,969,168 | 30,474,138 |
Contractual Obligations
|
Payments Due by Period
|
|||||||||||||||||||
Total
$
|
Less than 1 year
$
|
2 -3 years
$
|
4 – 5 years
$
|
After 5 years
$
|
||||||||||||||||
Alberta Heritage Foundation
(1)
|
150,000 | — | — | — | 150,000 | |||||||||||||||
Capital lease obligations
|
Nil
|
— | — | — | — | |||||||||||||||
Operating lease
(2)
|
478,709 | 65,674 | 275,012 | 138,023 | — | |||||||||||||||
Purchase obligations
|
1,140,000 | 1,140,000 | — | — | — | |||||||||||||||
Other long term obligations
|
Nil
|
— | — | — | — | |||||||||||||||
Total contractual obligations
|
1,768,709 | 1,205,674 | 275,012 | 138,023 | 150,000 |
(1)
|
Our Alberta Heritage Foundation obligation requires repayments upon the realization of sales (see notes of our audited 2010 consolidated financial statements).
|
(2)
|
Our operating lease is comprised of our office lease and exclude our portion of operating costs.
|
U.S. dollars
$
|
British pounds
£
|
|||||||
Cash and cash equivalents
|
3,933,733 | 54,748 | ||||||
Accounts payable
|
(561,907 | ) | (64,441 | ) | ||||
3,371,827 | (9,693 | ) |
·
|
the discovery of unexpected toxicities or lack of sufficient efficacy of products which make them unattractive or unsuitable for human use;
|
·
|
preliminary results as seen in animal and/or limited human testing may not be substantiated in larger controlled clinical trials;
|
·
|
manufacturing costs or other factors may make manufacturing of products impractical and non-competitive;
|
·
|
proprietary rights of third parties or competing products or technologies may preclude commercialization;
|
·
|
requisite regulatory approvals for the commercial distribution of products may not be obtained; and
|
·
|
other factors may become apparent during the course of research, up-scaling or manufacturing which may result in the discontinuation of research and other critical projects.
|
Calgary, Alberta
|
signed “Ernst & Young LLP”
|
|
March 24, 2011
|
Chartered Accountants
|