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, 2012
|
||
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 Financial Reporting Standards as issued by the International Accounting Standards Board
|
Other
|
o
|
x
|
o
|
•
|
risks related to 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 some of our clinical trials being conducted in, and subject to the laws of foreign countries;
|
•
|
risks related to our pharmaceutical products being subject to intense regulatory approval processes in the United States and other foreign jurisdictions;
|
•
|
risks related to being subject to government manufacturing and testing regulations;
|
•
|
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 other third-party arrangements;
|
•
|
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 compliance with the Sarbanes-Oxley Act of 2002, as amended;
|
•
|
risks related to our status as a foreign private issuer;
|
•
|
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 One U.S. Dollar
|
||||
|
2012
|
2011
|
2010
|
2009
|
2008
|
Average for the period
|
0.9996
|
0.9893
|
1.0299
|
1.1420
|
1.0660
|
A.
|
Selected Financial Data
|
|
2012
|
2011
|
2010
|
|||
|
$
|
$
|
$
|
|||
Revenues
|
—
|
|
—
|
|
—
|
|
Net loss
(1), (3), (4)
|
(36,373,521
|
)
|
(29,044,701
|
)
|
(24,659,061
|
)
|
Net comprehensive loss
|
(36,313,135
|
)
|
(29,005,542
|
)
|
(24,815,721
|
)
|
Basic and diluted loss per share
(2)
|
(0.48
|
)
|
(0.41
|
)
|
(0.39
|
)
|
Total assets
(2)
|
22,078,090
|
|
36,024,617
|
|
44,432,442
|
|
Shareholders’ equity
(2)
|
14,786,780
|
|
29,520,379
|
|
36,394,960
|
|
Cash dividends declared per share
(5)
|
Nil
|
|
Nil
|
|
Nil
|
|
Weighted average number of common shares outstanding
|
76,102,062
|
|
70,911,526
|
|
62,475,403
|
|
1)
|
Included in net loss and net loss per share for the year ended December 31,
2012
is stock based compensation expense of
$730,751
(
2011
-
$1,805,503
; 2010 - $3,251,041).
|
2)
|
We issued
5,458,950
common shares for net cash proceeds of
$20,848,785
in
2012
(
2011
-
3,293,033
common shares for net cash proceeds of
$14,824,658
; 2010 - 6,408,333 common shares for net cash proceeds of $27,288,132).
|
3)
|
Included in the net loss and net loss per share for the year ended December 31,
2012
is change in fair value of warrant liability of $
nil
(
2011
change in fair value of warrant liability gain of
$36,000
; 2010 - change in fair value of warrant liability loss of
$4,841,949
).
|
4)
|
Included in net loss and net loss per share for the year ended December 31,
2012
is a write down of asset available for sale of
nil
(
2011
-
$735,681
; 2010 - $nil).
|
5)
|
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
|
Trial number
|
Delivery Method
|
Trial Program and Cancer Indication
|
Location
|
Status
|
IND 213 (NCIC CTG Trial)
|
Intravenous Administration of REOLYSIN® in combination with Paclitaxel
|
Phase II Metastatic Breast Cancer
|
Canada
|
Ongoing
|
IND 211 (NCIC CTG Trial)
|
Intravenous Administration of REOLYSIN® in combination with Docetaxel or Pemetrexed
|
Phase II Metastatic Non-Small Cell Lung Cancer
|
Canada
|
Ongoing
|
INC 210 (NCIC CTG Trial)
|
Intravenous Administration of REOLYSIN® in combination with FOLFOX-6 Plus Bevacizumab (Avastin®) versus FOLFOX-6 Plus Bevacizumab alone
|
Phase II Metastatic Colorectal Cancer
|
Canada
|
Ongoing
|
IND 209 (NCIC CTG Trial)
|
Intravenous Administration of REOLYSIN® in combination with Docetaxel or Pemetrexed
|
Phase II Recurrent or Metastatic Castration Resistant Prostate Cancer
|
Canada
|
Ongoing
|
OSU-11148 (NCI Trial)
|
Intravenous Administration of REOLYSIN
|
Phase I Relapsed Multiple Myeloma
|
United States
|
Ongoing
|
OSU-10045 (NCI Trial)
|
REOLYSIN® in Combination with Paclitaxel and Carboplatin
|
Phase II Metastatic Pancreatic Cancer
|
United States
|
Ongoing
|
COG-ADVL1014 (NCI / COG Trial)
|
Intravenous Administration of REOLYSIN® in Combination with Cyclophosphamide
|
Phase I Pediatric Patients with Relapsed or Refractory Solid Tumors
|
United States
|
Ongoing
|
GOG-0186H (NCI / GOG Trial)
|
Intravenous Administration of REOLYSIN in Combination with Paclitaxel for Patients with Persistent or Recurrent Ovarian Cancer
|
Phase II ovarian cancer
|
United States
|
Ongoing
|
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
|
International
|
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
|
REO 015
|
Intravenous administration in combination with paclitaxel and carboplatin
|
Phase II head and neck
|
United States
|
Complete
|
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
|
Complete
|
NCI Trial
|
Intravenous administration monotherapy (NCI)
|
Phase II melanoma
|
United States
|
Complete
|
Trial number
|
Delivery Method
|
Trial Program and Cancer Indication
|
Location
|
Status
|
NCI Trial
|
Intravenous and intraperitoneal administration monotherapy (NCI)
|
Phase I/II ovarian
|
United States
|
Complete
|
REO 012
|
Intravenous administration in combination with cyclophosphamide
|
Phase I/II pancreatic, lung, ovarian
|
United Kingdom
|
Complete
|
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
|
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
|
A.
|
Operating Results
|
B.
|
Liquidity and Capital Resources
|
C.
|
Research and Development, Patents, and Licenses, etc.
|
D.
|
Trend Information
|
E.
|
Off-Balance Sheet Arrangements
|
F.
|
Tabular Disclosure of Contractual Obligations
|
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)
|
324,243
|
|
91,332
|
|
192,316
|
|
40,595
|
|
—
|
|
Purchase obligations
|
8,552,656
|
|
8,552,656
|
|
—
|
|
—
|
|
—
|
|
Other long term obligations
|
Nil
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Total contractual obligations
|
9,026,899
|
|
8,643,988
|
|
192,316
|
|
40,595
|
|
150,000
|
|
(1)
|
Our Alberta Heritage Foundation obligation requires repayments equal to the lesser of 5% of gross sales generated by the Company or $15,000 per annum (see notes to our
2012
audited consolidated financial statements).
|
(2)
|
Our operating lease is comprised of our office lease and exclude our portion of operating costs.
|
G.
|
Safe Harbor
|
A.
|
Directors and Senior Management
|
Name and Municipality of Residence
|
Position with the Company
|
Principal Occupation
|
Director of the Company Since
|
Bradley G. Thompson Ph.D
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
|
Name and Municipality of Residence
|
Position with the Company
|
Principal Occupation
|
Director of the Company Since
|
Kirk J. Look C.A.
Calgary, Alberta
|
Chief Financial Officer
|
Chief Financial Officer of the Company since November 2012. From 2003 to November 2012, Mr. Look held the position of Controller with the Company.
|
N/A
|
William A. Cochrane, OC, M.D.
(5)
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 and Director
|
Chief Operating Officer of the Corporation since December 2008. Since April 1999 to December 2008, Dr. Coffey held other senior management positions with the Company and is a co-founder of Oncolytics.
|
May 11, 2011
|
George M. Gill, M.D.
Cambridge, MD |
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
|
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
|
Name and Municipality of Residence
|
Position with the Company
|
Principal Occupation
|
Director of the Company Since
|
Fred A. Stewart, Q.C.
(1)
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.P.A, F.C.A.
(1), (3)
Stouffville, 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 Rx&D, BIOTECanada, the Ontario Institute for Cancer Research and York University, and is a past Chair of BIOTECanada and the Ontario Genomics Institute.
|
April 5, 2004
|
Jim Dinning
(2)
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)
Netherlands
|
Director
|
President and Chief Executive Officer of Novartis Canada, a pharmaceutical company, until his retirement in 2001.
|
June 15, 2006
|
Ed Levy, Ph.D,
(2), (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
Venice, FL |
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
|
Name and Municipality of Residence
|
Position with the Company
|
Principal Occupation
|
Director of the Company Since
|
Alan J Tuchman, MD, MBA (FAAN),
New York, NY
|
Senior Vice President, Medical and Clinical Affairs & Chief Medical Officer
|
Dr. Tuchman is Clinical Professor of Neurology at New York Medical College and the author of over thirty scientific papers and book chapters. He is currently in the private practice of Neurology in Manhattan and consults to a number of biotechnology and investment firms. He has served as a partner of Xmark Opportunity Partners and as Executive Chairman of Neurophysics, Inc. He was previously the President of the Epilepsy Society of Southern New York as well as Vice Dean for Clinical Affairs at New York Medical College. Dr. Tuchman received his MD degree from the University of Cincinnati, College of Medicine, and completed his Neurology Residency at the Mt Sinai School of Medicine. Dr. Tuchman received his MBA from Columbia University.
|
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. Dinning 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.
|
5)
|
On December 31, 2012, Dr. Cochrane retired from the Company's Board of Directors.
|
B.
|
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
(2)
|
42,500
|
N/A
|
25,200
|
None
|
N/A
|
None
|
67,700
|
Mr. J. Dinning
|
46,750
|
N/A
|
29,400
|
None
|
N/A
|
None
|
76,150
|
Dr. E. Levy
|
46,000
|
N/A
|
25,200
|
None
|
N/A
|
None
|
71,200
|
Mr. M. Lievonen
|
57,250
|
N/A
|
29,400
|
None
|
N/A
|
None
|
86,650
|
Mr. R. Schultz
|
69,750
|
N/A
|
50,400
|
None
|
N/A
|
None
|
120,150
|
Mr. F. Stewart
|
58,000
|
N/A
|
37,800
|
None
|
N/A
|
None
|
95,800
|
Mr. G. van Amersfoort
|
42,500
|
N/A
|
25,200
|
None
|
N/A
|
None
|
67,700
|
(1)
|
Option based awards include grants from December 2012. The options granted on December 17, 2012 have an estimated grant date fair value of $0.84 per option using the following respective grant date assumptions: expected life of option, 2 years; volatility 57.94%; risk free interest rate 1.16%; dividend yield 0%.
|
(2)
|
Effective December 31, 2012, Dr. Cochrane retired from the Company's Board of Directors.
|
Name and principal position
|
Year
|
Salary
$ |
Share-
based awards $ |
Option-
based awards (3)
$
|
Bonus
|
Non-equity incentive
plan compensation $ |
Pension value
$ |
All other compensation
($) (1) |
Total
compensation ($) |
||
|
|
|
|
|
|
|
|
|
|
||
Dr. Bradley G.
|
2012
|
506,143
|
N/A
|
201,528
|
—
|
N/A
|
N/A
|
65,453
|
773,124
|
||
Thompson
|
2011
|
489,500
|
N/A
|
403,080
|
200,000
|
N/A
|
N/A
|
62,834
|
1,155,414
|
||
Chief Executive Officer
|
2010
|
444,996
|
N/A
|
709,500
|
150,163
|
N/A
|
N/A
|
50,712
|
1,355,371
|
||
|
|
|
|
|
|
|
|
|
|
||
Kirk J. Look
|
2012
|
38,654
|
N/A
|
175,248
|
—
|
N/A
|
N/A
|
5,893
|
219,795
|
||
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
Dr. Matt C.
|
2012
|
341,363
|
N/A
|
104,963
|
—
|
N/A
|
N/A
|
51,882
|
498,208
|
||
Coffey
|
2011
|
330,139
|
N/A
|
225,980
|
100,000
|
N/A
|
N/A
|
49,686
|
705,805
|
||
Chief Operating Officer
|
2010
|
326,224
|
N/A
|
379,500
|
88,080
|
N/A
|
N/A
|
42,913
|
836,717
|
||
|
|
|
|
|
|
|
|
|
|
||
Mary Ann
|
2012
|
181,879
|
N/A
|
25,191
|
—
|
N/A
|
N/A
|
19,920
|
226,990
|
||
Dillahunty
(2)
|
2011
|
159,012
|
N/A
|
69,300
|
40,680
|
N/A
|
N/A
|
19,496
|
288,488
|
||
VP Intellectual Property
|
2010
|
153,665
|
N/A
|
82,500
|
19,467
|
N/A
|
N/A
|
19,066
|
274,698
|
||
|
|
|
|
|
|
|
|
|
|
||
Dr. George Gill
(2)
|
2012
|
310,200
|
N/A
|
33,588
|
—
|
N/A
|
N/A
|
26,211
|
369,999
|
||
Senior Vice President,
|
2011
|
305,100
|
N/A
|
53,900
|
30,510
|
N/A
|
N/A
|
25,171
|
414,681
|
||
Clinical and Regulatory Affairs
|
2010
|
100,349
|
N/A
|
82,500
|
32,378
|
N/A
|
N/A
|
—
|
215,227
|
||
|
|
|
|
|
|
|
|
|
|
||
Alan Tuchman
(2), (5)
|
2012
|
35,538
|
N/A
|
46,341
|
—
|
N/A
|
N/A
|
2,932
|
84,811
|
||
Chief Medical Officer, Senior VP Clinical & Medical Development
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
Douglas A. Ball
(6)
|
2012
|
264,669
|
N/A
|
—
|
|
—
|
—
|
—
|
149,426
|
414,095
|
|
Chief Financial
|
2011
|
283,800
|
N/A
|
219,620
|
|
57,500
|
N/A
|
N/A
|
45,864
|
606,784
|
|
|
2010
|
257,567
|
N/A
|
643,500
|
|
46,362
|
N/A
|
N/A
|
36,649
|
984,078
|
|
|
|
|
|
|
|
|
|
|
|
||
Dr. Gerard T.
|
2012
|
271,176
|
N/A
|
—
|
|
—
|
N/A
|
N/A
|
220,717
|
491,893
|
|
Kennealey
(2), (7)
|
2011
|
52,111
|
N/A
|
431,000
|
|
—
|
N/A
|
N/A
|
4,299
|
487,410
|
|
Senior Vice President, Clinical Development & Chief Medical Officer
|
2010
|
—
|
N/A
|
—
|
|
—
|
N/A
|
N/A
|
—
|
—
|
|
(1)
|
The dollar amounts set forth under this column are related to contributions to the officer's respective retirement savings plan and amounts provided for health care benefits by the Company.
|
(2)
|
U.S. Employees are paid salaries, bonuses and other compensation in U.S. Dollars. These amounts are presented in U.S. dollars.
|
(3)
|
The value of option based awards are based on the grant date assumptions as disclosed in note 8 "
Share Based Payments"
in our
2012
audited consolidated financial statements.
|
(4)
|
Mr. Look was appointed Chief Financial Officer on November 12, 2012.
|
(5)
|
Dr. Tuchman was appointed Chief Medical Officer, Senior VP Clinical & Medical Development on September 27, 2012.
|
(6)
|
On November 9, 2012, the Company terminated the employment agreement with Mr. Ball. Under the terms of Mr. Ball's employment contract a severance payment was required totaling $342,229. In 2012, a partial payment of $104,621 is included in "All Other Compensation" with the remainder paid in 2013.
|
(7)
|
On September 27 2012, the Company terminated the employment agreement with Dr. Kennealey. Included in "All Other Compensation" is a severance payment of $197,931.
|
|
|
|
|
Name and principal position
|
Year
|
Salary
|
|
|
|
|
|
Dr. Bradley G. Thompson
|
2013
|
530,000
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
Kirk J. Look
|
2013
|
280,000
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
Dr. Matt C. Coffey
|
2013
|
365,000
|
|
Chief Operating Officer
|
|
|
|
|
|
|
|
Mary Ann Dillahunty
(1)
|
2013
|
162,640
|
|
VP Intellectual Property
|
|
|
|
|
|
|
|
Dr. George Gill, MD
(1)
|
2013
|
312,061
|
|
Senior Vice President, Clinical and
|
|
|
|
Regulatory Affairs
|
|
|
|
|
|
|
|
Alan J Tuchman, MD, MBA (FAAN)
(1)
|
2013
|
140,840
|
|
Senior Vice President, Medical and Clinical Affairs & Chief Medical Officer
|
|
|
|
Termination without Cause
(1)
|
Change of Control
(2)
|
||
Name
|
Severance ($)
|
Severance ($)
|
||
|
|
|
||
Dr. Bradley G. Thompson
Chief Executive Officer
|
1,195,090
|
|
1,792,635
|
|
|
|
|
||
Kirk J. Look, C.A.
Chief Financial Officer
|
326,920
|
|
653,840
|
|
|
|
|
||
Dr. Matt C. Coffey
Chief Operating Officer
|
418,932.5
|
|
837,866
|
|
|
|
|
||
Mary Ann Dillahunty,
(3)
J.D. M.B.A., VP Intellectual Property
|
181,925
|
|
363,850
|
|
|
|
|
||
Dr. George Gill, MD
(3)
|
312,061
|
|
624,122
|
|
Senior Vice President, Clinical and
|
|
|
||
Regulatory Affairs
|
|
|
||
|
|
|
||
Alan J Tuchman, MD, MBA (FAAN)
(3)
|
35,210
|
|
—
|
|
Senior Vice President, Medical and Clinical Affairs & Chief Medical Officer
|
|
|
(1)
|
As at December 31,
2012
, all options granted to Officers had fully vested except for 150,000 options granted to Mr. Look. These options vest annually over three years. As a result, all Officers shall be entitled to exercise all or any part of their vested Options, within the period ending on the earlier of the date of expiration of the Option and the ninetieth (90th) day after the date such Officer is terminated unless otherwise approved by the Board of Directors.
|
(2)
|
On a change of control of the Company, 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.
|
(3)
|
U.S. Employees are paid in U.S. Dollars and are presented in U.S. dollars.
|
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 2013 Annual General Meeting of the Shareholders
|
Matthew C. Coffey Ph.D.
Calgary, Alberta
|
Chief Operating Officer
|
May 11, 2011
|
Date of 2013 Annual General Meeting of the Shareholders
|
William A. Cochrane, OC, M.D.
(5)
Calgary, Alberta
|
Director
|
October 31, 2002
|
December 31, 2012
|
Robert B. Schultz, F.C.A.
(1), (4)
Toronto, Ontario
|
Lead Director
|
June 30, 2000
|
Date of 2013 Annual General Meeting of the Shareholders
|
Fred A. Stewart, Q.C.
(1)
Calgary, Alberta
|
Director
|
August 27, 1999
|
Date of 2013 Annual General Meeting of the Shareholders
|
J. Mark Lievonen, F.C.A.
(1),(3)
Markham, Ontario
|
Director
|
April 5, 2004
|
Date of 2013 Annual General Meeting of the Shareholders
|
Jim Dinning
(2)
Calgary, Alberta
|
Director
|
March 24, 2004
|
Date of 2013 Annual General Meeting of the Shareholders
|
Ger van Amersfoort,
(2)
Netherlands
|
Director
|
June 15, 2006
|
Date of 2013 Annual General Meeting of the Shareholders
|
Ed Levy, Ph.D,
(2), (3)
Lund, BC
|
Director
|
May 17, 2006
|
Date of 2013 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. Dinning 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.
|
5)
|
Effective December 31, 2012, Dr. Cochrane retired from the Company's Board of Directors.
|
1.
|
Policy Statement
|
2.
|
Composition of Committee
|
(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 5605 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)
|
Each member shall be appointed by the Board annually at the next scheduled meeting of the Board following the AGM.
|
(e)
|
The Lead Director shall be an ex officio member of the committee.
|
3.
|
Meetings of the Committee
|
(a)
|
The Committee shall convene a minimum of once per year at such time and place 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:
|
(i)
|
be in writing, including by electronic communication facilities;
|
(ii)
|
state the nature of the business to be transacted at the meeting in reasonable detail;
|
(iii)
|
to the extent practicable, be accompanied by copies of documentation to be considered at the meeting; and
|
(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.
|
(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.
|
4.
|
Duties and Responsibilities of the Committee
|
(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:
|
(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);
|
(ii)
|
compensation policies and guidelines;
|
(iii)
|
management incentive and perquisite plans and any non-standard remuneration plans;
|
(iv)
|
senior management, executive and officer appointments and their compensation;
|
(v)
|
management succession plans, management training and development plans, termination policies and termination arrangements; and
|
(vi)
|
Board compensation matters.
|
(c)
|
In carrying out its duties and responsibilities, the Committee shall:
|
(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");
|
(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;
|
(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;
|
(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;
|
(v)
|
periodically, review the compensation philosophy statement of the Corporation and make recommendations for change to the Board as considered necessary;
|
(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;
|
(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;
|
(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;
|
(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;
|
(x)
|
as required, fulfill the obligations assigned to the Committee pursuant to any other employee benefit plans approved by the Board;
|
(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;
|
(xii)
|
periodically, but at least every third year, review and make a recommendation to the Board regarding the compensation of the Board of Directors;
|
(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;
|
(xiv)
|
review and consider the implications of the risks associated with the company's compensation policies and practices, specifically, situations that could potentially encourage an insider to expose the company to inappropriate or excessive risks; and
|
(xv)
|
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.
|
5.
|
Date of Mandate
|
1.
|
Policy Statement
|
2.
|
Composition of the Committee
|
(a)
|
The Audit Committee shall consist of a minimum of three (3) directors, at least half of whom shall be resident Canadians. The Board shall appoint the members of the Audit 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 Audit Committee to be the Chair of the Audit Committee, or delegate such authority to appoint the Chair of the Audit Committee to the Audit Committee.
|
(b)
|
The Chair of the Committee shall be responsible for leadership of the Committee, including preparing or approving the agenda, presiding over the meetings, and making committee assignments.
|
(c)
|
Each director appointed to the Audit Committee by the Board shall be an outside director who is unrelated and independent. An outside, unrelated and independent director is a director who meets the requirements of NASDAQ Rule 5605(a)(2) and National Instrument 52-110. A director appointed to the audit committee shall also meet the requirements of NASDAQ Rule 5605(c)(2) and Rule 10A-3(b)(1) of the United States Securities Exchange Act of 1934, as amended. Such director shall be independent of management and 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 abovementioned rules and any applicable revisions thereto, and any additional relevant and then current legislation, rules, policies and instruments of applicable regulatory authorities.
|
(d)
|
Each member of the Audit Committee shall be financially literate. In order to be financially literate, a director must be, at a minimum, able to read and understand financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Corporation's financial statements. At least one member shall have accounting or related financial management expertise, meaning the ability to analyze and interpret a full set of financial statements, including the notes attached thereto, in accordance with generally accepted accounting principles and shall be a “financial expert” as defined in Item 407 of Regulation S-K promulgated by the U.S. Securities and Exchange Commission and “financially sophisticated” as defined in NASDAQ Rule 5605(c)(2).
|
(e)
|
. In determining whether a member of the Audit Committee is financially literate or has accounting or related financial expertise, reference shall be made to the then current legislation, rules, policies and instruments of applicable regulatory authorities, which for further clarification, shall include but not be limited to the definition of A director appointed by the Board to the Audit Committee shall be a member of the Audit Committee until replaced by the Board or until his or her resignation.
|
3.
|
Meetings of the Committee
|
(a)
|
The Audit Committee shall convene a minimum of four times each year at such times and places as may be designated by the Chair of the Audit Committee and whenever a meeting is requested by the Board, a member of the Audit Committee, the auditors, or senior management of the Corporation. Scheduled meetings of the Audit Committee shall correspond with the review of the year-end and quarterly financial statements and management discussion and analysis.
|
(b)
|
Notice of each meeting of the Audit Committee shall be given to each member of the Audit Committee and to the auditors, who shall be entitled to attend each meeting of the Audit Committee and shall attend whenever requested to do so by a member of the Audit Committee.
|
(c)
|
Notice of a meeting of the Audit Committee shall:
|
(i)
|
be in writing, including by electronic communication facilities;
|
(ii)
|
state the nature of the business to be transacted at the meeting in reasonable detail;
|
(iii)
|
to the extent practicable, be accompanied by copies of documentation to be considered at the meeting; and
|
(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 Audit Committee may permit.
|
(d)
|
A quorum for the transaction of business at a meeting of the Audit Committee shall consist of a majority of the members of the Audit Committee. However, it shall be the practice of the Audit Committee to require review, and, if necessary, approval of certain important matters by all members of the Audit Committee.
|
(e)
|
A member or members of the Audit Committee may participate in a meeting of the Audit 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 Audit Committee, the members of the Audit Committee shall choose one of the members present to be Chair of the meeting. In addition, the members of the Audit Committee shall choose one of the persons present to be the Secretary of the meeting.
|
(g)
|
A member of the Board, senior management of the Corporation and other parties may attend meetings of the Audit Committee; however the Audit Committee (i) shall, at each meeting, meet with the external auditors independent of other individuals other than the Audit Committee and (ii) may meet separately with management.
|
(h)
|
Minutes shall be kept of all meetings of the Audit Committee and shall be signed by the Chair and the Secretary of the meeting.
|
4.
|
Duties and Responsibilities of the Committee
|
(a)
|
The Audit Committee's primary duties and responsibilities are to:
|
(i)
|
identify and monitor the management of the principal risks that could impact the financial reporting of the Corporation;
|
(ii)
|
monitor the integrity of the Corporation's financial reporting process and system of internal controls regarding financial reporting and accounting compliance;
|
(iii)
|
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 and actively engage in a dialogue with the auditors with respect to any disclosed relationships or services that may impact objectivity and independence of the auditors and take, or recommend that the full board take, appropriate action to oversee the independence of the external auditors;
|
(iv)
|
deal directly with the external auditors to pre-approve external audit plans, other services (if any) and fees;
|
(v)
|
directly oversee the external audit process and results (in addition to items described in Section 4(d) below);
|
(vi)
|
provide an avenue of communication among the external auditors, management and the Board;
|
(vii)
|
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;
|
(viii)
|
pre-approve any related party transactions to be entered into by the Company, and ensure appropriate disclosure thereof;
|
(ix)
|
ensure financial disclosure incorporates inclusion of any material correcting adjustments required by the external auditors; and
|
(x)
|
require and ensure that the external auditors are directly responsible to the Audit Committee, to whom they report.
|
(b)
|
The Audit Committee shall have the authority to:
|
(i)
|
inspect any and all of the books and records of the Corporation and its affiliates;
|
(ii)
|
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;
|
(iii)
|
engage independent counsel and other advisors as it determines necessary to carry out its duties;
|
(iv)
|
communicate directly with the external auditors; and
|
(v)
|
to set and pay the compensation for (i) any external auditor engaged for the purpose of preparing or issuing an audit report or performing other audit, review, or attest services for the Corporation, (ii) any advisors employed by the Audit Committee, and (iii) ordinary administrative expenses of the Audit Committee.
|
(c)
|
The Audit 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.
|
(d)
|
The Audit Committee shall:
|
(i)
|
review the audit plan with the Corporation's external auditors and with management;
|
(ii)
|
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;
|
(iii)
|
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;
|
(iv)
|
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;
|
(v)
|
review with senior management the process of identifying, monitoring and reporting the principal risks affecting financial reporting;
|
(vi)
|
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.
|
(vii)
|
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;
|
(viii)
|
review with financial management and the external auditors the quarterly unaudited financial statements, management discussion and analysis, letter to shareholders and press release (all to be
|
(ix)
|
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, financial statements, including the notes thereto, annual reports, annual information forms, management discussion and analysis and press releases; and
|
(x)
|
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.
|
(e)
|
The Audit Committee shall:
|
(i)
|
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.;
|
(ii)
|
consider the recommendations of management in respect of the appointment of the external auditors;
|
(iii)
|
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;
|
(iv)
|
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;
|
(v)
|
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
|
(vi)
|
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.
|
(f)
|
The Audit Committee shall enquire into and determine the appropriate resolution of any conflict of interest in respect of audit or financial matters, which are directed to the Audit Committee by any member of the Board, a shareholder of the Corporation, the external auditors, or senior management.
|
(g)
|
The Audit Committee shall periodically review with management the need for an internal audit function.
|
(h)
|
The Audit Committee shall review the Corporation's accounting and reporting of costs, liabilities and contingencies.
|
(i)
|
The Audit Committee shall establish and maintain procedures for:
|
(i)
|
the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal controls, or auditing matters; and
|
(ii)
|
the confidential, anonymous submission by employees of the Corporation or concerns regarding questionable accounting or auditing matters.
|
(j)
|
The Audit Committee shall review and approve the Corporation's hiring policies regarding partners and employees and former partners and employees of the present and former external auditors.
|
(k)
|
The Audit Committee shall review with the Corporation's legal counsel, on no less than an annual basis, any legal matter that could have a material impact on the Corporation's financial statements, and any enquiries received from regulators, or government agencies.
|
(l)
|
The Audit Committee shall review with management and the Corporation's external auditors, on no less than an annual basis, any taxation matters that could have a material impact on the Corporation's financial statements.
|
(m)
|
The Audit Committee shall assess, on an annual basis, the adequacy of this Mandate and the performance of the Audit Committee.
|
5.
|
Date of Mandate
|
D.
|
Employees
|
Activity
|
2012
|
2011
|
2010
|
Research and development
|
14
|
17
|
13
|
Operating
|
9
|
8
|
4
|
Total
|
23
|
25
|
17
|
Geographic location
|
2012
|
2011
|
2010
|
Canada
|
16
|
18
|
15
|
United States of America
|
4
|
5
|
2
|
Other
|
3
|
2
|
—
|
Total
|
23
|
25
|
17
|
E.
|
Share Ownership
|
|
||||||||||
|
Common Shares
|
Percentage of
Ownership (1) |
Options (2) |
Exercise
Price |
Expiry Date
|
Percentage
of Outstanding (3) |
||||
Officers
|
|
|
|
|
|
|
||||
Bradley Thompson
|
662,900
|
|
**
|
59,000
|
|
3.33
|
|
August 5, 2013
|
|
|
|
|
|
80,000
|
|
4.50
|
|
December 11, 2013
|
|
||
|
|
|
30,000
|
|
8.10
|
|
May 28, 2014
|
|
||
|
|
|
350,000
|
|
5.00
|
|
December 9, 2014
|
|
||
|
|
|
149,160
|
|
2.22
|
|
December 12, 2017
|
|
||
|
|
|
50,000
|
|
3.06
|
|
December 8, 2019
|
|
||
|
|
|
215,000
|
|
6.72
|
|
December 14, 2020
|
|
||
|
|
|
18,000
|
|
4.31
|
|
July 27, 2021
|
|
||
|
|
|
240,000
|
|
3.89
|
|
December 14, 2021
|
|
||
|
|
|
240,000
|
|
4.21
|
|
December 17, 2022
|
|
||
|
|
|
1,431,160
|
|
|
|
2.30
|
%
|
||
Matthew Coffey
|
288,550
|
|
**
|
10,000
|
|
2.00
|
|
December 13, 2012
(4)
|
|
|
|
|
|
53,500
|
|
3.33
|
|
August 5, 2013
|
|
||
|
|
|
40,000
|
|
4.50
|
|
December 11, 2013
|
|
||
|
|
|
20,000
|
|
8.10
|
|
May 28, 2014
|
|
||
|
|
|
180,000
|
|
5.00
|
|
December 9, 2014
|
|
||
|
|
|
33,333
|
|
2.22
|
|
December 12, 2017
|
|
||
|
|
|
30,000
|
|
3.06
|
|
December 8, 2019
|
|
||
|
|
|
115,000
|
|
6.72
|
|
December 14, 2020
|
|
||
|
|
|
18,000
|
|
4.31
|
|
July 27, 2021
|
|
||
|
|
|
125,000
|
|
3.89
|
|
December 14, 2021
|
|
||
|
|
|
125,000
|
|
4.21
|
|
December 17, 2022
|
|
|
||||||||||
|
|
|
749,833
|
|
|
|
1.14
|
%
|
||
Kirk Look
|
26,400
|
|
**
|
45,000
|
|
1.65
|
|
April 4, 2013
|
|
|
|
|
|
15,000
|
|
8.10
|
|
May 28, 2014
|
|
||
|
|
|
15,000
|
|
5.00
|
|
December 9, 2014
|
|
||
|
|
|
4,700
|
|
2.25
|
|
December 15, 2016
|
|
||
|
|
|
9,000
|
|
2.22
|
|
December 12, 2017
|
|
||
|
|
|
10,000
|
|
3.06
|
|
December 8, 2019
|
|
||
|
|
|
25,000
|
|
6.72
|
|
December 14, 2020
|
|
||
|
|
|
35,000
|
|
3.89
|
|
December 14, 2021
|
|
||
|
|
|
200,000
|
|
2.00
|
|
November 13, 2022
|
|
||
|
|
|
40,000
|
|
4.21
|
|
December 17, 2022
|
|
||
|
|
|
398,700
|
|
|
|
**
|
|||
Mary Ann Dillahunty
|
2,201
|
|
**
|
100,000
|
|
3.28
|
|
February 1, 2017
|
|
|
|
|
|
16,667
|
|
2.22
|
|
December 12, 2017
|
|
||
|
|
|
15,000
|
|
3.06
|
|
December 8, 2019
|
|
||
|
|
|
25,000
|
|
6.72
|
|
December 14, 2020
|
|
||
|
|
|
45,000
|
|
3.89
|
|
December 14, 2021
|
|
||
|
|
|
30,000
|
|
4.21
|
|
December 17, 2022
|
|
||
|
|
|
231,667
|
|
|
|
**
|
|||
George Gill
|
32,000
|
|
**
|
17,000
|
|
3.33
|
|
August 5, 2013
|
|
|
|
|
|
40,000
|
|
4.50
|
|
December 11, 2013
|
|
||
|
|
|
7,500
|
|
8.10
|
|
May 28, 2014
|
|
||
|
|
|
12,500
|
|
5.00
|
|
December 9, 2014
|
|
||
|
|
|
16,667
|
|
2.22
|
|
December 12, 2017
|
|
||
|
|
|
15,000
|
|
3.06
|
|
December 8, 2019
|
|
||
|
|
|
25,000
|
|
6.72
|
|
December 14, 2020
|
|
||
|
|
|
35,000
|
|
3.89
|
|
December 14, 2021
|
|
||
|
|
|
40,000
|
|
4.21
|
|
December 17, 2022
|
|
||
|
|
|
208,667
|
|
|
|
**
|
|||
Alan Tuchman
|
100
|
|
**
|
7,500
|
|
3.33
|
|
August 5, 2013
|
|
|
|
|
|
2,500
|
|
4.50
|
|
December 11, 2013
|
|
||
|
|
|
5,000
|
|
5.00
|
|
December 9, 2014
|
|
||
|
|
|
10,000
|
|
2.85
|
|
May 11, 2020
|
|
||
|
|
|
50,000
|
|
2.32
|
|
October 1, 2022
|
|
||
|
|
|
15,000
|
|
4.21
|
|
December 17, 2022
|
|
||
|
|
|
90,000
|
|
|
|
**
|
|||
Directors
|
|
|
|
|
|
|
||||
Robert Schultz
|
20,000
|
|
**
|
34,000
|
|
3.33
|
|
August 5, 2013
|
|
|
|
|
|
|
10,000
|
|
4.50
|
|
December 11, 2013
|
|
|
|
|
|
5,000
|
|
8.10
|
|
May 28, 2014
|
|
||
|
|
|
22,500
|
|
5.00
|
|
December 9, 2014
|
|
||
|
|
|
10,000
|
|
2.25
|
|
December 15, 2016
|
|
||
|
|
|
17,500
|
|
2.22
|
|
December 12, 2017
|
|
||
|
|
|
17,500
|
|
3.06
|
|
December 8, 2019
|
|
||
|
|
|
50,000
|
|
3.13
|
|
July 28, 2020
|
|
|
||||||||||
|
|
|
60,000
|
|
6.72
|
|
December 14, 2020
|
|
||
|
|
|
9,000
|
|
4.31
|
|
July 27, 2021
|
|
||
|
|
|
70,000
|
|
3.89
|
|
December 31, 2021
|
|
||
|
|
|
60,000
|
|
4.21
|
|
December 17, 2022
|
|
||
|
|
|
365,500
|
|
|
|
**
|
|||
|
|
|
|
|
|
|
|
|
||
Fred Stewart
|
59,000
|
|
**
|
21,000
|
|
3.33
|
|
August 5, 2013
|
|
|
|
|
|
10,000
|
|
4.50
|
|
December 11, 2013
|
|
||
|
|
|
5,000
|
|
8.10
|
|
May 28, 2014
|
|
||
|
|
|
22,500
|
|
5.00
|
|
December 9, 2014
|
|
||
|
|
|
17,500
|
|
2.22
|
|
December 12, 2017
|
|
||
|
|
|
17,500
|
|
3.06
|
|
December 8, 2019
|
|
||
|
|
|
45,000
|
|
6.72
|
|
December 14, 2020
|
|
||
|
|
|
9,000
|
|
4.31
|
|
July 27, 2021
|
|
||
|
|
|
55,000
|
|
3.89
|
|
December 14, 2021
|
|
||
|
|
|
45,000
|
|
4.21
|
|
December 17, 2022
|
|
||
|
|
|
247,500
|
|
|
|
**
|
|||
|
|
|
|
|
|
|
||||
Jim Dinning
|
30,000
|
|
**
|
50,000
|
|
6.90
|
|
March 29, 2014
|
|
|
|
|
|
5,000
|
|
8.10
|
|
May 28, 2014
|
|
||
|
|
|
22,500
|
|
5.00
|
|
December 9, 2014
|
|
||
|
|
|
10,000
|
|
2.25
|
|
December 15, 2016
|
|
||
|
|
|
17,500
|
|
2.22
|
|
December 12, 2017
|
|
||
|
|
|
17,500
|
|
3.06
|
|
December 8, 2019
|
|
||
|
|
|
30,000
|
|
6.72
|
|
December 14, 2020
|
|
||
|
|
|
35,000
|
|
3.89
|
|
December 14, 2021
|
|
||
|
|
|
35,000
|
|
4.21
|
|
December 17, 2022
|
|
||
|
|
|
222,500
|
|
|
|
**
|
|||
Mark Lievonen
|
3,000
|
|
**
|
50,000
|
|
9.38
|
|
April 5, 2014
|
|
|
|
|
|
5,000
|
|
8.10
|
|
May 28, 2014
|
|
||
|
|
|
22,500
|
|
5.00
|
|
December 9, 2014
|
|
||
|
|
|
10,000
|
|
2.25
|
|
December 15, 2016
|
|
||
|
|
|
17,500
|
|
2.22
|
|
December 12, 2017
|
|
||
|
|
|
17,500
|
|
3.06
|
|
December 8, 2019
|
|
||
|
|
|
30,000
|
|
6.72
|
|
December 14, 2020
|
|
||
|
|
|
35,000
|
|
3.89
|
|
December 14, 2021
|
|
||
|
|
|
35,000
|
|
4.21
|
|
December 17, 2022
|
|
||
|
|
|
222,500
|
|
|
|
**
|
|||
William Cochrane
|
54,700
|
|
**
|
4,000
|
|
3.33
|
|
August 5, 2013
|
|
|
|
|
|
10,000
|
|
4.50
|
|
December 11, 2013
|
|
||
|
|
|
5,000
|
|
8.10
|
|
May 28, 2014
|
|
||
|
|
|
22,500
|
|
5.00
|
|
December 9, 2014
|
|
||
|
|
|
10,000
|
|
2.25
|
|
December 15, 2016
|
|
||
|
|
|
17,500
|
|
2.22
|
|
December 12, 2017
|
|
||
|
|
|
17,500
|
|
3.06
|
|
December 8, 2019
|
|
|
||||||||||
|
|
|
30,000
|
|
6.72
|
|
December 14, 2020
|
|
||
|
|
|
30,000
|
|
3.89
|
|
December 14, 2021
|
|
||
|
|
|
30,000
|
|
4.21
|
|
December 17, 2022
|
|
||
|
|
|
176,500
|
|
|
|
**
|
|||
Ed Levy
|
21,300
|
|
**
|
50,000
|
|
4.10
|
|
May 16, 2016
|
|
|
|
|
|
10,000
|
|
2.25
|
|
December 15, 2016
|
|
||
|
|
|
17,500
|
|
2.22
|
|
December 12, 2017
|
|
||
|
|
|
17,500
|
|
3.06
|
|
December 8, 2019
|
|
||
|
|
|
30,000
|
|
6.72
|
|
December 14, 2020
|
|
||
|
|
|
30,000
|
|
3.89
|
|
December 14, 2021
|
|
||
|
|
|
30,000
|
|
4.21
|
|
December 17, 2022
|
|
||
|
|
|
185,000
|
|
|
|
**
|
|||
Ger van Amersfoort
|
16,000
|
|
**
|
50,000
|
|
3.60
|
|
June 15, 2016
|
|
|
|
|
|
10,000
|
|
2.25
|
|
December 15, 2016
|
|
||
|
|
|
17,500
|
|
2.22
|
|
December 12, 2017
|
|
||
|
|
|
17,500
|
|
3.06
|
|
December 8, 2019
|
|
||
|
|
|
30,000
|
|
6.72
|
|
December 14, 2020
|
|
||
|
|
|
30,000
|
|
3.89
|
|
December 14, 2021
|
|
||
|
|
|
30,000
|
|
4.21
|
|
December 17, 2022
|
|
||
|
|
|
185,000
|
|
|
|
**
|
|||
TOTAL:
|
1,216,151
|
|
|
4,714,527
|
|
|
|
|
1)
|
Based on
76,710,285
common shares issued and outstanding on December 31,
2012
.
|
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
91,139,607
.
|
4)
|
These options are currently captured by the Company's trading policy and associated blackout provisions. The expiry date of these options will be set at 10 trading days after the blackout period which is expected to occur in June 2013.
|
A.
|
Major Shareholders
|
Name of
Shareholder
|
Total Number of Common
Shares Held
|
Percentage of
Outstanding
%
|
||
Acuity Investment Management Inc.
(1)
|
12,454,250
|
|
14.69
|
%
|
Total Number of Holders of Record
|
Total Number of Common Shares Issued and Outstanding
|
Number of U.S. Holders of Record
|
Number of Common Shares Held by U.S. Holders of Record
|
Percentage of Common Shares Held by U.S. Holders of Record
|
||
194
|
84,758,818
|
53
|
14,379,080
|
|
16.96
|
%
|
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
|
D.
|
Selling Shareholders
|
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.
|
C.
|
Material Contracts
|
D.
|
Exchange Controls
|
E.
|
Taxation
|
F.
|
Dividends and Paying Agents
|
G.
|
Statements by Experts
|
H.
|
Documents on Display
|
I.
|
Subsidiary Information
|
A.
|
Debt Securities
|
B.
|
Warrants and Rights
|
C.
|
Other Securities
|
D.
|
American Depository Shares
|
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 Disclosures 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
|
|
2012
|
2011
|
2010
|
|||
Item
|
$
|
$
|
$
|
|||
Audit fees
|
125,370
|
|
181,709
|
|
190,448
|
|
Audit-related fees
(1),(3)
|
83,068
|
|
107,085
|
|
65,994
|
|
Tax fees
(2)
|
18,912
|
|
32,147
|
|
26,041
|
|
All other fees
(4)
|
—
|
|
—
|
|
23,675
|
|
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 the provision of a consent letter for various filings.
|
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
(a)
|
Articles of Incorporation
|
1.2
(a)
|
By-laws
|
|
|
|
Material Contracts
|
4.1
(b)
|
Services Agreement, dated October 16, 2002, between the Company and its Senior Vice President, Clinical and Regulatory Affairs, George Gill
|
4.2
(c)
|
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
(c)
|
Employment Agreement, dated January 12, 2007, between the Company and its Vice President, Intellectual Property, Mary Ann Dillahunty
|
4.4
(c)
|
Executive Employment Agreement, dated May 29, 2007, between the Company and its Chief Scientific Officer, Matthew Coffey
|
4.5
(c)
|
Executive Employment Agreement, dated May 29, 2007, between the Company and its Chief Medical Officer, Dr. Karl Mettinger
|
4.6
(c)
|
Executive Employment Agreement, dated May 30, 2007, between the Company and its Chief Financial Officer, Douglas Ball
|
4.7
(c)
|
Executive Employment Agreement, dated June 6, 2007, between the Company and its Chief Executive Officer, Bradley Thompson
|
4.8
(c)
|
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
(d)
|
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
(d)
|
Amendment No.1, dated March 7, 2008, between the Company and its Chief Scientific Officer, Matthew Coffey, dated May 29, 2007
|
4.11
(d)
|
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
(d)
|
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
(d)
|
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
(d)
|
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
(d)
|
Executive Employment Agreement, dated January 26, 2009, between Oncolytics Biotech (U.S.) Inc. and its Chief Medical Officer, Dr. Karl Mettinger
|
4.16
(d)
|
Executive Employment Agreement, dated January 22, 2009 between the Company and its Vice President, Intellectual Property, Mary Ann Dillahunty.
|
4.17
(e)
|
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
|
4.18
(f)
|
Employment Agreement, dated January 1, 2011 between the Company and its Senior Vice President, Clinical and Regulatory Affairs, George Gill.
|
4.19
(f)
|
Executive Employment Agreement, dated November 10, 2011 between the Company and its Senior Vice President of Clinical Development and Chief Medical Officer, Gerard T. Kennealey.
|
4.20
|
Executive Employment Agreement, dated March 22. 2013, between the Company and its Chief Operating Officer, Matthew Coffey
|
4.21
|
Executive Employment Agreement, dated September 27, 2012, between Oncolytics Biotech (U.S.) Inc. and its Senior Vice President, Medical and Clinical Affairs Chief Medical Officer, Dr. Alan Tuchman
|
4.22
|
Executive Employment Agreement, dated March 22, 2013, between the Company and its Chief Financial Officer, Kirk Look
|
4.23
|
Executive Employment Agreement, dated March 22, 2013, between the Company and its Chief Executive Officer, Bradley Thompson
|
|
|
|
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, 2012
|
15.2
|
Consent of Ernst & Young LLP
|
/s/ Brad Thompson
|
/s/ Kirk Look
|
Brad Thompson, Ph.D
|
Kirk Look, CA
|
Chief Executive Officer
|
Chief Financial Officer
|
/s/ Brad Thompson
|
/s/ Kirk Look
|
|
|
Brad Thompson, Ph.D
|
Kirk Look, CA
|
Chief Executive Officer
|
Chief Financial Officer
|
|
|
Calgary, Canada
March 13, 2013
|
Chartered Accountants
|
|
|
Calgary, Canada
March 13, 2013
|
Chartered Accountants
|
|
Notes
|
December 31, 2012
$
|
December 31, 2011
$
|
|||
Assets
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
5
|
19,323,541
|
|
32,918,751
|
|
|
Short-term investments
|
5
|
1,969,228
|
|
1,936,787
|
|
|
Accounts receivable
|
|
44,979
|
|
55,392
|
|
|
Prepaid expenses
|
|
331,094
|
|
721,576
|
|
|
Total current assets
|
|
21,668,842
|
|
35,632,506
|
|
|
Non-current assets
|
|
|
|
|
|
|
Property and equipment
|
6
|
|
409,248
|
|
392,111
|
|
Total non-current assets
|
|
409,248
|
|
392,111
|
|
|
|
|
|
|
|||
Total assets
|
|
22,078,090
|
|
36,024,617
|
|
|
Liabilities And Shareholders’ Equity
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
7,291,310
|
|
6,504,238
|
|
|
Total current liabilities
|
|
7,291,310
|
|
6,504,238
|
|
|
Commitments and contingencies
|
10, 11, 16 and 17
|
|
|
|||
Shareholders’ equity
|
|
|
|
|
|
|
Share capital
Authorized: unlimited Issued: December 31, 2012 – 76,710,285 December 31, 2011 – 71,251,335 |
7
|
198,155,091
|
|
177,282,566
|
|
|
Warrants
|
7
|
376,892
|
|
2,653,627
|
|
|
Contributed surplus
|
7, 8
|
24,126,265
|
|
21,142,519
|
|
|
Accumulated other comprehensive loss
|
|
(57,115
|
)
|
(117,501
|
)
|
|
Accumulated deficit
|
|
(207,814,353
|
)
|
(171,440,832
|
)
|
|
Total shareholders’ equity
|
|
|
14,786,780
|
|
29,520,379
|
|
Total liabilities and equity
|
|
|
22,078,090
|
|
36,024,617
|
|
On behalf of the Board:
|
|
/s/ Fred Stewart
|
/s/ Bob Schultz
|
Director
|
Director
|
For the years ending December 31,
|
Notes
|
2012
$ |
2011
$ |
2010
$ |
||||
Expenses
|
|
|
|
|
|
|
|
|
Research and development
|
8, 19, 20
|
|
31,402,625
|
|
23,386,685
|
|
13,882,565
|
|
Operating
|
8, 19, 20
|
|
5,285,425
|
|
5,334,582
|
|
6,003,870
|
|
Loss before the following
|
|
|
(36,688,050
|
)
|
(28,721,267
|
)
|
(19,886,435
|
)
|
Write down of asset available for sale
|
21
|
|
—
|
|
(735,681
|
)
|
—
|
|
Change in fair value of warrant liability
|
|
|
—
|
|
36,000
|
|
(4,841,949
|
)
|
Interest
|
|
|
345,003
|
|
416,247
|
|
76,934
|
|
Loss before income taxes
|
|
|
(36,343,047
|
)
|
(29,004,701
|
)
|
(24,651,450
|
)
|
Income tax expense
|
12
|
|
(30,474
|
)
|
(40,000
|
)
|
(7,611
|
)
|
Net loss
|
|
|
(36,373,521
|
)
|
(29,044,701
|
)
|
(24,659,061
|
)
|
Other comprehensive gain (loss) - translation adjustment
|
|
|
60,386
|
|
39,159
|
|
(156,660
|
)
|
Net comprehensive loss
|
|
|
(36,313,135
|
)
|
(29,005,542
|
)
|
(24,815,721
|
)
|
Basic and diluted loss per common share
|
9
|
|
(0.48
|
)
|
(0.41
|
)
|
(0.39
|
)
|
Weighted average number of shares (basic and diluted)
|
|
76,102,062
|
|
70,911,526
|
|
62,475,403
|
|
|
Share Capital
$
|
Warrants
$
|
Contributed Surplus
$
|
Accumulated Other Comprehensive Income
$
|
Accumulated Deficit
$
|
Total
$
|
||||||
As at January 1, 2010
|
131,908,274
|
|
2,437,460
|
|
13,734,743
|
|
—
|
|
(117,737,070
|
)
|
30,343,407
|
|
|
|
|
|
|
|
|
||||||
Net loss and comprehensive loss
|
—
|
|
—
|
|
—
|
|
(156,660
|
)
|
(24,659,061
|
)
|
(24,815,721
|
)
|
Issue of common shares, public offering
|
22,639,719
|
|
4,120,201
|
|
—
|
|
—
|
|
—
|
|
26,759,920
|
|
Exercise of warrants
|
787,508
|
|
(11,009
|
)
|
—
|
|
—
|
|
—
|
|
776,499
|
|
Exercise of stock options
|
104,109
|
|
—
|
|
(24,295
|
)
|
—
|
|
—
|
|
79,814
|
|
Expired warrants
|
—
|
|
(2,438,000
|
)
|
2,438,000
|
|
—
|
|
—
|
|
—
|
|
Share based compensation
|
—
|
|
—
|
|
3,251,041
|
|
—
|
|
—
|
|
3,251,041
|
|
As at December 31, 2010
|
155,439,610
|
|
4,108,652
|
|
19,399,489
|
|
(156,660
|
)
|
(142,396,131
|
)
|
36,394,960
|
|
|
|
|
|
|
|
|
||||||
Net loss and comprehensive income
|
—
|
|
—
|
|
—
|
|
39,159
|
|
(29,044,701
|
)
|
(29,005,542
|
)
|
Exercise of warrants
|
21,487,080
|
|
(1,455,025
|
)
|
—
|
|
—
|
|
—
|
|
20,032,055
|
|
Exercise of stock options
|
355,876
|
|
—
|
|
(62,473
|
)
|
—
|
|
—
|
|
293,403
|
|
Share based compensation
|
—
|
|
—
|
|
1,805,503
|
|
—
|
|
—
|
|
1,805,503
|
|
As at December 31, 2011
|
177,282,566
|
|
2,653,627
|
|
21,142,519
|
|
(117,501
|
)
|
(171,440,832
|
)
|
29,520,379
|
|
|
|
|
|
|
|
|
||||||
Net loss and comprehensive income
|
—
|
|
—
|
|
—
|
|
60,386
|
|
(36,373,521
|
)
|
(36,313,135
|
)
|
Issued, pursuant to a bought deal financing
|
19,386,903
|
|
376,892
|
|
—
|
|
—
|
|
—
|
|
19,763,795
|
|
Expiry of warrants
|
—
|
|
(2,653,627
|
)
|
2,653,627
|
|
—
|
|
—
|
|
—
|
|
Exercise of stock options
|
1,485,622
|
|
—
|
|
(400,632
|
)
|
—
|
|
—
|
|
1,084,990
|
|
Share based compensation
|
—
|
|
—
|
|
730,751
|
|
—
|
|
—
|
|
730,751
|
|
As at December 31, 2012
|
198,155,091
|
|
376,892
|
|
24,126,265
|
|
(57,115
|
)
|
(207,814,353
|
)
|
14,786,780
|
|
For the years ending December 31,
|
Notes
|
2012
$
|
2011
$
|
2010
$
|
|||
|
|
|
|
|
|
|
|
Operating Activities
|
|
|
|
|
|
|
|
Net loss for the year
|
|
(36,373,521
|
)
|
(29,044,701
|
)
|
(24,659,061
|
)
|
Amortization - property and equipment
|
|
109,275
|
|
92,590
|
|
63,156
|
|
Share based compensation
|
8, 19, 20
|
730,751
|
|
1,805,503
|
|
3,251,041
|
|
Change in fair value of warrant liability
|
|
—
|
|
(36,000
|
)
|
4,841,949
|
|
Write down of asset available for sale
|
|
—
|
|
735,681
|
|
—
|
|
Unrealized foreign exchange loss
|
19
|
89,890
|
|
115,234
|
|
343,821
|
|
Net change in non-cash working capital
|
15
|
1,187,967
|
|
3,790,510
|
|
(1,717,978
|
)
|
Cash used in operating activities
|
|
(34,255,638
|
)
|
(22,541,183
|
)
|
(17,877,072
|
)
|
Investing Activities
|
|
|
|
|
|
|
|
Acquisition of property and equipment
|
6
|
(126,412
|
)
|
(257,790
|
)
|
(81,846
|
)
|
Acquisition of investment
|
21
|
—
|
|
—
|
|
(51,681
|
)
|
Redemption (purchase) of short-term investments
|
5
|
(32,441
|
)
|
1,672,459
|
|
(1,929,309
|
)
|
Cash provided by (used in) investing activities
|
|
(158,853
|
)
|
1,414,669
|
|
(2,062,836
|
)
|
Financing Activities
|
|
|
|
|
|
|
|
Proceeds from exercise of stock options and warrants
|
7, 8
|
1,084,990
|
|
14,824,658
|
|
528,211
|
|
Proceeds from public offering
|
7
|
19,763,795
|
|
—
|
|
26,759,921
|
|
Cash provided by financing activities
|
|
20,848,785
|
|
14,824,658
|
|
27,288,132
|
|
Increase (decrease) in cash
|
|
(13,565,706
|
)
|
(6,301,856
|
)
|
7,348,224
|
|
Cash and cash equivalents, beginning of year
|
|
32,918,751
|
|
39,296,682
|
|
32,448,939
|
|
Impact of foreign exchange on cash and cash equivalents
|
|
(29,504
|
)
|
(76,075
|
)
|
(500,481
|
)
|
Cash and cash equivalents, end of year
|
|
19,323,541
|
|
32,918,751
|
|
39,296,682
|
|
|
Face
Value
$
|
|
Original Cost
$
|
|
Accrued Interest
$
|
|
Carrying
Value
$
|
|
Fair
Value
$
|
|
Effective
Interest Rate
%
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
Short-term investments
|
1,969,228
|
|
1,969,228
|
|
—
|
|
1,969,228
|
|
1,969,228
|
|
1.64%
|
December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
Short-term investments
|
1,936,787
|
|
1,936,787
|
|
—
|
|
1,936,787
|
|
1,936,787
|
|
1.68%
|
|
Medical Equipment
|
Computer Equipment
|
Office Furniture
|
Office Equipment
|
Leasehold Improvements
|
Total
|
||||||
Cost
|
|
|
|
|
|
|
||||||
As at December 31, 2010
|
107,471
|
|
339,074
|
|
117,357
|
|
37,236
|
|
139,616
|
|
740,754
|
|
Additions
|
36,788
|
|
120,120
|
|
29,633
|
|
18,866
|
|
52,383
|
|
257,790
|
|
As at December 31, 2011
|
144,259
|
|
459,194
|
|
146,990
|
|
56,102
|
|
191,999
|
|
998,544
|
|
Additions
|
44,280
|
|
46,001
|
|
23,035
|
|
21,953
|
|
(8,857
|
)
|
126,412
|
|
As at December 31, 2012
|
188,539
|
|
505,195
|
|
170,025
|
|
78,055
|
|
183,142
|
|
1,124,956
|
|
|
|
|
|
|
|
|
||||||
Amortization
|
|
|
|
|
|
|
||||||
As at December 31, 2010
|
59,329
|
|
213,744
|
|
79,024
|
|
28,813
|
|
132,933
|
|
513,843
|
|
Amortization for the year
|
9,817
|
|
61,770
|
|
6,561
|
|
2,466
|
|
11,976
|
|
92,590
|
|
As at December 31, 2011
|
69,146
|
|
275,514
|
|
85,585
|
|
31,279
|
|
144,909
|
|
606,433
|
|
Amortization for the year
|
18,358
|
|
62,747
|
|
9,947
|
|
7,561
|
|
10,662
|
|
109,275
|
|
As at December 31, 2012
|
87,504
|
|
338,261
|
|
95,532
|
|
38,840
|
|
155,571
|
|
715,708
|
|
|
|
|
|
|
|
|
||||||
Net book value
|
|
|
|
|
|
|
||||||
As at December 31, 2012
|
101,035
|
|
166,934
|
|
74,493
|
|
39,215
|
|
27,571
|
|
409,248
|
|
As at December 31, 2011
|
75,113
|
|
183,680
|
|
61,405
|
|
24,823
|
|
47,090
|
|
392,111
|
|
Issued:
|
Shares
|
Warrants
|
||||||||
|
Number
|
Amount
$ |
Number
|
Equity Amount
$ |
Liability Amount
$ |
|||||
Balance, January 1, 2010
|
61,549,969
|
|
131,908,274
|
|
4,255,000
|
|
2,437,460
|
|
1,023,051
|
|
|
|
|
|
|
|
|||||
Issued for cash pursuant to November 8, 2010 bought deal financing
(a)
|
6,256,000
|
|
22,639,719
|
|
3,503,360
|
|
4,120,202
|
|
—
|
|
Exercise of warrants
|
119,900
|
|
787,508
|
|
(119,900
|
)
|
(11,010
|
)
|
(328,200
|
)
|
Expired warrants
|
—
|
|
—
|
|
(2,300,000
|
)
|
(2,438,000
|
)
|
—
|
|
Exercise of stock options
|
32,433
|
|
104,109
|
|
—
|
|
—
|
|
—
|
|
Revaluation of warrant liability
|
—
|
|
—
|
|
—
|
|
—
|
|
4,841,949
|
|
Balance, December 31, 2010
|
67,958,302
|
|
155,439,610
|
|
5,338,460
|
|
4,108,652
|
|
5,536,800
|
|
|
|
|
|
|
|
|||||
Exercise of US$3.50 warrants
|
1,833,600
|
|
11,897,142
|
|
(1,833,600
|
)
|
—
|
|
(5,500,800
|
)
|
Exercise of warrants
|
1,322,750
|
|
9,589,938
|
|
(1,322,750
|
)
|
(1,455,025
|
)
|
—
|
|
Exercise of stock options
|
136,683
|
|
355,876
|
|
—
|
|
—
|
|
—
|
|
Expired warrants
|
—
|
|
—
|
|
(12,000
|
)
|
—
|
|
(36,000
|
)
|
Balance, December 31, 2011
|
71,251,335
|
|
177,282,566
|
|
2,170,110
|
|
2,653,627
|
|
—
|
|
|
|
|
|
|
|
|||||
Exercise of stock options
|
393,200
|
|
1,485,622
|
|
—
|
|
—
|
|
—
|
|
Issued for cash, pursuant to February 8, 2012 bought deal financing
(b)
|
5,065,750
|
|
21,276,150
|
|
303,945
|
|
376,892
|
|
—
|
|
Expired warrants
|
—
|
|
—
|
|
(2,170,110
|
)
|
(2,653,627
|
)
|
—
|
|
Share issue costs
|
—
|
|
(1,889,247
|
)
|
—
|
|
—
|
|
—
|
|
Balance, December 31, 2012
|
76,710,285
|
|
198,155,091
|
|
303,945
|
|
376,892
|
|
—
|
|
(a)
|
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 0.50 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 expire 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.
|
(b)
|
Pursuant to a bought deal financing, we issued 5,065,750 common shares at an issue price of $4.20 per common share for gross proceeds of $21,276,150. In connection with this bought deal financing, we issued 303,945 compensation options to the underwriters with an exercise price of $4.20 expiring on February 8, 2014 ("Broker Warrants"). The fair value of the Broker Warrants was $376,892 ($1.24 per Broker Warrant) and has been included in the share issue costs of the financing. The fair value was determined using the Black Scholes Option Pricing Model.
|
Exercise Price
|
Outstanding, Beginning of the Period
|
Granted During the Period
|
Exercised During the Period
|
Expired During the Period
|
Outstanding, End of Period
|
Weighted Average Remaining Contractual Life (years)
|
||||||||
|
$4.20
|
|
—
|
|
303,945
|
|
—
|
|
—
|
|
303,945
|
|
1.08
|
|
|
$4.60
|
|
375,360
|
|
—
|
|
—
|
|
(375,360
|
)
|
—
|
|
—
|
|
6.15
|
|
1,794,750
|
|
—
|
|
—
|
|
(1,794,750
|
)
|
—
|
|
—
|
|
|
|
2,170,110
|
|
303,945
|
|
—
|
|
(2,170,110
|
)
|
303,945
|
|
1.08
|
|
|
2012
|
2011
|
2010
|
|||||||
|
Stock Options
|
Weighted Average Exercise Price
$ |
Stock Options
|
Weighted Average Exercise Price
$ |
Stock Options
|
Weighted Average Exercise Price
$ |
||||
Outstanding, beginning of the year
|
5,677,577
|
|
4.35
|
4,703,760
|
|
4.53
|
3,936,543
|
|
4.72
|
|
Granted during the year
|
1,155,500
|
|
3.57
|
1,325,000
|
|
4.21
|
1,183,000
|
|
5.73
|
|
Forfeited during the year
|
(274,500
|
)
|
5.10
|
(15,500
|
)
|
5.66
|
(8,350
|
)
|
4.10
|
|
Expired during the year
|
(240,000
|
)
|
3.90
|
(199,000
|
)
|
8.35
|
(375,000
|
)
|
10.56
|
|
Exercised during the year
|
(393,200
|
)
|
2.76
|
(136,683
|
)
|
2.15
|
(32,433
|
)
|
2.46
|
|
Outstanding, end of the year
|
5,925,377
|
|
4.31
|
5,677,577
|
|
4.37
|
4,703,760
|
|
4.53
|
|
Options exercisable, end of the year
|
5,744,044
|
|
4.37
|
5,384,911
|
|
4.35
|
4,654,926
|
|
4.54
|
|
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
|
888,627
|
|
6.5
|
2.14
|
718,627
|
|
2.16
|
$2.70 - $3.89
|
1,917,000
|
|
6.9
|
3.52
|
1,911,167
|
|
3.53
|
$4.00 - $5.92
|
2,090,750
|
|
5.2
|
4.60
|
2,085,250
|
|
4.60
|
$6.72 - $9.76
|
1,029,000
|
|
6.4
|
7.04
|
1,029,000
|
|
7.04
|
|
5,925,377
|
|
6.2
|
4.31
|
5,744,044
|
|
4.37
|
|
2012
|
2011
|
2010
|
|
|
|
|
Risk-free interest rate
|
1.15%
|
1.31%
|
1.85%
|
Expected hold period to exercise
|
2.13 years
|
3.35 years
|
3.0 years
|
Volatility in the price of the Company's shares
|
56.58%
|
57.28%
|
71%
|
Rate of forfeiture
|
—%
|
—%
|
—%
|
Dividend yield
|
Nil
|
Nil
|
Nil
|
Weighted average fair value of options
|
$0.80
|
$1.74
|
$2.76
|
|
Amount
$
|
|
2013
|
91,332
|
|
2014
|
94,888
|
|
2015
|
97,428
|
|
2016
|
40,595
|
|
|
324,243
|
|
|
2012
|
2011
|
2010
|
|||
Loss before income taxes
|
(36,343,047
|
)
|
(29,004,701
|
)
|
(24,651,450
|
)
|
Statutory Canadian corporate tax rate
|
25.00
|
%
|
26.50
|
%
|
28.00
|
%
|
Anticipated tax recovery
|
(9,085,762
|
)
|
(7,686,246
|
)
|
(6,902,406
|
)
|
Foreign jurisdiction tax rate difference
|
7,218,015
|
|
5,797,338
|
|
3,431,667
|
|
Employee stock based compensation
|
182,688
|
|
478,458
|
|
910,291
|
|
Write down of asset available for sale
|
—
|
|
97,478
|
|
—
|
|
Revaluation of the fair value of the warrant liability
|
—
|
|
(9,540
|
)
|
1,355,746
|
|
Change in tax rate
|
(686,250
|
)
|
64,163
|
|
124,696
|
|
Adjustment to opening tax pools
|
24,534
|
|
145,990
|
|
(242,261
|
)
|
Other permanent differences
|
243,324
|
|
(144,093
|
)
|
(306,943
|
)
|
Change in deferred tax benefits deemed not probable to
be recovered |
2,133,925
|
|
1,296,452
|
|
1,636,821
|
|
Deferred income tax recovery
|
—
|
|
—
|
|
—
|
|
Current income taxes
|
30,474
|
|
40,000
|
|
7,611
|
|
|
2012
|
2011
|
2010
|
|||
|
$
|
$
|
$
|
|||
Net operating losses carried forward
|
11,874,273
|
|
9,569,715
|
|
8,251,442
|
|
Scientific research and experimental development
|
4,639,667
|
|
4,528,214
|
|
4,408,673
|
|
Investment tax credits
|
3,075,619
|
|
2,990,243
|
|
3,078,664
|
|
Undepreciated capital costs in excess of book value of property and equipment and intellectual property
|
1,764,604
|
|
1,049,984
|
|
994,220
|
|
Share issue costs
|
635,495
|
|
592,848
|
|
939,502
|
|
Net capital losses carried forward
|
7,035
|
|
91,960
|
|
—
|
|
Unrecognized deferred tax asset
|
21,996,693
|
|
18,822,964
|
|
17,672,501
|
|
|
2012
|
2011
|
||
|
$
|
$
|
||
Cash and cash equivalents
|
19,323,541
|
|
32,918,751
|
|
Short-term investments
|
1,969,228
|
|
1,936,787
|
|
Shareholders’ equity
|
14,786,780
|
|
29,520,379
|
|
|
U.S. dollars
$
|
British pounds
£
|
Euro
€ |
|||
Cash and cash equivalents
|
3,160,494
|
|
53,612
|
|
21,715
|
|
Accounts payable
|
(1,199,092
|
)
|
(57,909
|
)
|
(135,328
|
)
|
|
1,961,402
|
|
(4,297
|
)
|
(113,613
|
)
|
|
2012
$
|
2011
$
|
2010
$
|
|||
Change in:
|
|
|
|
|
|
|
Accounts receivable
|
10,413
|
|
229,596
|
|
(220,201
|
)
|
Prepaid expenses
|
390,482
|
|
(442,642
|
)
|
228,474
|
|
Accounts payable and accrued liabilities
|
787,072
|
|
4,003,556
|
|
(1,726,251
|
)
|
Change in non-cash working capital related to operating activities
|
1,187,967
|
|
3,790,510
|
|
(1,717,978
|
)
|
|
2012
$
|
2011
$
|
2010
$
|
|||
Cash interest received
|
341,503
|
|
416,247
|
|
76,934
|
|
Cash taxes paid
|
22,800
|
|
3,094
|
|
7,611
|
|
|
2012
$
|
2011
$
|
2010
$
|
|||
Short-term employee benefits
|
2,544,285
|
|
2,570,064
|
|
2,245,396
|
|
Share-based payments
|
809,381
|
|
1,444,260
|
|
2,854,500
|
|
|
3,353,666
|
|
4,014,324
|
|
5,099,896
|
|
Forward-Looking Statements
|
|
Manufacturing
and Process Development
|
|
Conference/Meeting
|
Abstract/Poster Title
|
Description/Conclusion
|
American Association for Cancer Research Annual meeting in Chicago, IL
|
Reovirus (REOLYSIN) as a potential therapy for malignant peripheral nerve sheath tumors
|
The poster covered preclinical work in malignant peripheral nerve sheath tumors (MPNST), a rare form of soft tissue sarcoma. The results showed that MPNST-derived cell lines including sporadic MPNST without active Ras were efficiently transduced, promoted virus replication and were killed by the oncolytic reovirus.
|
American Association for Cancer Research Annual meeting in Chicago, IL
|
REOLYSIN: A novel reovirus-based agent that induces endoplasmic reticular stress in RAS-activated pancreatic cancer
|
The poster covered preclinical work done to better understand the mechanisms associated with the synergies in this co-treatment approach. The results demonstrate that the abnormal protein accumulation induced by REOLYSIN and bortezomib promotes heightened ER stress and apoptosis in pancreatic cancer cells.
|
American Association for Cancer Research Annual meeting in Chicago, IL
|
Oncolytic reovirus synergizes with bortezomib and dexamethasone in overcoming therapy resistance of multiple myeloma
|
The poster covered preclinical work done in therapy resistant multiple myeloma (MM) cell lines. The investigators noted that highly synergistic cytotoxicity was observed with reovirus and bortezomib in both reovirus and drug resistant cell lines OPM2 and KMS-11 at all drug combination ratios. Dexamethasone and reovirus treatment induced synergy in OPM2 cells.
|
American Association for Cancer Research Annual meeting in Chicago, IL
|
Serum regulates reovirus-mediated cytopathy in K-Ras activated colorectal cancer and intestinal epithelial cell lines
|
The poster covered the use of isogenic human-derived colorectal cancer cell lines that differ only by the presence of mutantKras and normal rat intestinal epithelial cells (IEC) with inducible Kras to evaluate whether the presence of oncogenic Kras alters the sensitivity of colon cancer cells to reovirus. The investigators demonstrated that the activity of reovirus was observed in all cell lines studied. Reduction in cell variability was greater inKras-mutant HCT116 compared to WT Hke3 cells. Consistently, induction of Kras in IEC cells increased the potency of reovirus.
|
EORTC-NCI-AACR Symposium on Molecular Targets and Cancer Therapeutics held in Dublin, Ireland in November 2012.
|
"Reovirus Therapy Induces Endoplasmic Reticular (ER) Stress and Apoptosis in RAS-Activated Pancreatic Cancer"
|
The researchers demonstrated that cells with activated RAS are under intrinsically higher levels of ER stress and that reovirus infection leads to enhanced ER stress and apoptosis in mutant RAS pancreatic cancer cells. Further induction of ER stress with bortezomib increases the efficacy of REOLYSIN against pancreatic cancer cells.
|
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, that we can demonstrate the existence of a market for our product that results from the use of the intangible asset or of the intangible asset itself.
|
5.
|
The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset.
|
6.
|
The ability to measure reliably the expenditure attributable to the intangible asset during its development.
|
|
2012
|
|
|
Risk-free interest rate
|
1.15%
|
Expected hold period to exercise
|
2.13 years
|
Volatility in the price of the Company's shares
|
56.58%
|
Rate of forfeiture
|
—%
|
Dividend yield
|
Nil
|
Weighted average fair value of options
|
$0.80
|
|
2012
$
|
2011
$
|
2010
$
|
|||
Revenue
|
—
|
|
—
|
|
—
|
|
Consolidated net loss
(1)
|
(36,373,521
|
)
|
(29,044,701
|
)
|
(24,659,061
|
)
|
Basic and diluted loss per share
(1), (2)
|
(0.48
|
)
|
(0.41
|
)
|
(0.39
|
)
|
Total assets
(2)
|
22,078,090
|
|
36,024,617
|
|
44,432,442
|
|
Cash dividends declared per share
(3)
|
Nil
|
|
Nil
|
|
Nil
|
|
Notes:
|
||||||
(1) Included in consolidated net loss and loss per common share for 2012, 2011 and 2010 are share based payment expenses of $730,751, $1,805,503, and $3,251,041, respectively.
|
||||||
(2) We issued 5,065,750 common shares for net cash proceeds of $19,763,795 in 2012 (2011 - 3,293,003 common shares for net cash proceeds of $14,824,658; 2010 - 6,408,333 common shares for net cash proceeds of $27,288,132).
|
||||||
(3) We have not declared or paid any dividends since incorporation.
|
|
2012 $ |
2011 $ |
2010 $ |
|||
Clinical trial expenses
|
19,813,849
|
|
10,286,487
|
|
4,159,064
|
|
Manufacturing and related process development expenses
|
5,834,894
|
|
6,171,474
|
|
4,528,115
|
|
Intellectual property expenditures
|
841,133
|
|
937,847
|
|
1,020,897
|
|
Research collaboration expenses
|
248,970
|
|
234,426
|
|
303,929
|
|
Other R&D expenses
|
4,379,894
|
|
4,327,271
|
|
2,711,310
|
|
Scientific research and development repayment (refund)
|
(78,549
|
)
|
119,758
|
|
(531,506
|
)
|
Foreign exchange loss
|
(43,695
|
)
|
171,955
|
|
190,026
|
|
Share based payments
|
406,129
|
|
1,137,467
|
|
1,500,730
|
|
Research and development expenses
|
31,402,625
|
|
23,386,685
|
|
13,882,565
|
|
|
2012 $ |
2011 $ |
2010 $ |
|||
Direct patient expenses
|
19,430,751
|
|
3,945,126
|
|
2,630,202
|
|
Phase III start up expenses
|
383,098
|
|
6,341,361
|
|
1,528,862
|
|
Clinical trial expenses
|
19,813,849
|
|
10,286,487
|
|
4,159,064
|
|
|
2012
$
|
2011
$
|
2010
$
|
|||
Product manufacturing expenses
|
4,670,186
|
|
4,411,388
|
|
3,694,324
|
|
Process development expenses
|
1,164,708
|
|
1,760,086
|
|
833,791
|
|
Manufacturing and related process development expenses
|
5,834,894
|
|
6,171,474
|
|
4,528,115
|
|
|
2012 $ |
2011 $ |
2010 $ |
|||
Intellectual property expenses
|
841,133
|
|
937,847
|
|
1,020,897
|
|
|
2012 $ |
2011 $ |
2010 $ |
|||
Research collaborations
|
248,970
|
|
234,426
|
|
303,929
|
|
|
2012 $ |
2011 $ |
2010 $ |
|||
R&D consulting fees
|
404,622
|
|
284,618
|
|
63,071
|
|
R&D salaries and benefits
|
3,394,770
|
|
3,563,958
|
|
2,394,869
|
|
Other R&D expenses
|
580,502
|
|
478,695
|
|
253,370
|
|
Other research and development expenses
|
4,379,894
|
|
4,327,271
|
|
2,711,310
|
|
|
2012 $ |
2011 $ |
2010 $ |
|||
Scientific research and development repayment (refund)
|
(78,549
|
)
|
119,758
|
|
(531,506
|
)
|
|
2012 $ |
2011 $ |
2010 $ |
|||
Foreign exchange (gain) loss
|
(43,695
|
)
|
171,955
|
|
190,026
|
|
|
2012 $ |
2011 $ |
2010 $ |
|||
Share based payments
|
406,129
|
|
1,137,467
|
|
1,500,730
|
|
|
2012 $ |
2011 $ |
2010 $ |
|||
Public company related expenses
|
2,716,982
|
|
3,057,842
|
|
2,806,048
|
|
Office expenses
|
2,134,546
|
|
1,516,114
|
|
1,384,355
|
|
Amortization of property and equipment
|
109,275
|
|
92,590
|
|
63,156
|
|
Stock based compensation
|
324,622
|
|
668,036
|
|
1,750,311
|
|
Operating expenses
|
5,285,425
|
|
5,334,582
|
|
6,003,870
|
|
|
2012 $ |
2011 $ |
2010 $ |
Write down of asset available for sale
|
—
|
(735,681)
|
—
|
|
2012 $ |
2011 $ |
2010 $ |
||
Change in fair value of warrant liability
|
—
|
36,000
|
|
(4,841,949
|
)
|
|
2012
|
2011
|
||||||||||||||||||||||
(unaudited)
|
Dec.
|
Sept.
|
June
|
March
|
Dec.
|
Sept.
|
June
|
March
|
||||||||||||||||
Revenue
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Net loss
(1), (3)
|
8,492
|
|
9,244
|
|
10,179
|
|
8,459
|
|
11,677
|
|
6,232
|
|
7,164
|
|
3,971
|
|
||||||||
Basic and diluted loss per common share
(1), (3)
|
$
|
0.11
|
|
$
|
0.12
|
|
$
|
0.13
|
|
$
|
0.11
|
|
$
|
0.16
|
|
$
|
0.09
|
|
$
|
0.10
|
|
$
|
0.06
|
|
Total assets
(4)
|
22,078
|
|
29,086
|
|
36,561
|
|
47,372
|
|
36,025
|
|
43,053
|
|
49,690
|
|
54,945
|
|
||||||||
Total cash
(2), (4)
|
21,293
|
|
27,977
|
|
35,772
|
|
46,591
|
|
34,856
|
|
42,173
|
|
48,570
|
|
53,521
|
|
||||||||
Total long-term debt
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Cash dividends declared
(5)
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
(1)
|
Included in net loss and net loss per share between December 2012 and January 2011 are quarterly warrant revaluation charges of $nil, $nil, $nil, $nil, $nil, $nil, $nil, and ($36,000), respectively.
|
(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 2012 and January 2011 are quarterly stock based compensation expenses
|
(4)
|
We issued
5,458,950
common shares for net cash proceeds of
$20.8 million
in
2012
(
2011
-
3,293,033
common shares for net cash proceeds of
$14,824,658
).
|
(5)
|
We have not declared or paid any dividends since incorporation.
|
For the three month periods ending December 31,
|
2012
$
(unaudited)
|
2011
$
(unaudited)
|
||
Expenses
|
|
|
||
Research and development
|
6,729,424
|
|
9,616,809
|
|
Operating
|
1,800,057
|
|
2,119,613
|
|
Loss before the following
|
(8,529,481
|
)
|
(11,736,422
|
)
|
Interest
|
57,494
|
|
99,099
|
|
Loss before income taxes
|
(8,471,987
|
)
|
(11,637,323
|
)
|
Income taxes
|
(20,302
|
)
|
(40,000
|
)
|
Net loss
|
(8,492,289
|
)
|
(11,677,323
|
)
|
Other comprehensive gain (loss) - translation adjustment
|
25,907
|
|
10,415
|
|
Net comprehensive loss
|
(8,466,382
|
)
|
(11,666,908
|
)
|
Basic and diluted loss per common share
|
(0.11
|
)
|
(0.16
|
)
|
Weighted average number of shares (basic and diluted)
|
76,693,233
|
|
71,251,335
|
|
|
2012
$
(unaudited)
|
2011
$
(unaudited)
|
||
Clinical trial expenses
|
4,548,871
|
|
4,132,676
|
|
Manufacturing and related process development expenses
|
762,954
|
|
2,607,485
|
|
Intellectual property expenses
|
95,179
|
|
299,699
|
|
Research collaboration expenses
|
36,204
|
|
34,844
|
|
Other R&D expenses
|
822,995
|
|
1,373,338
|
|
Scientific research and development repayment (refund)
|
(15,108
|
)
|
60,000
|
|
Foreign exchange loss
|
12,466
|
|
195,825
|
|
Share based payments
|
465,863
|
|
912,942
|
|
Research and development expenses
|
6,729,424
|
|
9,616,809
|
|
|
2012
$
(unaudited)
|
2011
$
(unaudited)
|
||
Direct clinical trial expenses
|
4,548,871
|
|
1,542,345
|
|
Phase III start up expenses
|
—
|
|
2,590,331
|
|
Clinical trial expenses
|
4,548,871
|
|
4,132,676
|
|
|
2012
$
(unaudited)
|
2011
$
(unaudited)
|
||
Product manufacturing expenses
|
542,917
|
|
1,821,986
|
|
Process development expenses
|
220,037
|
|
785,499
|
|
Manufacturing and related process development expenses
|
762,954
|
|
2,607,485
|
|
|
2012
$
(unaudited)
|
2011
$
(unaudited)
|
||
Intellectual property expenses
|
95,179
|
|
299,699
|
|
|
2012
$
(unaudited)
|
2011
$
(unaudited)
|
Research collaboration expenses
|
36,204
|
34,844
|
|
2012
$
(unaudited)
|
2011
$
(unaudited)
|
||
R&D consulting fees
|
174,319
|
|
47,203
|
|
R&D salaries and benefits
|
661,042
|
|
1,155,164
|
|
Other R&D expenses
|
(12,366
|
)
|
170,971
|
|
Other research and development expenses
|
822,995
|
|
1,373,338
|
|
|
2012
$
(unaudited)
|
2011
$
(unaudited)
|
||
Stock based compensation
|
465,863
|
|
912,942
|
|
|
2012
$
(unaudited)
|
2011
$
(unaudited)
|
||
Public company related expenses
|
641,699
|
|
877,073
|
|
Office expenses
|
818,699
|
|
550,439
|
|
Amortization of property and equipment
|
25,282
|
|
24,065
|
|
Stock based compensation
|
314,377
|
|
668,036
|
|
Operating expenses
|
1,800,057
|
|
2,119,613
|
|
|
2012
$
|
2011
$
|
||
Cash and cash equivalents
|
19,323,541
|
|
32,918,751
|
|
Short-term investments
|
1,969,228
|
|
1,936,787
|
|
Working capital position
|
14,377,532
|
|
29,128,268
|
|
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)
|
324,243
|
|
91,332
|
|
192,316
|
|
40,595
|
|
—
|
|
Purchase obligations
|
8,552,656
|
|
8,552,656
|
|
—
|
|
—
|
|
—
|
|
Other long term obligations
|
Nil
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Total contractual obligations
|
9,026,899
|
|
8,643,988
|
|
192,316
|
|
40,595
|
|
150,000
|
|
(1)
|
Our Alberta Heritage Foundation obligation requires repayments upon the realization of sales (see notes to our audited 2012 consolidated financial statements).
|
(2)
|
Our operating lease is comprised of our office lease and excludes our portion of operating costs.
|
|
U.S. dollars
$
|
British pounds
£
|
Euro
€
|
|||
Cash and cash equivalents
|
3,160,494
|
|
53,612
|
|
21,715
|
|
Accounts payable
|
(1,199,092
|
)
|
(57,909
|
)
|
(135,328
|
)
|
|
1,961,402
|
|
(4,297
|
)
|
(113,613
|
)
|
•
|
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, Canada
|
|
|
March 22, 2013
|
|
Chartered Accountants
|
(a)
|
"Business" means the business currently carried on by Oncolytics, which is the development, testing, marketing and sale of pharmaceutical products together with such additional business as Oncolytics may decide to undertake from time to time;
|
(b)
|
"Commencement Date" means
July 29, 1999
;
|
(c)
|
"Confidential Information" means all confidential information of Oncolytics and includes:
|
(i)
|
any data or information directly or indirectly related to the Business or arising directly or indirectly in the course of, or derived from the Employee's employment with Oncolytics whether related to products, equipment, inventions, ideas, designs, methods, systems, improvements, processes, research or otherwise;
|
(ii)
|
any of Oncolytics' technical or scientific know-how;
|
(iii)
|
financial and sales information, customer lists, pricing policies, lists of suppliers, proprietary computer programs in any format whatsoever, programming techniques, the manner of plans or methods of operation and the like relating to the Business;
|
(iv)
|
patent applications, drawings, blueprints, manuals, letters, notebooks, reports and all other materials (written or otherwise) related to the Business or to the agents, joint venturers or contractors of Oncolytics; and
|
(v)
|
any information provided to or received by Oncolytics on a confidential basis;
|
(d)
|
"Good Reason" means any one of the following events occurring on or after the Commencement Date:
|
(i)
|
any reduction in the Employee's then existing annual base compensation and benefits, unless comparable reductions are made for all other executive employees of Oncolytics;
|
(ii)
|
any material diminution of the Employee's duties, responsibilities, authority or reporting structure, excluding for this purpose an isolated or inadvertent action not taken in bad faith which is remedied by Oncolytics immediately after notice thereof is given by the Employee;
|
(iii)
|
any request that the Employee relocate to a work site that would increase the Employee's one-way commute distance by more than eighty (80) kilometers from the Employee's then principal residence, unless the Employee accepts such relocation opportunity; or
|
(iv)
|
any material breach by Oncolytics of its obligations under this Agreement that is not remedied within thirty (30) days of written notice of such breach from the Employee;
|
(e)
|
"Intellectual Property" means all information, data, designs, processes, software, algorithms and inventions, including those that may be the subject of patent, copyright, industrial design, trademarks, trade secret or other forms of legal protection, made, conceived or developed by the Employee during the term of employment with Oncolytics, whether alone or jointly with others and whether during or after regular working hours, that relates to or in any way pertains to or connects with any matter developed, or under investigation or development by Oncolytics or related to the Business;
|
(f)
|
"Termination Event" means:
|
(i)
|
breach by the Employee of any material provision of this Agreement;
|
(ii)
|
material violation by the Employee of any statutory or common law duty of loyalty to Oncolytics;
|
(iii)
|
the commission of an indictable offence by the Employee against Oncolytics; and
|
(iv)
|
personal or professional conduct of the Employee which in the reasonable and good faith judgment of Oncolytics may significantly injure Oncolytics' Business or interfere with the Employee's job performance.
|
(a)
|
diligently, faithfully and to the best of the Employee's ability; and
|
(b)
|
in the best interests of Oncolytics.
|
(a)
|
is in the public domain at the time of its disclosure, or which, after disclosure, becomes part of the public domain other than by disclosure by the Employee;
|
(b)
|
the Employee can show was in the Employee's possession at the time of disclosure and was not acquired from Oncolytics; or
|
(c)
|
was received by the Employee from a third party without a covenant of confidentiality, provided such third party is under no obligation of confidentiality with respect to the Confidential Information.
|
(a)
|
to assist Oncolytics or its nominee in preparing any necessary copyright and patent applications, including Canadian and foreign applications, covering the Intellectual Property;
|
(b)
|
to sign and deliver all such applications and their assignment to Oncolytics or its nominee; and
|
(c)
|
generally to give all information and testimony, to co-operate with Oncolytics and its solicitors, to sign all lawful papers, and to do all lawful things that may be needed or requested by Oncolytics to obtain, extend, reissue, maintain or enforce Canadian and foreign copyrights or patents covering the Intellectual Property.
|
(d)
|
any breach of this Agreement or unauthorized disclosure of Confidential Information may result in irreparable harm to the Business of Oncolytics and considerable monetary damages to Oncolytics;
|
(e)
|
the damages suffered by Oncolytics may be difficult to establish; and
|
(f)
|
interim and permanent injunctions may be the only suitable remedy for Oncolytics;
|
(a)
|
replace and supercede the Employment Agreement dated July 22, 1999, and all amendments thereto; and
|
(b)
|
enure to the benefit of and be binding upon the parties hereto and:
|
(i)
|
in the case of Oncolytics, its successors and permitted assigns; and
|
(ii)
|
in the case of the Employee, her heirs, executors, administrators or other personal representatives.
|
ONCOLYTICS BIOTECH INC.
|
|
||
|
|
|
|
|
|
/
S/ Brad Thompson
|
|
|
|
Brad Thompson, Ph.D.
Chief Executive Officer
|
|
|
Per:
|
/S/ Kirk Look
|
|
|
|
Kirk Look
Chief Financial Officer
|
(a)
|
commencing with the calendar year 2013 and annually thereafter, pay to the Employee's Registered Retirement Savings Plan, as directed by the Employee, an amount equal to ten (10%) percent of the Employee's annual salary as set out in Section 3(1), not to exceed the annual maximum allowable contribution.
|
A.
|
OBUS and its Affiliates (as defined herein) are engaged in the business of developing pharmaceutical products;
|
B.
|
OBUS has made an offer of part-time employment to the Employee, subject to the terms and conditions contained herein, and the employee has accepted the offer of Employment;
|
(a)
|
”Affiliate” means any entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with a party. For the purposes of this definition, control shall mean: (i) the direct or indirect ownership of fifty percent (50%) or more of the voting stock of a corporation; or (ii) the direct or indirect ownership of fifty (50%) or more of the ownership interest of any other entity; or (iii) the ability to elect a majority of the directors of the entity;
|
(b)
|
"Business" means the business currently carried on by OBUS and its Affiliates, which is the development, testing, marketing and sale of pharmaceutical products together with such additional business as OBUS or its Affiliates may decide to undertake from time to time;
|
(c)
|
"Commencement Date" means September 28, 2012;
|
(d)
|
"Confidential Information" means all confidential information of OBUS and its Affiliates and includes:
|
(i)
|
any data or information directly or indirectly related to the Business or arising directly or indirectly in the course of, or derived from the Employee's employment with OBUS whether related to products, equipment, inventions, ideas, designs, methods, systems, improvements, processes, research or otherwise;
|
(ii)
|
any technical or scientific know-how;
|
(iii)
|
financial and sales information, customer lists, pricing policies, lists of suppliers, proprietary computer programs in any format whatsoever, programming techniques, the manner of plans or methods of operation and the like relating to the Business;
|
(iv)
|
patent applications, drawings, blueprints, manuals, letters, notebooks, reports and all other materials (written or otherwise) related to the Business or to the agents, joint venturers or contractors of OBUS or its Affiliates; and
|
(v)
|
any information provided to or received by OBUS or its Affiliates on a confidential basis;
|
(e)
|
"Intellectual Property" means all information, data, designs, processes, software, algorithms and inventions, including those that may be the subject of patent, copyright, industrial design, trademarks, trade secret or other forms of legal protection, made, conceived or developed by the Employee during the term of employment with OBUS, whether alone or jointly with others and whether during or after regular working hours, that relates to or in any way pertains to or connects with any matter developed, or under investigation or development by OBUS or its Affiliates, or related to the Business;
|
(f)
|
"Termination Event" means:
|
(i)
|
breach by the Employee of any material provision of this Agreement;
|
(ii)
|
material violation by the Employee of any statutory or common law duty of loyalty to OBUS or its Affiliates;
|
(iii)
|
the commission of a criminal offence by the Employee against OBUS or its Affiliates; and
|
(iv)
|
personal or professional conduct of the Employee which in the reasonable and good faith judgment of OBUS may significantly injure OBUS' Business or interfere with the Employee's job performance.
|
(a)
|
diligently, faithfully and to the best of the Employee's ability; and
|
(b)
|
in the best interests of OBUS.
|
(a)
|
is in the public domain at the time of its disclosure, or which, after disclosure, becomes part of the public domain other than by disclosure by the Employee;
|
(b)
|
the Employee can show was in the Employee's possession at the time of disclosure and was not acquired from OBUS or its Affiliates; or
|
(c)
|
was received by the Employee from a third party without a covenant of confidentiality, provided such third party is under no obligation of confidentiality with respect to the Confidential Information.
|
(a)
|
to assist OBUS or its nominee in preparing any necessary copyright and patent applications, including United States and foreign applications, covering the Intellectual Property;
|
(b)
|
to sign and deliver all such applications and their assignment to OBUS or its nominee; and
|
(c)
|
generally to give all information and testimony, to co-operate with OBUS and its solicitors, to sign all lawful papers, and to do all lawful things that may be needed or requested by OBUS to obtain, extend, reissue, maintain or enforce copyrights or patents covering the Intellectual Property.
|
(a)
|
any breach of this Agreement or unauthorized disclosure of Confidential Information may result in irreparable harm to the Business of OBUS or its Affiliates and considerable monetary damages to OBUS and its Affiliates;
|
(b)
|
the damages suffered by OBUS may be difficult to establish; and
|
(c)
|
interim and permanent injunctions may be the only suitable remedy for OBUS;
|
(d)
|
in the case of OBUS, its successors and permitted assigns; and
|
(e)
|
in the case of the Employee, the Employee’s heirs, executors, administrators or other personal representatives.
|
ONCOLYTICS BIOTECH (U.S.), INC.
|
|
|
|
|
|
Per:
|
/S/ Mary Ann Dillahunty
|
|
Mary Ann Dillahunty
President
|
Per:
|
/S/ Kirk Look
|
|
Kirk Look
Chief Financial Officer
|
1.
|
Development and execution of clinical trial and regulatory strategy;
|
2.
|
Oversee drafting of clinical trial protocols, amendments and supporting documents;
|
3.
|
Oversee development and approval of publications, abstracts and conference presentations and posters;
|
4.
|
Support licensing and business development activities;
|
5.
|
Act as a representative of the OBUS for purposes of communication with the U.S. Food and Drug Administration and other regulatory agencies, as needed;
|
6.
|
Select and interact with key opinion leaders and consultants (e.g. scientific advisors, data monitoring boards); and
|
7.
|
Act as a legal representative of, and signing authority for, OBUS
|
Employee Contribution
(% of base salary)
|
Company Match
(% of base salary)
|
||
|
|
||
1
|
%
|
1
|
%
|
2
|
%
|
2
|
%
|
3
|
%
|
3
|
%
|
4
|
%
|
3.50
|
%
|
5% OR GREATER
|
|
4
|
%
|
(a)
|
"Business" means the business currently carried on by Oncolytics, which is the development, testing, marketing and sale of pharmaceutical products together with such additional business as Oncolytics may decide to undertake from time to time;
|
(b)
|
"Commencement Date" means
November 9, 2012
;
|
(c)
|
"Confidential Information" means all confidential information of Oncolytics and includes:
|
(i)
|
any data or information directly or indirectly related to the Business or arising directly or indirectly in the course of, or derived from the Employee's employment with Oncolytics whether related to products, equipment, inventions, ideas, designs, methods, systems, improvements, processes, research or otherwise;
|
(ii)
|
any of Oncolytics' technical or scientific know-how;
|
(iii)
|
financial and sales information, customer lists, pricing policies, lists of suppliers, proprietary computer programs in any format whatsoever, programming techniques, the manner of plans or methods of operation and the like relating to the Business;
|
(iv)
|
patent applications, drawings, blueprints, manuals, letters, notebooks, reports and all other materials (written or otherwise) related to the Business or to the agents, joint venturers or contractors of Oncolytics; and
|
(v)
|
any information provided to or received by Oncolytics on a confidential basis;
|
(d)
|
"Good Reason" means any one of the following events occurring on or after the Commencement Date:
|
(i)
|
any reduction in the Employee's then existing annual base compensation and benefits, unless comparable reductions are made for all other executive employees of Oncolytics;
|
(ii)
|
any material diminution of the Employee's duties, responsibilities, authority or reporting structure, excluding for this purpose an isolated or inadvertent action not taken in bad faith which is remedied by Oncolytics immediately after notice thereof is given by the Employee;
|
(iii)
|
any request that the Employee relocate to a work site that would increase the Employee's one-way commute distance by more than eighty (80) kilometers from the Employee's then principal residence, unless the Employee accepts such relocation opportunity; or
|
(iv)
|
any material breach by Oncolytics of its obligations under this Agreement that is not remedied within thirty (30) days of written notice of such breach from the Employee;
|
(e)
|
"Intellectual Property" means all information, data, designs, processes, software, algorithms and inventions, including those that may be the subject of patent, copyright, industrial design, trademarks, trade secret or other forms of legal protection, made, conceived or developed by the Employee during the term of employment with Oncolytics, whether alone or jointly with others and whether during or after regular working hours, that relates to or in any way pertains to or connects with any matter developed, or under investigation or development by Oncolytics or related to the Business;
|
(f)
|
"Termination Event" means:
|
(i)
|
breach by the Employee of any material provision of this Agreement;
|
(ii)
|
material violation by the Employee of any statutory or common law duty of loyalty to Oncolytics;
|
(iii)
|
the commission of an indictable offence by the Employee against Oncolytics; and
|
(iv)
|
personal or professional conduct of the Employee which in the reasonable and good faith judgment of Oncolytics may significantly injure Oncolytics' Business or interfere with the Employee's job performance.
|
(a)
|
diligently, faithfully and to the best of the Employee's ability; and
|
(b)
|
in the best interests of Oncolytics.
|
(a)
|
is in the public domain at the time of its disclosure, or which, after disclosure, becomes part of the public domain other than by disclosure by the Employee;
|
(b)
|
the Employee can show was in the Employee's possession at the time of disclosure and was not acquired from Oncolytics; or
|
(c)
|
was received by the Employee from a third party without a covenant of confidentiality, provided such third party is under no obligation of confidentiality with respect to the Confidential Information.
|
(a)
|
to assist Oncolytics or its nominee in preparing any necessary copyright and patent applications, including Canadian and foreign applications, covering the Intellectual Property;
|
(b)
|
to sign and deliver all such applications and their assignment to Oncolytics or its nominee; and
|
(c)
|
generally to give all information and testimony, to co-operate with Oncolytics and its solicitors, to sign all lawful papers, and to do all lawful things that may be needed or requested by Oncolytics to obtain, extend, reissue, maintain or enforce Canadian and foreign copyrights or patents covering the Intellectual Property.
|
(d)
|
any breach of this Agreement or unauthorized disclosure of Confidential Information may result in irreparable harm to the Business of Oncolytics and considerable monetary damages to Oncolytics;
|
(e)
|
the damages suffered by Oncolytics may be difficult to establish; and
|
(f)
|
interim and permanent injunctions may be the only suitable remedy for Oncolytics;
|
(a)
|
replace and supercede the Employment Agreement dated November 9, 2012, and all amendments thereto; and
|
(ii)
|
in the case of the Employee, her heirs, executors, administrators or other personal representatives.
|
ONCOLYTICS BIOTECH INC.
|
|
||
|
|
|
|
|
Per:
|
/S/ Brad Thompson
|
|
|
|
Brad Thompson, Ph.D.
Chief Executive Officer
|
|
|
Per:
|
/S/ Matthew Coffey
|
|
|
|
Matthew Coffey
Chief Operating Officer, Director
|
(a)
|
commencing with the calendar year 2013 and annually thereafter, pay to the Employee's Registered Retirement Savings Plan, as directed by the Employee, an amount equal to ten (10%) percent of the Employee's annual salary as set out in Section 3(1), not to exceed the annual maximum allowable contribution.
|
(a)
|
"Business" means the business currently carried on by Oncolytics, which is the development, testing, marketing and sale of pharmaceutical products together with such additional business as Oncolytics may decide to undertake from time to time;
|
(b)
|
"Commencement Date" means July 22, 1999;
|
(c)
|
"Confidential Information" means all confidential information of Oncolytics and includes:
|
(i)
|
any data or information directly or indirectly related to the Business or arising directly or indirectly in the course of, or derived from the Employee's employment with Oncolytics whether related to products, equipment, inventions, ideas, designs, methods, systems, improvements, processes, research or otherwise;
|
(ii)
|
any of Oncolytics' technical or scientific know-how;
|
(iii)
|
financial and sales information, customer lists, pricing policies, lists of suppliers, proprietary computer programs in any format whatsoever, programming techniques, the manner of plans or methods of operation and the like relating to the Business;
|
(iv)
|
patent applications, drawings, blueprints, manuals, letters, notebooks, reports and all other materials (written or otherwise) related to the Business or to the agents, joint venturers or contractors of Oncolytics; and
|
(v)
|
any information provided to or received by Oncolytics on a confidential basis;
|
(d)
|
"Good Reason" means any one of the following events occurring on or after the Commencement Date:
|
(i)
|
any reduction in the Employee's then existing annual base compensation and benefits, unless comparable reductions are made for all other executive employees of Oncolytics;
|
(ii)
|
any material diminution of the Employee's duties, responsibilities, authority or reporting structure, excluding for this purpose an isolated or inadvertent action not taken in bad faith which is remedied by Oncolytics immediately after notice thereof is given by the Employee;
|
(iii)
|
any request that the Employee relocate to a work site that would increase the Employee's one-way commute distance by more than eighty (80) kilometers from the Employee's then principal residence, unless the Employee accepts such relocation opportunity; or
|
(iv)
|
any material breach by Oncolytics of its obligations under this Agreement that is not remedied within thirty (30) days of written notice of such breach from the Employee;
|
(e)
|
"Intellectual Property" means all information, data, designs, processes, software, algorithms and inventions, including those that may be the subject of patent, copyright, industrial design, trademarks, trade secret or other forms of legal protection, made, conceived or developed by the Employee during the term of employment with Oncolytics, whether alone or jointly with others and whether during or after regular working hours, that relates to or in any way pertains to or connects with any matter developed, or under investigation or development by Oncolytics or related to the Business;
|
(f)
|
"Termination Event" means:
|
(i)
|
breach by the Employee of any material provision of this Agreement;
|
(ii)
|
material violation by the Employee of any statutory or common law duty of loyalty to Oncolytics;
|
(iii)
|
the commission of an indictable offence by the Employee against Oncolytics; and
|
(iv)
|
personal or professional conduct of the Employee which in the reasonable and good faith judgment of Oncolytics may significantly injure Oncolytics' Business or interfere with the Employee's job performance.
|
(a)
|
diligently, faithfully and to the best of the Employee's ability; and
|
(b)
|
in the best interests of Oncolytics.
|
(a)
|
is in the public domain at the time of its disclosure, or which, after disclosure, becomes part of the public domain other than by disclosure by the Employee;
|
(b)
|
the Employee can show was in the Employee's possession at the time of disclosure and was not acquired from Oncolytics; or
|
(c)
|
was received by the Employee from a third party without a covenant of confidentiality, provided such third party is under no obligation of confidentiality with respect to the Confidential Information.
|
(a)
|
to assist Oncolytics or its nominee in preparing any necessary copyright and patent applications, including Canadian and foreign applications, covering the Intellectual Property;
|
(b)
|
to sign and deliver all such applications and their assignment to Oncolytics or its nominee; and
|
(c)
|
generally to give all information and testimony, to co-operate with Oncolytics and its solicitors, to sign all lawful papers, and to do all lawful things that may be needed or requested by Oncolytics to obtain, extend, reissue, maintain or enforce Canadian and foreign copyrights or patents covering the Intellectual Property.
|
(d)
|
any breach of this Agreement or unauthorized disclosure of Confidential Information may result in irreparable harm to the Business of Oncolytics and considerable monetary damages to Oncolytics;
|
(e)
|
the damages suffered by Oncolytics may be difficult to establish; and
|
(f)
|
interim and permanent injunctions may be the only suitable remedy for Oncolytics;
|
(a)
|
replace and supercede the Employment Agreement dated July 22, 1999, and all amendments thereto; and
|
(b)
|
enure to the benefit of and be binding upon the parties hereto and:
|
(i)
|
in the case of Oncolytics, its successors and permitted assigns; and
|
(ii)
|
in the case of the Employee, her heirs, executors, administrators or other personal representatives.
|
ONCOLYTICS BIOTECH INC.
|
|
||
|
|
|
|
|
Per:
|
/S/ Kirk Look
|
|
|
|
Kirk Look
Chief Financial Officer
|
|
|
Per:
|
/S/ Matthew Coffey
|
|
|
|
Matthew Coffey
Chief Operating Officer, Director
|
(a)
|
annually, pay to the Employee's Registered Retirement Savings Plan, as directed by the Employee, an amount equal to ten (10%) percent of the Employee's annual salary as set out in Section 3(1), not to exceed the annual maximum allowable contribution.
|
Name
|
Jurisdiction
|
Oncolytics Biotech (Barbados) Inc.
|
Barbados
|
Oncolytics Biotech (US) Inc.
|
Delaware
|
Oncolytics Biotech (U.K.) Inc.
|
England and Wales
|
Valens Pharma Ltd.
|
Alberta
|
1.
|
I have reviewed this annual report on Form 20-F of Oncolytics Biotech Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and
|
5.
|
The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.
|
Date:
|
March 22, 2013
|
|
/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
|
5.
|
The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.
|
Date:
|
March 22, 2013
|
|
/s/ Kirk Look
|
|
|
|
Kirk Look, CA
Chief Financial Officer
Principal Accounting and Financial Officer
|