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, 2016
|
|
|
|
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:
|
|
|
|
|
Large accelerated filer
o
|
Accelerated filer
o
|
Non-accelerated filer
x
|
US GAAP
|
International Financial Reporting Standards as issued by the International Accounting Standards Board
|
Other
|
o
|
x
|
o
|
F1 - F24
|
•
|
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;
|
•
|
risks related to information technology systems; and
|
•
|
risks related to our common shares.
|
|
Canadian Dollars Per One US Dollar
|
||||
|
2016
|
2015
|
2014
|
2013
|
2012
|
Average for the period
|
1.3248
|
1.2787
|
1.1045
|
1.0299
|
0.9996
|
A.
|
Selected Financial Data
|
|
2016
|
2015
|
2014
|
2013
|
2012
|
|||||
|
$
|
$
|
$
|
$
|
$
|
|||||
Revenues
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Net loss
(1)
|
(15,139,979
|
)
|
(13,722,995
|
)
|
(18,619,335
|
)
|
(23,532,647
|
)
|
(36,373,521
|
)
|
Net comprehensive loss
|
(15,346,897
|
)
|
(13,242,060
|
)
|
(18,418,990
|
)
|
(23,395,834
|
)
|
(36,313,135
|
)
|
Basic and diluted loss per share
(2)
|
(0.13
|
)
|
(0.12
|
)
|
(0.21
|
)
|
(0.28
|
)
|
(0.48
|
)
|
Total assets
(2)
|
14,758,284
|
|
27,383,798
|
|
17,193,190
|
|
28,222,027
|
|
22,078,090
|
|
Shareholders’ equity
(2)
|
10,689,620
|
|
24,674,306
|
|
13,819,193
|
|
22,213,366
|
|
14,786,780
|
|
Cash dividends declared per share
(3)
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Weighted average number of common shares outstanding
|
119,880,200
|
|
112,613,845
|
|
87,869,149
|
|
83,530,981
|
|
76,102,062
|
|
1)
|
Included in net loss and net loss per share for the year ended December 31,
2016
are share based payment expenses of
$406,078
(
2015
-
$429,537
;
2014
-
$980,325
;
2013
-
$424,384
;
2012
-
$730,751
).
|
2)
|
We issued
3,106,600
common shares for net cash proceeds of
$956,133
in
2016
(
2015
-
24,639,128
common shares for net cash proceeds of
$23,667,654
;
2014
-
8,708,676
common shares for net cash proceeds of
$9,044,492
;
2013
-
8,093,533
common shares for net cash proceeds of
$30,398,036
;
2012
-
5,458,950
common shares for net cash proceeds of
20,848,785
).
|
3)
|
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; and
|
•
|
distribution or use restrictions imposed by regulatory authorities.
|
A.
|
History and Development of the Company
|
B.
|
Business Overview
|
•
|
Pelareorep has anticancer effects in models of metastatic cancers that can prolong survival in these models when using immuno-competent rodents.
|
•
|
The survival benefit in animal models can be enhanced when pelareorep is given in combination with chemotherapy, immunotherapy (e.g., checkpoint inhibitors, IMiDs, rituximab, etc.) or radiotherapy.
|
•
|
A toxic dose of reovirus T3D has not been reached/established in animal models and infection presents with minimal side-effects.
|
•
|
More than 1,400 patients have been enrolled in clinical studies conducted in the US, Canada and EU. Of these, more than 1,000 patients received pelareorep, with over 930 via intravenous (IV) administration and over 90 by intratumoral injections (ITu). The remaining patients were randomized to control arms.
|
•
|
Pelareorep has been administered as single or multiple doses (intratumoral or intravenous), either as a mono-therapy or in combination with chemotherapy, immunotherapy (e.g., checkpoint inhibitors), and radiotherapy.
|
•
|
No Maximum Tolerated Dose (MTD) for intravenous pelareorep as mono-therapy was defined in the two Phase 1 trials (REO 004 and 005). Dose-limiting toxicities (DLTs) were seen in some of the combination trials with pelareorep and chemotherapy, which generally enrolled heavily pre-treated patients.
|
•
|
When combined with chemotherapeutic agents, pelareorep does not appear to enhance either the frequency or severity of the adverse effects of the chemotherapeutic agents.
|
•
|
Selective viral replication in permissive cancer cells which leads to tumor cell lysis.
|
•
|
Activation of innate immunity in response to the infection which results in a cascade of chemokines/cytokines causing natural killer (NK) cells to be activated and attack cancer cells.
|
•
|
A specific adaptive immune response triggered by tumor- and viral-associated antigens displayed by antigen-presenting cells (APCs, infected tumor cells and/or dendritic cells) to T cells.
|
1.
|
Direct cell lysis - Reovirus Replication in Permissive Cancer Cells
|
2.
|
Induction of Innate Immunity
|
3.
|
Induction of Adaptive Immunity
|
1.
|
Direct tumour lysis
- Our primary focus has been on the investigation of chemotherapy combination clinical trials investigating the use of different chemotherapy agents in various cancer indications. In 2016, we reported preliminary clinical data from our Randomized Clinical Program which includes the clinical trial collaborations with the Canadian Cancer Trials Group (CCTG, formerly known as the National Cancer Institute of Canada) and the US National Institute of Cancer (NCI). The clinical data reported in 2016 from the CCTG studies showed little to no difference in progression free survival (the primary endpoint) between the test and control arms. However, preliminary survival data reported suggests a potential survival benefit in female patients with colorectal cancer and lung patients with TP53 or EGFR mutations. As well, survival data reported from our NCI pancreatic trial suggests a long term survival benefit when comparing test and control arms at 24 months.
|
2.
|
Activation of innate immunity
- Our second pathway focuses on the potential of REOLYSIN to stimulate a patient's innate immunity and the potential for an infection to cause a cascade of chemokines/cytokines activating natural killer (NK) cells to attack cancer cells. In 2016, we looked to enter into research collaborations that would combine REOLSYIN with immune modulator therapies (IMiDs).
|
3.
|
Activation of adaptive immunity
- Our third pathway focuses on the potential for REOLSYIN to cause a specific adaptive immune response triggered by tumor- and viral-associated antigens displayed by antigen-presenting cells (APCs, infected tumor cells and/or dendritic cells) to T cells. In 2016, we commenced our first checkpoint inhibitor clinical trial that investigated the combination of REOLYSIN with pembrolizumab (Keytruda®).
|
•
|
Develop REOLYSIN through our clinical development plan 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 1 Clinical Trials)
- Pharmacological studies are designed to assess the potential harmful or other side effects that an individual receiving the therapeutic compound may experience. These studies, usually short in duration, are often conducted with healthy volunteers or actual patients and use up to the maximum expected therapeutic dose.
|
•
|
Therapeutic Studies
(or Phase 2 and 3 Clinical Trials) - Therapeutic studies are designed primarily to determine the appropriate manner for administering a drug to produce a preventive action or a significant beneficial effect against a disease. These studies are conducted using actual patients with the condition that the therapeutic is designed to remedy. Prior to initiating these studies, the organization sponsoring the program is required to satisfy a number of requirements via the submission of documentation to support the approval for a clinical trial.
|
•
|
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
$
|
|||||
Capital lease obligations
|
Nil
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Operating lease
(1)
|
517,647
|
|
163,978
|
|
207,026
|
|
146,643
|
|
—
|
|
Purchase obligations
|
1,033,619
|
|
1,033,619
|
|
—
|
|
—
|
|
—
|
|
Other long term obligations
|
Nil
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Total contractual obligations
|
1,551,266
|
|
1,197,597
|
|
207,026
|
|
146,643
|
|
—
|
|
(1)
|
Our operating leases are comprised of our office leases and exclude our portion of operating costs.
|
G.
|
Safe Harbor
|
A.
|
Directors and Senior Management
|
Name and Place of Residence
|
Position with the Company
|
Principal Occupation
|
Director of the Company Since
|
Matthew C. Coffey, Ph.D.
(1)
Alberta, Canada
|
Interim Chief Executive Officer and Director
|
Interim Chief Executive Officer of the Company since November 2016. Chief Operating Officer of the Company from 2008 to November 2016. From 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
|
Name and Place of Residence
|
Position with the Company
|
Principal Occupation
|
Director of the Company Since
|
George M. Gill, M.D.
Maryland, USA |
Senior Vice President, Regulatory Affairs & Chief Safety Officer
|
Prior to taking on the role of Senior Vice President, Regulatory Affairs & Chief Safety Officer, Dr. Gill held senior positions in clinical research and regulatory affairs in the pharmaceutical and biotechnology industries. From 1992-2000 he was VP of Clinical Research with Ligand Pharmaceuticals after serving as head of US Clinical Research with ICI (now AstraZeneca) Prior to that he was VP and Head of World-wide Regulatory Affairs for Bristol-Myers Squibb. He previously was head of Oncology Clinical Research at 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. He began his career as an academic pediatric oncologist at Childrens Hospital of Philadelphia and Boston Childrens Hospital.
|
N/A
|
Andres A. Gutierrez, M.D., Ph.D.
New Jersey, USA
|
Chief Medical Officer
|
Prior to taking on the role of Chief Medical Officer, Dr. Gutierrez held progressively senior clinical development positions designing and implementing both early and later-stage oncology clinical studies at a range of U.S. and European companies including Sellas Life Sciences Group, Bristol-Myers Squibb, Sunesis Pharmaceuticals Inc., Biomarin Pharmaceutical Inc., Proteolix and Oculus Innovative Sciences. Prior to that, he held a series of academic and consulting positions. He received his MD and a PhD in Biomedical Sciences from the National Autonomous University of Mexico.
|
N/A
|
Angela Holtham, FCPA, FCMA, ICD.D
(2)(3)
Ontario, Canada
|
Director
|
After 8 years as the Vice President Finance and Chief Financial Officer of The Hospital for Sick Children (SickKids) in Toronto, Ms. Holtham now holds a number of Board and Audit Committee governance positions in both the public and private sectors in Canada including IBI Group Inc., the Ontario Financing Authority and Plexxus (Hospital Administrative Services).
Prior to her position at SickKids, Angela held a number of senior positions in both the for-profit and not-for-profit sectors, including 20 years with Nabisco Canada, the last 5 as Senior Vice President and Chief Financial Officer.
|
June 18, 2014
|
Name and Place of Residence
|
Position with the Company
|
Principal Occupation
|
Director of the Company Since
|
J. Mark Lievonen, CM, FCPA, FCA, LLD
(2)(4)
Ontario, Canada
|
Director
|
Former president of Sanofi Pasteur Limited, a vaccine development, manufacturing and marketing company. Mr. Lievonen has served on a number of industry and not-for-profit boards including Rx&D, BIOTECanada, the Public Policy Forum, the Ontario Institute for Cancer Research, York University and Markham Stouffville Hospital, and is a past Chair of Rx&D, BIOTECanada, the Ontario Genomics Institute, and the Markham Stouffville Hospital Foundation.
|
April 5, 2004
|
Kirk J. Look, CA
Alberta, Canada
|
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
|
Wayne Pisano, MBA
(2)(3)(6)
New Jersey, USA
|
Chair of the Board
|
Mr. Pisano has more than 30 years of experience as a pharmaceutical industry executive and was recognized in 2010 as Pharma Executive of the Year by the World Vaccine Congress. Mr. Pisano is the former president and Chief Executive Officer of Sanofi Pasteur, one of the largest vaccine companies in the world. After retiring from Sanofi Pasteur in 2011, he served as the president and Chief Executive Officer of VaxInnate a privately held biotech company until November 2016. Prior to joining Sanofi Pasteur, he spent 11 years with Novartis (formerly Sandoz). He has a bachelor’s degree in biology from St. John Fisher College, Rochester NY and an MBA from the University of Dayton, Ohio.
|
May 9, 2013
|
William G. Rice, Ph.D.
(4)(5)
California, USA
|
Director
|
Chairman, President and Chief Executive Officer of Aptose Biosciences Inc. since 2013; from 2003 to present, Chairman, President and Chief Executive Officer of Cylene Pharmaceuticals Inc.; former Senior Scientist and Head of the Drug Mechanism Laboratory at the National Cancer Institute-Frederick Cancer Research and Development Center; former faculty member in the division of Pediatric Hematology and Oncology at Emory University School of Medicine.
|
June 8, 2015
|
Name and Place of Residence
|
Position with the Company
|
Principal Occupation
|
Director of the Company Since
|
Bernd R. Seizinger, M.D., Ph.D.
(3)(5)
New Jersey, USA and Munich, Germany
|
Director
|
Chairman of Oxford BioTherapeutics Limited since 2016; Chairman of Aprea Therapeutics AB since 2015; Executive Chairman of CrytpoMedix Inc. since 2015; Chairman of Opsona from 2009-2016; President and CEO of GPC Biotech from 1998-2009; former VP of Oncology Drug Discovery and VP of Corporate and Academic Alliances at Bristol-Myers Squibb; Senior Faculty Member of Harvard Medical School and Massachusetts General Hospital.
|
June 8, 2015
|
Alan J Tuchman, M.D., MBA (FAAN),
New York, USA
|
Chief Neuro Oncology Research 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)
|
Mr. Coffey was appointed President and Chief Executive Officer on January 19, 2017.
|
2)
|
Member of the Audit Committee. Ms. Holtham is Chair of this Committee.
|
3)
|
Member of the Compensation Committee. Mr. Pisano is Chair of this Committee.
|
4)
|
Member of the Governance Committee. Mr. Lievonen is Chair of this Committee.
|
5)
|
Member of the Science and Technology Committee. Dr.'s Rice and Seizinger serve as Co-Chairs of this Committee.
|
6)
|
Mr. Pisano, as Chair of the Board, serves as an ex-officio member of the Governance and Science and Technology Committees.
|
B.
|
Compensation
|
Name
|
Fees Earned
($)
(1)
|
Share-
Based Awards
($)
(2)
|
Option-
Based Awards
($)
(2)
|
Non-Equity Incentive Plan Compensation
($)
|
Pension Value
($)
|
All Other Compensation
($)
|
Total
($)
|
Jim Dinning
(3)
|
15,000
|
Nil
|
Nil
|
Nil
|
N/A
|
Nil
|
15,000
|
Angela Holtham
|
80,457
|
26,263
|
Nil
|
Nil
|
N/A
|
Nil
|
106,720
|
Mark Lievonen
|
72,922
|
26,263
|
Nil
|
Nil
|
N/A
|
Nil
|
99,185
|
Wayne Pisano
|
75,422
|
50,691
|
Nil
|
Nil
|
N/A
|
Nil
|
126,113
|
William Rice
|
71,672
|
26,263
|
Nil
|
Nil
|
N/A
|
Nil
|
97,935
|
Bob Schultz
(4)
|
18,955
|
Nil
|
Nil
|
Nil
|
N/A
|
Nil
|
18,955
|
Bernd Seizinger
|
57,337
|
40,169
|
Nil
|
Nil
|
N/A
|
Nil
|
97,506
|
(1)
|
Directors are paid fees in US Dollars. These amounts are presented in Canadian dollars and have been converted at a US/CDN exchange rate of $1.3427.
|
(2)
|
The value of share based and option based awards are based on the grant date assumptions as disclosed in note 8 "
Share Based Payments"
in our
2016
audited consolidated financial statements.
|
(3)
|
Mr. Dinning resigned as a director on March 10, 2016. Amounts reflect compensation received by Mr. Dinning prior to his resignation.
|
(4)
|
Mr. Schultz did not stand for re-election to the Board at the annual general meeting of the Company held on May 5, 2016. Amounts reflect compensation received by Mr. Schultz prior to this date.
|
Name and principal position
|
Year
|
Salary
$ |
Share-
based awards $ (1) |
Option-
based
awards
$
(1)
|
Bonus
$
|
Non-equity incentive
plan compensation $ |
Pension value
$ |
All other compensation
$ (2) |
Total
compensation
$
|
|
|
|
|
|
|
|
|
|
|
Dr. Matthew C. Coffey
(3)(4)
|
2016
|
406,714
|
125,400
|
—
|
101,678
|
N/A
|
N/A
|
59,674
|
693,466
|
Interim Chief Executive
|
2015
|
380,107
|
N/A
|
173,307
|
79,822
|
N/A
|
N/A
|
57,039
|
690,275
|
Officer and Chief Operating Officer
|
2014
|
370,475
|
N/A
|
—
|
—
|
N/A
|
N/A
|
54,950
|
425,425
|
|
|
|
|
|
|
|
|
|
|
Dr. Bradley G.
|
2016
|
519,401
|
N/A
|
—
|
—
|
N/A
|
N/A
|
1,402,387
|
1,921,788
|
Thompson
(3)(4)
|
2015
|
551,937
|
N/A
|
287,113
|
154,542
|
N/A
|
N/A
|
71,215
|
1,064,807
|
Former Chief Executive Officer
|
2014
|
537,950
|
N/A
|
—
|
—
|
N/A
|
N/A
|
69,029
|
606,979
|
|
|
|
|
|
|
|
|
|
|
Kirk J. Look
|
2016
|
325,584
|
79,800
|
—
|
81,396
|
N/A
|
N/A
|
52,981
|
539,761
|
Chief Financial Officer
|
2015
|
319,200
|
N/A
|
109,556
|
67,032
|
N/A
|
N/A
|
52,014
|
547,802
|
|
2014
|
284,200
|
N/A
|
—
|
—
|
N/A
|
N/A
|
48,466
|
332,666
|
|
|
|
|
|
|
|
|
|
|
Dr. Andres A.
|
2016
|
68,684
|
78,000
|
23,285
|
—
|
N/A
|
N/A
|
6,354
|
176,323
|
Gutierrez
(5)(6)
|
2015
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
Chief Medical Officer
|
2014
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
|
|
|
|
|
|
|
|
|
|
Dr. George Gill
(6)
|
2016
|
455,028
|
N/A
|
—
|
—
|
N/A
|
N/A
|
42,090
|
497,118
|
Senior Vice President,
|
2015
|
438,371
|
N/A
|
81,695
|
61,371
|
N/A
|
N/A
|
40,549
|
621,986
|
Regulatory Affairs & Chief Safety Officer
|
2014
|
367,452
|
N/A
|
—
|
—
|
N/A
|
N/A
|
33,990
|
401,442
|
|
|
|
|
|
|
|
|
|
|
Dr. Alan J. Tuchman
(6)(7)
|
2016
|
210,722
|
N/A
|
—
|
—
|
N/A
|
N/A
|
19,492
|
230,214
|
Chief Neuro Oncology
|
2015
|
202,990
|
N/A
|
37,906
|
28,418
|
N/A
|
N/A
|
18,777
|
288,091
|
Research Officer
|
2014
|
165,825
|
N/A
|
—
|
—
|
N/A
|
N/A
|
15,339
|
181,164
|
(1)
|
The value of share and option based awards are based on the grant date assumptions as disclosed in note 8 "
Share Based Payments"
in our
2016
audited consolidated financial statements.
|
(2)
|
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. With regards to Dr. Thompson, the amount also includes a retirement allowance of $1,330,828, which will be paid over twelve months beginning December 2016.
|
(3)
|
On November 2, 2016, Dr. Thompson resigned as President and Chief Executive Officer and Dr. Coffey was appointed Interim President and Chief Executive Officer. Dr. Coffey was appointed President and Chief Executive Officer on January 19, 2017.
|
(4)
|
None of the compensation paid to Dr. Thompson and Dr. Coffey related to their roles as directors of the Company.
|
(5)
|
Dr. Gutierrez was appointed Chief Medical Officer of the Company on October 31, 2016.
|
(6)
|
US Employees are paid salaries, bonuses and other compensation in US Dollars. These amounts are presented in Canadian dollars and have been converted at a US/CDN exchange rate of $1.3427, 1.3840 and $1.1601 for the years 2016, 2015 and 2014, respectively.
|
(7)
|
Dr. Tuchman was formerly the Senior VP, Medical and Clinical Affairs of the Company. Dr. Tuchman became the Chief Neuro Oncology Research Officer of the Company on October 31, 2016.
|
Name and principal position
|
Year
|
Salary
$
|
|
|
|
|
|
Dr. Matthew C. Coffey
|
2017
|
430,000
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
Kirk J. Look, C.A.
|
2017
|
345,000
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
Dr. Andres A. Gutierrez
(1)
|
2017
|
300,000
|
|
Chief Medical Officer
|
|
|
|
|
|
|
|
Dr. George Gill, MD
(1)
|
2017
|
338,890
|
|
Senior Vice President, Regulatory Affairs and Chief Safety Officer
|
|
|
|
|
|
|
|
Dr. Alan J Tuchman, MD, MBA (FAAN)
(1)
|
2017
|
156,939
|
|
Chief Neuro Oncology Research Officer
|
|
|
Name
|
Termination without Cause Severance
(1)
$
|
Change of Control Severance
(2)
$
|
||
|
|
|
||
Dr. Matthew C. Coffey
Chief Executive Officer |
492,235
|
|
984,470
|
|
|
|
|
||
Kirk J. Look, C.A.
Chief Financial Officer |
400,223
|
|
800,445
|
|
|
|
|
||
Dr. Andres A. Gutierrez
(3)
Chief Medical Officer |
328,500
|
|
657,000
|
|
|
|
|
||
Dr. George Gill, MD
(3)
Senior Vice President, Clinical and Regulatory Affairs
|
370,987
|
|
741,974
|
|
|
|
|
||
Dr. Alan J Tuchman, MD, MBA (FAAN)
(3)
Chief Neuro Oncology Officer
|
172,206
|
|
344,412
|
|
(1)
|
As at December 31,
2016
, all options granted to Officers had fully vested except for the options granted on December 1, 2015 and November 10, 2016. 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 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 90th day after the date such Officer is terminated.
|
(3)
|
US Employees are paid in US Dollars and are presented in US dollars.
|
C.
|
Board Practices
|
Name and Place of Residence
|
Position with the Corporation
|
Director of the Corporation Since
|
Date of Expiration of Current Term of Office
|
Matthew C. Coffey Ph.D
Alberta, Canada
|
President and Chief Executive Officer and Director
|
May 11, 2011
|
Date of 2017 Annual General Meeting of the Shareholders
|
Angela Holtham
FCPA, FCMA, ICD.D
Ontario, Canada
|
Director
|
June 18, 2014
|
Date of 2017 Annual General Meeting of the Shareholders
|
J. Mark Lievonen, CM, FCPA, FCA, LLD
Ontario, Canada
|
Director
|
April 5, 2004
|
Date of 2017 Annual General Meeting of the Shareholders
|
Wayne Pisano, MBA
New Jersey, USA
|
Chair and Director
|
May 9, 2013
|
Date of 2017 Annual General Meeting of the Shareholders
|
William G. Rice, Ph.D.
California, USA
|
Director
|
June 8, 2015
|
Date of 2017 Annual General Meeting of the Shareholders
|
Bernd R. Seizinger, M.D., Ph.D.
New Jersey, USA and Munich Germany
|
Director
|
June 8, 2015
|
Date of 2017 Annual General Meeting of the Shareholders
|
1.
|
Policy Statement
|
2.
|
Composition of Committee
|
(a)
|
The Committee shall consist of a minimum of three (3) directors. The Board shall appoint the members (“Members”) of the Committee and may seek the advice and assistance of the Governance 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 be independent of management and to act with a view to the best interests of the Corporation, including, but not limited to the source of compensation of such director, including any consulting, advisory or other compensatory fee paid by the Corporation to such director and whether such director is affiliated with the Corporation, a subsidiary of the Corporation or an affiliate of a subsidiary 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. The Members will be appointed to hold office until the next annual general meeting of shareholders or until their successors are appointed. The Board may remove a Member at any time and may fill any vacancy occurring on the Committee. A Member may resign at any time and a Member will automatically cease to be a Member upon ceasing to be a director.
|
(e)
|
The Chair of the Board shall be an ex officio Member of the committee.
|
3.
|
Meetings of the Committee
|
(a)
|
The Committee shall meet 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. The CEO shall attend each meeting of the Committee 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. If the Board has appointed a Corporate Secretary, the Corporate Secretary shall be the secretary of the meeting. If the Board has not appointed a Corporate Secretary, the Members of the Committee shall choose one of the persons present to be the secretary of the meeting or may have another person who is not a Member of the Committee present to record the minutes 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. Minutes of the meetings of the Committee shall be distributed to members of the Committee, to other members of the Board and, with the exception of “
in camera
” items, to the Chief Executive Officer and Chief Financial Officer.
|
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 the CEO’s 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)
|
annually, review and make a recommendation to the Board regarding the compensation of the Board of Directors;
|
(xiii)
|
as determined in the sole discretion of the Committee, retain independent advice in respect of human resources and compensation matters from a compensation consultant, legal counsel or other advisor (the “Advisor”) and, if deemed necessary by the Committee, meet separately with the Advisor; the Committee shall be directly responsible for the appointment, compensation and oversight of the work of the Advisor retained by the Committee;
|
(xiv)
|
select, or receive advice from, an Advisor to the Committee, other than in-house legal counsel, after taking into consideration the following factors:
|
(i)
|
the provision of other services to the Corporation by the entity that employs the Advisor ;
|
(ii)
|
the amount of fees received from the Corporation by the entity that employs the Advisor, as a percentage of the total revenue of the entity that employs the Advisor;
|
(iii)
|
the policies and procedures of the entity that employs the Advisor that are designed to prevent conflicts of interest;
|
(iv)
|
any business or personal relationship of the Advisor with a member of the Board;
|
(v)
|
any stock of the Corporation owned by the Advisor; and
|
(vi)
|
any business or personal relationship of the Advisor or the entity employing the Advisor with an executive officer of the Corporation;
|
(xv)
|
review and consider the implications of the risks associated with the Corporation’s compensation policies and practices, specifically, situations that could potentially encourage an insider to expose the Corporation to inappropriate or excessive risks; and
|
(xvi)
|
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 for the Corporation’s human resources development, performance evaluation, compensation and succession planning programs are in place and operating effectively.
|
(e)
|
The Committee shall assess, on an annual basis, the adequacy of this Mandate and the performance of the Committee.
|
5.
|
Reporting
|
6.
|
External Advisors
|
7.
|
Date of Mandate
|
1.
|
Policy Statement
|
2.
|
Composition of the Committee
|
(a)
|
The Audit Committee shall consist of a minimum of three (3) directors. The Board shall appoint the members (“Members”) of the Audit Committee and may seek the advice and assistance of the Governance Committee in identifying qualified candidates. The Board shall appoint one Member of the Audit Committee to be the Chair
|
(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.
|
(f)
|
Each Member of the Audit Committee shall be appointed by the Board annually at the next scheduled meeting of the Board following the AGM. The Members will be appointed to hold office until the next annual general meeting of shareholders or until their successors are appointed. The Board may remove a Member at any time and may fill any vacancy occurring on the Audit Committee. A Member may resign at any time and a Member will automatically cease to be a Member upon ceasing to be a director.
|
(g)
|
The Chair of the Board shall be an ex officio Member of the committee.
|
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. If the Board has appointed a Corporate Secretary, the Corporate Secretary shall be the secretary of the meeting. If the Board has not appointed a Corporate Secretary, the Members
|
(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)
|
The Chief Executive Officer and the Chief Financial Officer shall each attend meetings of the Audit Committee when requested to do so by a Member of the Audit Committee.
|
(i)
|
Minutes shall be kept of all meetings of the Audit Committee and shall be signed by the Chair and the secretary of the meeting. Minutes of the meetings of the Audit Committee shall be distributed to Members of the Audit Committee, to other members of the Board and, with the exception of “
in camera
” items, to the Chief Executive Officer and Chief Financial Officer.
|
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 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. The Audit Committee shall keep the Board apprised of both the selection of experts and the expert’s findings through the Audit Committee’s regular reports to the Board;
|
(iv)
|
communicate directly with the external auditors; and
|
(v)
|
set and pay the compensation for (A) 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, (b) any advisors employed by the Audit Committee, and (C) 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
|
(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 considered the “Quarterly Financial Reports”) and recommend the Quarterly Financial Reports to the Board for approval by the Board before release to the public;
|
(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;
|
(ii)
|
recommend the nomination of the external auditors to the Board for appointment by the shareholders at the Corporation’s annual general meeting;
|
(iii)
|
recommend the discharge of the external auditor when circumstances warrant;
|
(iv)
|
monitor the rotation of the audit partner of the external auditors as required by applicable law or regulations;
|
(v)
|
consider the recommendations of management in respect of the appointment of the external auditors;
|
(vi)
|
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;
|
(vii)
|
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;
|
(viii)
|
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
|
(ix)
|
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 review the Corporation’s accounting and reporting of revenues, costs, liabilities and contingencies.
|
(h)
|
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.
|
(i)
|
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.
|
(j)
|
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.
|
(k)
|
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.
|
(l)
|
The Audit Committee, through the Chair, shall receive notice from management of any instance of non-trivial fraud or other failure or weakness of the control system promptly upon management becoming aware of such.
|
(m)
|
The Audit Committee shall review and approve the signing authority for the Corporation at least annually or when a change is required.
|
(n)
|
The Audit Committee shall assess, on an annual basis, the adequacy of this Mandate and the performance of the Audit Committee.
|
5.
|
Reporting
|
6.
|
Date of Mandate
|
D.
|
Employees
|
Activity
|
2016
|
2015
|
2014
|
Research and development
|
12
|
12
|
13
|
Operating
|
9
|
9
|
9
|
Total
|
21
|
21
|
22
|
Geographic location
|
2016
|
2015
|
2014
|
Canada
|
14
|
15
|
15
|
United States of America
|
3
|
2
|
3
|
Other
|
4
|
4
|
4
|
Total
|
21
|
21
|
22
|
E.
|
Share Ownership
|
|
||||||||||
|
Common Shares
|
% of
Ownership (1) |
Options (2) |
Exercise
Price |
Expiry Date
|
% of Outstanding
(3)
|
||||
Officers
|
|
|
|
|
|
|
||||
Dr. Bradley G. Thompson
(4)
|
672,900
|
|
**
|
149,160
|
|
2.22
|
|
November 15, 2017
|
|
|
|
|
|
|
50,000
|
|
3.06
|
|
November 15, 2017
|
|
|
|
|
|
|
215,000
|
|
6.72
|
|
November 15, 2017
|
|
|
|
|
|
|
18,000
|
|
4.31
|
|
November 15, 2017
|
|
|
|
|
|
|
240,000
|
|
3.89
|
|
November 15, 2017
|
|
|
|
|
|
|
240,000
|
|
4.21
|
|
November 15, 2017
|
|
|
|
|
|
|
360,000
|
|
1.74
|
|
November 15, 2017
|
|
|
|
|
|
|
608,000
|
|
0.42
|
|
November 15, 2017
|
|
|
|
|
|
|
1,880,160
|
|
|
|
|
1.93
|
%
|
|
|
|
|
|
|
|
||||
Dr. Matthew C. Coffey
|
288,550
|
|
**
|
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
|
|
||
|
|
|
240,000
|
|
1.74
|
|
December 11, 2023
|
|
||
|
|
|
734,000
|
|
0.42
|
|
December 1, 2025
|
|
||
|
|
|
400,000
|
|
0.28
|
|
January 16, 2027
|
|
||
|
|
|
1,820,333
|
|
|
|
1.60
|
%
|
||
|
|
|
|
|
|
|
||||
Kirk J. Look
|
38,700
|
|
**
|
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
|
|
||
|
|
|
160,000
|
|
1.74
|
|
December 11, 2023
|
|
||
|
|
|
464,000
|
|
0.42
|
|
December 1, 2025
|
|
||
|
|
|
300,000
|
|
0.28
|
|
January 16, 2027
|
|
||
|
|
|
1,243,000
|
|
|
|
0.97
|
%
|
||
|
|
|
|
|
|
|
||||
Dr. Andres A. Gutierrez
|
—
|
|
**
|
150,000
|
|
0.26
|
|
November 10, 2026
|
|
|
|
|
|
150,000
|
|
|
|
**
|
|||
|
|
|
|
|
|
|
||||
Dr. George Gill
|
30,000
|
|
**
|
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
|
|
||
|
|
|
80,000
|
|
1.74
|
|
December 11, 2023
|
|
||
|
|
|
250,000
|
|
0.42
|
|
December 1, 2025
|
|
||
|
|
|
461,667
|
|
|
|
**
|
|||
|
|
|
|
|
|
|
||||
Dr. Alan J. Tuchman
|
100
|
|
**
|
10,000
|
|
2.85
|
|
May 11, 2020
|
|
|
|
|
|
50,000
|
|
2.32
|
|
October 1, 2022
|
|
||
|
|
|
15,000
|
|
4.21
|
|
December 17, 2022
|
|
||
|
|
|
55,000
|
|
1.74
|
|
December 11, 2023
|
|
||
|
|
|
116,000
|
|
0.42
|
|
December 1, 2025
|
|
||
|
|
|
246,000
|
|
|
|
**
|
|||
|
|
|
|
|
|
|
||||
Directors
|
|
|
|
|
|
|
||||
Angela Holtham
|
30,000
|
|
**
|
50,000
|
|
1.46
|
|
June 18, 2024
|
|
|
|
|
|
|
50,000
|
|
|
|
|
**
|
|
|
|
|
|
|
|
|
||||
Mark Lievonen
|
23,000
|
|
**
|
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
|
|
||
|
|
|
35,000
|
|
1.74
|
|
December 11, 2023
|
|
||
|
|
|
170,000
|
|
|
|
**
|
|||
|
|
|
|
|
|
|
||||
Wayne Pisano
|
20,000
|
|
**
|
50,000
|
|
2.89
|
|
May 9, 2023
|
|
|
|
|
|
30,000
|
|
1.74
|
|
December 11, 2023
|
|
||
|
|
|
80,000
|
|
|
|
**
|
|||
|
|
|
|
|
|
|
||||
William Rice
|
—
|
|
**
|
50,000
|
|
0.80
|
|
June 8, 2025
|
|
|
|
|
|
50,000
|
|
|
|
**
|
|||
|
|
|
|
|
|
|
||||
Bernd Seizinger
|
—
|
|
**
|
50,000
|
|
0.80
|
|
June 8, 2025
|
|
|
|
|
|
50,000
|
|
|
|
**
|
|||
|
|
|
|
|
|
|
|
|||
TOTAL:
|
430,350
|
|
|
4,321,000
|
|
|
|
|
1)
|
Based on
121,258,222
common shares issued and outstanding on
March 24, 2017
.
|
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 shares outstanding of
132,262,378
.
|
4)
|
Dr. Thompson resigned as President and Chief Executive Officer on November 2, 2016.
|
|
PSUs Granted
|
PSUs Vested
|
PSUs Unvested
|
|||
Matthew Coffey
|
330,000
|
|
—
|
|
330,000
|
|
Kirk Look
|
210,000
|
|
—
|
|
210,000
|
|
Andres Gutierrez
|
300,000
|
|
—
|
|
300,000
|
|
|
840,000
|
|
—
|
|
840,000
|
|
A.
|
Major Shareholders
|
Total Number of Holders of Record
|
Total Number of Common Shares Issued and Outstanding
|
Number of US Holders of Record
|
Number of Common Shares Held by US Holders of Record
|
Percentage of Common Shares Held by US Holders of Record
|
||
192
|
121,258,222
|
51
|
47,730,085
|
|
39.36
|
%
|
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
|
•
|
an individual who is a citizen or resident of the United States;
|
•
|
a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia;
|
•
|
an estate whose income is subject to U.S. federal income taxation regardless of its source; or
|
•
|
a trust that (1) is subject to the primary supervision of a court within the U.S. and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.
|
F.
|
Dividends and Paying Agents
|
G.
|
Statements by Experts
|
H.
|
Documents on Display
|
I.
|
Subsidiary Information
|
A.
|
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 Registered Public Accounting Firms
|
D.
|
Changes in Internal Controls over Financial Reporting
|
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.
|
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
(g)
|
Executive Employment Agreement, dated March 22. 2013, between the Company and its Chief Operating Officer, Matthew Coffey
|
4.21
(g)
|
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
(g)
|
Executive Employment Agreement, dated March 22, 2013, between the Company and its Chief Financial Officer, Kirk Look
|
4.23
(g)
|
Executive Employment Agreement, dated March 22, 2013, between the Company and its Chief Executive Officer, Bradley Thompson
|
4.24
(h)
|
Amending Agreement, dated March 12, 2014, between the Company and its Chief Executive Officer, Bradley Thompson
|
4.25
(h)
|
Amending Agreement, dated March 12, 2014, between the Company and its Chief Financial Officer, Kirk Look
|
4.26
(h)
|
Amending Agreement, dated March 12, 2014, between the Company and its Chief Operating Officer, Matthew Coffey
|
4.27
(i)
|
Amending Agreement, dated March 12, 2015, between Oncolytics Biotech (U.S.) Inc. and its Senior Vice President, Medical and Clinical Affairs Chief Medical Officer, Dr. Alan Tuchman
|
4.28
(i)
|
Amending Agreement, dated March 12, 2015, between Oncolytics Biotech (U.S.) Inc. and its Vice President, Intellectual Property, Mary Ann Dillahunty.
|
4.29
(i)
|
Amending Agreement, dated March 12, 2015, between the Company and its Chief Executive Officer, Bradley Thompson
|
4.30
(i)
|
Amending Agreement, dated March 12, 2015, between Oncolytics Biotech (U.S.) Inc. and its Senior Vice President, Clinical and Regulatory Affairs, George Gill.
|
4.31
(i)
|
Amending Agreement, dated March 12, 2015, between the Company and its Chief Financial Officer, Kirk Look
|
4.32
(i)
|
Amending Agreement, dated March 12, 2015, between the Company and its Chief Operating Officer, Matthew Coffey
|
4.33
(j)
|
Amending Agreement, dated March 8, 2016, between the Company and its Chief Executive Officer, Bradley Thompson
|
4.34
(j)
|
Amending Agreement, dated March 8, 2016, between the Company and its Chief Financial Officer, Kirk Look
|
4.35
(j)
|
Amending Agreement, dated March 8, 2016, between the Company and its Chief Operating Officer, Matthew Coffey
|
4.36
(j)
|
Amending Agreement, dated November 10, 2015, between Oncolytics Biotech (U.S.) Inc. and its Senior Vice President, Medical and Clinical Affairs Chief Medical Officer, Dr. Alan Tuchman
|
4.37
(j)
|
Amending Agreement, dated March 8, 2016, between Oncolytics Biotech (U.S.) Inc. and its Senior Vice President, Medical and Clinical Affairs Chief Medical Officer, Dr. Alan Tuchman
|
4.38
(j)
|
Amending Agreement, dated March 8, 2016, between Oncolytics Biotech (U.S.) Inc. and its Senior Vice President, Clinical and Regulatory Affairs, George Gill.
|
4.39
|
Executive Employment Agreement, dated October 27, 2016, between Oncolytics Biotech (U.S.) Inc. and its Chief Medical Officer, Dr. Andres Gutierrez.
|
4.40
|
Amending Agreement, dated February 23, 2017, between the Company and its Chief Executive Officer, Matthew Coffey.
|
4.41
|
Amending Agreement, dated February 23, 2017, between the Company and its Chief Financial Officer, Kirk Look.
|
4.42
|
Settlement Agreement and Release, dated December 5, 2016 between the Company and its former Chief Executive Officer, Brad 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, 2016
|
15.2
|
Consent of Ernst & Young LLP
|
/s/ Matthew Coffey
|
/s/ Kirk Look
|
Matthew Coffey, Ph.D
|
Kirk Look, CA
|
Chief Executive Officer
|
Chief Financial Officer
|
/s/ Matt Coffey
|
/s/ Kirk Look
|
|
|
Matt Coffey, Ph.D
|
Kirk Look, CA
|
Chief Executive Officer
|
Chief Financial Officer
|
|
|
Calgary, Canada
|
|
March 9, 2017
|
Chartered Professional Accountants
|
As at December 31,
|
Notes
|
2016
$ |
2015
$ |
||
Assets
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Cash and cash equivalents
|
5
|
12,034,282
|
|
24,016,275
|
|
Short-term investments
|
5
|
2,088,800
|
|
2,060,977
|
|
Accounts receivable
|
|
54,406
|
|
340,059
|
|
Prepaid expenses
|
|
260,841
|
|
506,669
|
|
Total current assets
|
|
14,438,329
|
|
26,923,980
|
|
Non-current assets
|
|
|
|
|
|
Property and equipment
|
6
|
319,955
|
|
459,818
|
|
Total non-current assets
|
|
319,955
|
|
459,818
|
|
|
|
|
|
|
|
Total assets
|
|
14,758,284
|
|
27,383,798
|
|
Liabilities And Shareholders’ Equity
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
4,068,664
|
|
2,709,492
|
|
Total current liabilities
|
|
4,068,664
|
|
2,709,492
|
|
Commitments and contingencies
|
10, 11 and 16
|
|
|
||
Shareholders’ equity
|
|
|
|
|
|
Share capital
Authorized: unlimited Issued: December 31, 2016 – 121,258,222 December 31, 2015 – 118,151,622 |
7
|
262,321,825
|
|
261,324,692
|
|
Contributed surplus
|
8
|
26,643,044
|
|
26,277,966
|
|
Accumulated other comprehensive income
|
|
554,060
|
|
760,978
|
|
Accumulated deficit
|
|
(278,829,309
|
)
|
(263,689,330
|
)
|
Total shareholders’ equity
|
|
10,689,620
|
|
24,674,306
|
|
Total liabilities and equity
|
|
14,758,284
|
|
27,383,798
|
|
On behalf of the Board:
|
|
/s/ Angela Holtham
|
/s/ Wayne Pisano
|
Director
|
Director
|
For the years ending December 31,
|
Notes
|
2016
$ |
2015
$ |
2014
$ |
|||
Expenses
|
|
|
|
|
|
|
|
Research and development
|
8, 18, 19
|
9,770,007
|
|
8,601,864
|
|
13,824,252
|
|
Operating
|
8, 18, 19
|
5,524,500
|
|
5,315,837
|
|
4,998,694
|
|
Loss before the following
|
|
(15,294,507
|
)
|
(13,917,701
|
)
|
(18,822,946
|
)
|
Interest
|
|
163,902
|
|
197,859
|
|
210,390
|
|
Loss before income taxes
|
|
(15,130,605
|
)
|
(13,719,842
|
)
|
(18,612,556
|
)
|
Income tax recovery (expense)
|
12
|
(9,374
|
)
|
(3,153
|
)
|
(6,779
|
)
|
Net loss
|
|
(15,139,979
|
)
|
(13,722,995
|
)
|
(18,619,335
|
)
|
Other comprehensive income items that may be
reclassified to net loss |
|
|
|
|
|
|
|
Translation adjustment
|
|
(206,918
|
)
|
480,935
|
|
200,345
|
|
Net comprehensive loss
|
|
(15,346,897
|
)
|
(13,242,060
|
)
|
(18,418,990
|
)
|
Basic and diluted loss per common share
|
9
|
(0.13
|
)
|
(0.12
|
)
|
(0.21
|
)
|
Weighted average number of shares (basic and diluted)
|
|
119,880,200
|
|
112,613,845
|
|
87,869,149
|
|
|
Share Capital
$
|
Warrants
$
|
Contributed Surplus
$
|
Accumulated Other Comprehensive Income
$
|
Accumulated Deficit
$
|
Total
$
|
||||||
As at December 31, 2013
|
228,612,564
|
|
376,892
|
|
24,491,212
|
|
79,698
|
|
(231,347,000
|
)
|
22,213,366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and other comprehensive income
|
—
|
|
—
|
|
—
|
|
200,345
|
|
(18,619,335
|
)
|
(18,418,990
|
)
|
Issued, pursuant to Share Purchase Agreement
|
8,861,652
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8,861,652
|
|
Issued, pursuant to "At the Market" Agreement
|
1,468,668
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,468,668
|
|
Expired warrants
|
—
|
|
(376,892
|
)
|
376,892
|
|
—
|
|
—
|
|
—
|
|
Share based compensation
|
—
|
|
—
|
|
980,325
|
|
—
|
|
—
|
|
980,325
|
|
Share issue costs
|
(1,285,828
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,285,828
|
)
|
As at December 31, 2014
|
237,657,056
|
|
—
|
|
25,848,429
|
|
280,043
|
|
(249,966,335
|
)
|
13,819,193
|
|
|
|
|
|
|
|
|
||||||
Net loss and other comprehensive income
|
—
|
|
—
|
|
—
|
|
480,935
|
|
(13,722,995
|
)
|
(13,242,060
|
)
|
Issued, pursuant to Share Purchase Agreement
|
4,371,687
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4,371,687
|
|
Issued, pursuant to "At the Market" Agreement
|
20,049,693
|
|
—
|
|
—
|
|
—
|
|
—
|
|
20,049,693
|
|
Share based compensation
|
—
|
|
—
|
|
429,537
|
|
—
|
|
—
|
|
429,537
|
|
Share issue costs
|
(753,744
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(753,744
|
)
|
As at December 31, 2015
|
261,324,692
|
|
—
|
|
26,277,966
|
|
760,978
|
|
(263,689,330
|
)
|
24,674,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and other comprehensive income
|
—
|
|
—
|
|
—
|
|
(206,918
|
)
|
(15,139,979
|
)
|
(15,346,897
|
)
|
Issued, pursuant to incentive share award plan
|
41,000
|
|
—
|
|
(41,000
|
)
|
—
|
|
—
|
|
—
|
|
Issued, pursuant to "At the Market" Agreement
|
1,456,296
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,456,296
|
|
Share based compensation
|
—
|
|
—
|
|
406,078
|
|
—
|
|
—
|
|
406,078
|
|
Share issue costs
|
(500,163
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(500,163
|
)
|
As at December 31, 2016
|
262,321,825
|
|
—
|
|
26,643,044
|
|
554,060
|
|
(278,829,309
|
)
|
10,689,620
|
|
For the years ending December 31,
|
Notes
|
2016
$ |
2015
$ |
2014
$ |
|||
|
|
|
|
|
|
|
|
Operating Activities
|
|
|
|
|
|
|
|
Net loss for the year
|
|
(15,139,979
|
)
|
(13,722,995
|
)
|
(18,619,335
|
)
|
Amortization - property and equipment
|
|
162,233
|
|
180,411
|
|
163,501
|
|
Share based compensation
|
8, 18, 19
|
406,078
|
|
429,537
|
|
980,325
|
|
Unrealized foreign exchange (gain) loss
|
18
|
(139,810
|
)
|
(816,319
|
)
|
242,542
|
|
Net change in non-cash working capital
|
15
|
2,233,865
|
|
(1,105,464
|
)
|
(2,443,988
|
)
|
Cash used in operating activities
|
|
(12,477,613
|
)
|
(15,034,830
|
)
|
(19,676,955
|
)
|
Investing Activities
|
|
|
|
|
|
|
|
Acquisition of property and equipment
|
6
|
(23,527
|
)
|
(108,268
|
)
|
(152,750
|
)
|
Redemption (purchase) of short-term investments
|
5
|
(27,823
|
)
|
(29,292
|
)
|
(30,041
|
)
|
Cash used in investing activities
|
|
(51,350
|
)
|
(137,560
|
)
|
(182,791
|
)
|
Financing Activities
|
|
|
|
|
|
|
|
Proceeds from Share Purchase Agreement
|
7
|
—
|
|
4,305,396
|
|
7,830,409
|
|
Proceeds from "At the Market" equity distribution agreement
|
7
|
956,133
|
|
19,362,240
|
|
1,214,083
|
|
Cash provided by financing activities
|
|
956,133
|
|
23,667,636
|
|
9,044,492
|
|
(Decrease) increase in cash
|
|
(11,572,830
|
)
|
8,495,246
|
|
(10,815,254
|
)
|
Cash and cash equivalents, beginning of year
|
|
24,016,275
|
|
14,152,825
|
|
25,220,328
|
|
Impact of foreign exchange on cash and cash equivalents
|
|
(409,163
|
)
|
1,368,204
|
|
(252,249
|
)
|
Cash and cash equivalents, end of year
|
|
12,034,282
|
|
24,016,275
|
|
14,152,825
|
|
Office equipment and furniture
|
20%
|
Medical equipment
|
20%
|
Computer equipment
|
30%
|
Leasehold improvements
|
Straight-line over the term of the lease
|
|
Face
Value
$
|
|
Original Cost
$
|
|
Accrued Interest
$
|
|
Carrying
Value
$
|
|
Fair
Value
$
|
|
Effective
Interest Rate
%
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
Short-term investments
|
2,088,800
|
|
2,088,800
|
|
—
|
|
2,088,800
|
|
2,088,800
|
|
1.41%
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
Short-term investments
|
2,060,977
|
|
2,060,977
|
|
—
|
|
2,060,977
|
|
2,060,977
|
|
1.35%
|
|
Medical Equipment
|
Computer Equipment
|
Office Furniture
|
Office Equipment
|
Leasehold Improvements
|
Total
|
||||||
Cost
|
|
|
|
|
|
|
||||||
As at December 31, 2014
|
191,566
|
|
624,095
|
|
208,543
|
|
86,295
|
|
425,709
|
|
1,536,208
|
|
Additions, net of foreign exchange impact
|
6,304
|
|
61,182
|
|
5,542
|
|
1,669
|
|
40,156
|
|
114,853
|
|
As at December 31, 2015
|
197,870
|
|
685,277
|
|
214,085
|
|
87,964
|
|
465,865
|
|
1,651,061
|
|
Additions, net of foreign exchange impact
|
—
|
|
20,098
|
|
—
|
|
1,502
|
|
770
|
|
22,370
|
|
As at December 31, 2016
|
197,870
|
|
705,375
|
|
214,085
|
|
89,466
|
|
466,635
|
|
1,673,431
|
|
|
|
|
|
|
|
|
||||||
Amortization
|
|
|
|
|
|
|
||||||
As at December 31, 2014
|
119,635
|
|
452,640
|
|
114,927
|
|
52,381
|
|
271,249
|
|
1,010,832
|
|
Amortization for the year
|
13,842
|
|
52,605
|
|
12,456
|
|
6,378
|
|
95,130
|
|
180,411
|
|
As at December 31, 2015
|
133,477
|
|
505,245
|
|
127,383
|
|
58,759
|
|
366,379
|
|
1,191,243
|
|
Amortization for the year
|
11,492
|
|
48,929
|
|
10,241
|
|
5,408
|
|
86,163
|
|
162,233
|
|
As at December 31, 2016
|
144,969
|
|
554,174
|
|
137,624
|
|
64,167
|
|
452,542
|
|
1,353,476
|
|
|
|
|
|
|
|
|
||||||
Net book value
|
|
|
|
|
|
|
||||||
As at December 31, 2016
|
52,901
|
|
151,201
|
|
76,461
|
|
25,299
|
|
14,093
|
|
319,955
|
|
As at December 31, 2015
|
64,393
|
|
180,032
|
|
86,702
|
|
29,205
|
|
99,486
|
|
459,818
|
|
Issued:
|
Shares
|
Warrants
|
||||||
|
Number
|
Amount
$ |
Number
|
Equity Amount
$ |
||||
Balance, December 31, 2013
|
84,803,818
|
|
228,612,564
|
|
303,945
|
|
376,892
|
|
Issued pursuant to Share Purchase
Agreement (a) |
7,037,216
|
|
8,861,652
|
|
—
|
|
—
|
|
Issued pursuant to "At the Market" sales agreement
(b)
|
1,671,460
|
|
1,468,668
|
|
—
|
|
—
|
|
Expiry of warrants
|
—
|
|
—
|
|
(303,945
|
)
|
(376,892
|
)
|
Share issue costs
|
—
|
|
(1,285,828
|
)
|
—
|
|
—
|
|
Balance, December 31, 2014
|
93,512,494
|
|
237,657,056
|
|
—
|
|
—
|
|
Issued pursuant to Share Purchase
Agreement (a) |
5,778,674
|
|
4,371,687
|
|
—
|
|
—
|
|
Issued pursuant to "At the Market" sales agreement
(b)
|
18,860,454
|
|
20,049,693
|
|
—
|
|
—
|
|
Share issue costs
|
—
|
|
(753,744
|
)
|
—
|
|
—
|
|
Balance, December 31, 2015
|
118,151,622
|
|
261,324,692
|
|
—
|
|
—
|
|
Issued pursuant to incentive share award plan
|
100,000
|
|
41,000
|
|
—
|
|
—
|
|
Issued pursuant to "At the Market" equity distribution agreement
(c)
|
3,006,600
|
|
1,456,296
|
|
|
|
|
|
Share issue costs
|
—
|
|
(500,163
|
)
|
—
|
|
—
|
|
Balance, December 31, 2016
|
121,258,222
|
|
262,321,825
|
|
—
|
|
—
|
|
(a)
|
In 2014, we entered into a share purchase agreement (the "Share Purchase Agreement") with Lincoln Park Capital Fund, LLC ("LPC") to sell up to US$26,000,000 of common stock. Subject to the terms and conditions of the Share Purchase Agreement and at our sole discretion, we may sell up to US$26.0 million worth of common shares to LPC over the 30-month term. The purchase price of the common shares was based on prevailing market prices of our common shares immediately preceding the notice of a sale without any fixed discount. Subject to the Share Purchase Agreement, we controlled the timing and amount of each investment and LPC was obligated to make such purchases, if and when elected. The Share Purchase Agreement did not impose any upper price limit restrictions, negative covenants or restrictions on our future financing activities, but required that we maintained our NASDAQ listing. Under the Share Purchase Agreement, we issued an initial commitment fee of 292,793 common shares to LPC valued at fair value of US$455,000. An additional 292,793 common shares was to be issued on a pro rata basis under the terms of the Share Purchase Agreement as an additional commitment fee.
|
(b)
|
On October 24, 2014, we entered into an "at-the-market" ("ATM") equity distribution agreement with Canaccord Genuity Inc. acting as sole agent. Under the terms of the distribution agreement, we were able to, from time to time, sell shares of our common stock having an aggregate offering value of up to US$20 million through Canaccord Genuity Inc. directly to investors in the US through our NASDAQ listing. We were able to determine, at our sole discretion, the timing and number of shares to be sold under this ATM facility. During 2015, we issued
18,860,454
common shares (2014 -
1,671,460
common shares) for net proceeds of approximately
US$15.5 million
(2014 - US$1.1 million). On November 5, 2015, we were delisted from the NASDAQ Capital Market and as a result we were unable to sell common shares under our existing ATM.
|
(c)
|
On February 25, 2016, we entered into a new ATM equity distribution agreement with Canaccord Genuity Inc. acting as our sole agent with an aggregate offering value of up to $4.6 million which allows us to sell our common shares through the facilities of the Toronto Stock Exchange or other "marketplace” (as defined in National Instrument 21-101 Marketplace Operation) in Canada (our "Canadian ATM"). Subject to the terms of our Canadian ATM, we are able to determine, at our sole discretion, the timing and number of shares to be sold under this ATM facility. During 2016, we sold
3,006,600
common shares for gross proceeds of $
1,456,296
. We incurred share issue costs which included costs to establish our Canadian ATM facility of $
500,163
.
|
|
2016
|
2015
|
2014
|
|||||||
|
Stock Options
|
Weighted Average Exercise Price
$ |
Stock Options
|
Weighted Average Exercise Price
$ |
Stock Options
|
Weighted Average Exercise Price
$ |
||||
Outstanding, beginning of the year
|
8,561,394
|
|
2.17
|
5,446,394
|
|
3.19
|
5,918,678
|
|
3.75
|
|
Granted during the year
|
1,572,000
|
|
0.28
|
3,280,000
|
|
0.43
|
500,000
|
|
1.26
|
|
Forfeited during the year
|
(737,500
|
)
|
0.65
|
(100,000
|
)
|
1.69
|
—
|
|
—
|
|
Expired during the year
|
(721,667
|
)
|
3.61
|
(65,000
|
)
|
1.49
|
(972,284
|
)
|
5.56
|
|
Exercised during the year
|
—
|
—
|
—
|
—
|
—
|
|
—
|
|
||
Outstanding, end of the
year
|
8,674,227
|
|
1.83
|
8,561,394
|
|
2.17
|
5,446,394
|
|
3.19
|
|
Options exercisable, end of the year
|
6,729,643
|
|
2.27
|
6,476,394
|
|
2.73
|
4,841,060
|
|
3.37
|
|
Range of Exercise Prices
|
Number Outstanding
|
Weighted Average Remaining Contractual Life (years)
|
Weighted Average Exercise Price
$ |
Number Exercisable
|
Weighted Average Exercise Price
$ |
||
$0.26-$0.41
|
1,972,000
|
|
9.60
|
0.31
|
809,416
|
|
0.35
|
$0.42-$0.57
|
2,172,000
|
|
8.92
|
0.42
|
1,390,000
|
|
0.42
|
$0.58-$1.87
|
1,622,667
|
|
7.00
|
1.56
|
1,622,667
|
|
1.56
|
$1.88-$3.95
|
1,592,560
|
|
4.10
|
3.04
|
1,592,560
|
|
3.04
|
$3.96-$6.72
|
1,315,000
|
|
4.98
|
5.33
|
1,315,000
|
|
5.33
|
|
8,674,227
|
|
7.23
|
1.83
|
6,729,643
|
|
2.27
|
|
2016
|
2015
|
2014
|
|
|
|
|
Risk-free interest rate
|
0.82%
|
0.63%
|
1.05%
|
Expected hold period to exercise
|
3.0 years
|
3.0 years
|
2.7 years
|
Volatility in the price of the Company's shares
|
94.84%
|
90%
|
72.55%
|
Rate of forfeiture
|
3.67%
|
3.67%
|
2.5%
|
Dividend yield
|
Nil
|
Nil
|
Nil
|
Weighted average fair value of options
|
$0.17
|
$0.24
|
$0.54
|
|
2016
|
2015
|
2014
|
|||
Outstanding, beginning of the year
|
368,831
|
|
—
|
|
—
|
|
Granted during the year
|
1,053,998
|
|
368,831
|
|
—
|
|
Forfeited during the year
|
—
|
|
—
|
|
—
|
|
Vested during the year
|
(100,000
|
)
|
—
|
|
—
|
|
Outstanding, end of the year
|
1,322,829
|
|
368,831
|
|
—
|
|
|
2016
|
2015
|
2014
|
|||
Outstanding, beginning of the year
|
—
|
|
—
|
|
—
|
|
Granted during the year
|
1,500,000
|
|
—
|
|
—
|
|
Forfeited during the year
|
(660,000
|
)
|
—
|
|
—
|
|
Outstanding, end of the year
|
840,000
|
|
—
|
|
—
|
|
|
Amount
$
|
|
2017
|
163,978
|
|
2018
|
103,513
|
|
2019
|
103,513
|
|
2020
|
103,513
|
|
2021
|
43,130
|
|
|
517,647
|
|
|
2016
|
2015
|
2014
|
|||
Loss before income taxes
|
(15,130,605
|
)
|
(13,719,842
|
)
|
(18,612,556
|
)
|
Statutory Canadian corporate tax rate
|
27.00
|
%
|
26.00
|
%
|
25.00
|
%
|
Anticipated tax recovery
|
(4,085,263
|
)
|
(3,567,159
|
)
|
(4,653,139
|
)
|
Foreign jurisdiction tax rate difference
|
2,184,796
|
|
2,659,145
|
|
3,319,210
|
|
Employee stock based compensation
|
109,641
|
|
111,680
|
|
245,081
|
|
Change in tax rate
|
—
|
|
(1,336,941
|
)
|
—
|
|
Adjustment to opening tax pools
|
(39,569
|
)
|
(1,339,467
|
)
|
(316,193
|
)
|
Other permanent differences
|
100,525
|
|
23,620
|
|
(48,092
|
)
|
Change in deferred tax benefits deemed not probable to
be recovered |
1,739,557
|
|
3,455,622
|
|
1,462,572
|
|
Deferred income tax recovery
|
—
|
|
—
|
|
—
|
|
Current income taxes
|
9,687
|
|
6,500
|
|
9,439
|
|
Adjustment in respect to prior periods
|
(313
|
)
|
(3,347
|
)
|
(2,660
|
)
|
Net current tax expense
|
9,374
|
|
3,153
|
|
6,779
|
|
Expiry
|
$
|
|
2026
|
9,809,000
|
|
2027
|
12,170,000
|
|
2029
|
4,009,000
|
|
2030
|
4,774,000
|
|
2031
|
4,343,000
|
|
2032
|
2,873,000
|
|
2033
|
2,457,000
|
|
2034
|
2,472,000
|
|
2035
|
3,125,000
|
|
2036
|
6,457,000
|
|
|
52,489,000
|
|
Expiry
|
$
|
|
2020
|
189,000
|
|
2021
|
471,000
|
|
2022
|
465,000
|
|
2023
|
361,000
|
|
2024
|
228,000
|
|
2025
|
271,000
|
|
2026
|
520,000
|
|
2027
|
596,000
|
|
2028
|
622,000
|
|
2029
|
173,000
|
|
2030
|
91,000
|
|
2031
|
114,000
|
|
2032
|
381,000
|
|
2033
|
487,000
|
|
2034
|
270,000
|
|
2035
|
182,620
|
|
2036
|
45,007
|
|
|
5,466,627
|
|
|
2016
$ |
2015
$ |
2014
$ |
|||
Net operating losses carried forward
|
17,821,631
|
|
15,950,044
|
|
13,130,052
|
|
Scientific research and experimental development
|
7,394,707
|
|
7,278,284
|
|
6,424,359
|
|
Investment tax credits
|
3,990,664
|
|
3,987,214
|
|
4,083,046
|
|
Undepreciated capital costs in excess of book value of property and equipment and intellectual property
|
1,908,654
|
|
1,839,107
|
|
1,720,154
|
|
Share issue costs
|
432,659
|
|
619,066
|
|
655,787
|
|
Net capital losses carried forward
|
7,598
|
|
7,598
|
|
7,035
|
|
Unrecognized deferred tax asset
|
31,555,913
|
|
29,681,313
|
|
26,020,433
|
|
|
2016
$ |
2015
$ |
||
Cash and cash equivalents
|
12,034,282
|
|
24,016,275
|
|
Short-term investments
|
2,088,800
|
|
2,060,977
|
|
Shareholders’ equity
|
10,689,620
|
|
24,674,306
|
|
|
US dollars
$
|
British pounds
£
|
Euro
€ |
|||
Cash and cash equivalents
|
4,629,766
|
|
31,295
|
|
32,565
|
|
Accounts payable
|
(134,059
|
)
|
(10,837
|
)
|
—
|
|
|
4,495,707
|
|
20,458
|
|
32,565
|
|
|
2016
$ |
2015
$ |
2014
$ |
|||
Change in:
|
|
|
|
|
|
|
Accounts receivable
|
285,653
|
|
(148,308
|
)
|
(85,898
|
)
|
Prepaid expenses
|
245,828
|
|
(215,116
|
)
|
70,190
|
|
Accounts payable and accrued liabilities
|
1,359,172
|
|
(664,505
|
)
|
(2,634,664
|
)
|
Non-cash impact of foreign exchange
|
343,212
|
|
(77,535
|
)
|
206,384
|
|
Change in non-cash working capital related to operating activities
|
2,233,865
|
|
(1,105,464
|
)
|
(2,443,988
|
)
|
|
2016
$ |
2015
$ |
2014
$ |
|||
Cash interest received
|
163,902
|
|
197,859
|
|
210,390
|
|
Cash taxes paid
|
4,468
|
|
3,421
|
|
9,715
|
|
|
2016
$ |
2015
$ |
2014
$ |
|||
Included in research and development expenses:
|
|
|
|
|
|
|
Realized foreign exchange loss (gain)
|
104,851
|
|
238,709
|
|
273,996
|
|
Unrealized non-cash foreign exchange (gain) loss
|
67,109
|
|
(816,319
|
)
|
242,542
|
|
Non-cash share based compensation
|
233,919
|
|
257,016
|
|
588,658
|
|
|
|
|
|
|
|
|
Included in operating expenses
|
|
|
|
|
|
|
Amortization of property and equipment
|
162,233
|
|
180,411
|
|
163,501
|
|
Non-cash share based compensation
|
172,159
|
|
172,521
|
|
391,667
|
|
Office minimum lease payments
|
148,600
|
|
196,601
|
|
94,888
|
|
|
2016
$ |
2015
$ |
2014
$ |
|||
Short-term employee compensation and benefits
|
2,753,553
|
|
2,941,342
|
|
2,535,167
|
|
Termination benefits
|
1,330,828
|
|
—
|
|
—
|
|
Share-based payments
|
372,008
|
|
353,419
|
|
771,438
|
|
|
4,456,389
|
|
3,294,761
|
|
3,306,605
|
|
A.
|
OBUS and its Affiliates are engaged in the business of developing pharmaceutical products;
|
B.
|
OBUS has made an offer of employment to the Employee, subject to the terms and conditions contained herein, and subject to the termination of the Services Agreement concurrent with the commencement of employment under this Agreement;
|
C.
|
The Employee is prepared to accept the offer of employment;
|
Section 1 -
|
Definitions and Interpretation
|
(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 October 31, 2016;
|
(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)
|
"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
|
(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;
|
(f)
|
"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;
|
(g)
|
"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 and 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.
|
(3)
|
The parties shall with reasonable diligence take all action, do all things, attend or cause their representatives to attend all meetings and execute all further documents, agreements and assurances as may be required from time to time in order to carry out the terms and conditions of this Agreement in accordance with their true intent.
|
Section 2 -
|
Employment
|
(a)
|
diligently, faithfully and to the best of the Employee's ability; and
|
(b)
|
in the best interests of OBUS.
|
Section 3 -
|
Remuneration
|
Section 4 -
|
Benefits and Equity Compensation
|
Section 5 -
|
Vacations
|
Section 6 -
|
Place of Employment
|
Section 7 -
|
Confidential Information
|
(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 Canadian 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;
|
Section 12 -
|
Enurement
|
(a)
|
in the case of OBUS, its successors and permitted assigns; and
|
(b)
|
in the case of the Employee, his heirs, executors, administrators or other personal representatives.
|
ONCOLYTICS BIOTECH (U.S.), INC.
|
|
Per:
|
/s/ Alan Tuchman
|
|
Alan Tuchman
President
|
Per:
|
/s/ Gilles Gosselin
|
|
Gilles Gosselin
CFO
|
1
|
Interpretation
|
2
|
Amendment to the Employment Agreement
|
(1)
|
Oncolytics confirms the employment of the Employee in the position of President and Chief Executive Officer and the Employee accepts the employment, effective January 1
st
, 2017;
|
(1)
|
Commencing January 1, 2017, Oncolytics shall pay to the Employee a salary of FOUR HUNDRED THIRTY THOUSAND ($430,000.00) CANADIAN DOLLARS per annum, exclusive of bonuses, benefits and other compensation, payable in equal installments of SEVENTEEN THOUSAND NINE HUNDRED SIXTEEN DOLLARS and SIXTY-SEVEN CENTS ($17,916.67) on the 15
th
and last day of each month.
|
3
|
Confirmation
|
4
|
Miscellaneous
|
(a)
|
This Agreement shall be governed by and construed in accordance with the laws in force in the Province of Alberta. The parties hereby submit to the jurisdiction of the Courts of Alberta.
|
(b)
|
The parties shall with reasonable diligence take all action, do all things, attend or cause their representatives to attend all meetings and execute all further documents, agreements and assurances as may be required from time to time in order to carry out the terms and conditions of this Agreement in accordance with their true intent.
|
|
|
ONCOLYTICS BIOTECH INC.
|
|
Per:
|
/s/ Wayne Pisano
|
||
|
|
|
|
Per:
|
/s/ Kirk Look
|
||
|
|
1
|
Interpretation
|
2
|
Amendment to the Employment Agreement
|
(1)
|
Commencing January 1, 2017, Oncolytics shall pay to the Employee a salary of THREE HUNDRED FORTY-FIVE THOUSAND ($345,000.00) CANADIAN DOLLARS per annum, exclusive of bonuses, benefits and other compensation, payable in equal installments of FOURTEEN THOUSAND THREE HUNDRED SEVENTY-FIVE DOLLARS ($14,375.00) on the 15
th
and last day of each month.
|
3
|
Confirmation
|
4
|
Miscellaneous
|
(a)
|
This Agreement shall be governed by and construed in accordance with the laws in force in the Province of Alberta. The parties hereby submit to the jurisdiction of the Courts of Alberta.
|
(b)
|
The parties shall with reasonable diligence take all action, do all things, attend or cause their representatives to attend all meetings and execute all further documents, agreements and assurances as may be required from time to time in order to carry out the terms and conditions of this Agreement in accordance with their true intent.
|
|
|
ONCOLYTICS BIOTECH INC.
|
|
Per:
|
/s/ Wayne Pisano
|
||
|
|
|
|
Per:
|
/s/ Matt Coffey
|
||
|
|
1.
|
Employee confirms that upon receipt of the first payment under Paragraph 2 below, he will have received from Employer all of his statutory entitlements including but not limited to vacation pay.
|
2.
|
Employer will pay Employee a total severance payment of CAD $1,330,828 (minus required deductions). This amount will be paid in 12 monthly installments of $110,902 (minus required deductions
)
. At Employee’s request, the installments will be taxed at the usual taxation rate (rather than the 30% retiring allowance rate) without CPP and EI deductions. Employee agrees to indemnify and save Employer harmless from and against any and all actions, causes of action, claims, proceedings, applications, complaints and demands whatsoever arising from or related to such taxation. The first payment will be made upon this Agreement being fully executed, and will made via cheque to Employee. All remaining payments will be made via direct deposit to Employee’s bank account on or before the 15
th
of the month, commencing on January 15, 2017.
|
3.
|
Employee will immediately resign from Employer Board of Directors and will execute all documentation to effect such resignation.
|
4.
|
Notwithstanding the terms of Employer’s Stock Option Plan, Employer will extend the term of 1,880,160 of Employee’s outstanding stock options to the earlier of: (i) the date of the expiration of the applicable option period; and (ii) 5:00 p.m. (Calgary time) on the date of the last payment outlined in paragraph 2 above. An aggregate of 608,000 of Employee’s options which are not scheduled to vest until December 1, 2017 (as to 304,000 options) and December 1, 2018 (as to the remaining 304,000 options) will not be extended and will terminate in accordance with their terms. The option schedule is set out in Schedule “B”.
|
5.
|
All share awards granted to Employee under Employer’s Incentive Share Award Plan and the resolution of the Board of Directors of Employer dated September 9, 2016, shall have immediately terminated effective as of November 2, 2016.
|
6.
|
Employee confirms that he will adhere to the terms of his employment agreement, including but not limited to the confidentiality and non-competition covenants.
|
7.
|
Employee can keep the electronics in his possession that were supplied to him as part of his employment. Employee will ensure that no Employer confidential information is retained on such devices.
|
8.
|
The mosaic which is Employee’s property can be removed from Employer’s office by Employee. Employee is responsible for all associated costs.
|
9.
|
Employer will issue a press release in the following form:
|
10.
|
Employee will execute the release agreement attached as Schedule “A” (the “
Release
”) and return an originally executed copy to Employer. Nothing in this Agreement or the Release is intended to prevent Employee from communicating in good faith with the any securities regulatory authority regarding violations of securities laws by the Employer.
|
11.
|
Employee acknowledges that he has received independent legal advice from McLennan Ross LLP with respect to the terms and conditions of this Agreement and that he fully understands them. Employee voluntarily accepts the terms and conditions of this Agreement for the purpose of making full and final compromise, adjustment and settlement of all claims as aforesaid.
|
12.
|
Employee will not disclose this Agreement or the terms of settlement contained in this Agreement to any person or corporation except to the extent that such disclosure is required by law or to the extent necessary to permit him to obtain legal and/or financial advice in connection with this Agreement.
|
13.
|
This Agreement will enure to the benefit of and be binding upon the heirs, executors, administrators and legal personal representative of Employee and the successors and permitted assigns of Employer respectively.
|
14.
|
This Agreement will be governed by and construed in accordance with the laws of the Province of Alberta and the laws of Canada applicable in Alberta.
|
15.
|
Employee acknowledges receipt of a copy of this Agreement duly signed by Employer.
|
16.
|
This Agreement may be executed in counterparts and by facsimile and electronic (pdf) transmission.
|
SIGNED, AND DELIVERED
|
)
|
|
|
|
in the presence of:
|
)
|
|
|
|
|
)
|
|
|
|
Michael Aasen
|
)
|
/s/ Brad Thompson
|
(s)
|
|
Witness
|
)
|
BRADLEY GEORGE THOMPSON
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ONCOLYTICS BIOTECH INC.
|
|
|
|
Per:
|
/s/ Wayne Pisano
|
|
SIGNED
AND DELIVERED
|
)
|
|
|
in the presence of:
|
)
|
|
|
|
)
|
|
|
/s/ Michael Aasen
|
)
|
/s/ Brad Thompson
|
|
Witness
|
)
|
BRADLEY GEORGE THOMPSON
|
Name
|
Jurisdiction
|
Oncolytics Biotech (Barbados) Inc.
|
Barbados
|
Oncolytics Biotech (US) Inc.
|
Delaware
|
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 27, 2017
|
|
/s/ Matthew Coffey
|
|
|
|
Matthew Coffey, 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 27, 2017
|
|
/s/ Kirk Look
|
|
|
|
Kirk Look, CA
Chief Financial Officer
Principal Accounting and Financial Officer
|
Forward-Looking Statements
|
|
REOLYSIN
®
Development For 201
6
|
|
Manufacturing
and Process Development
|
|
REOLYSIN
®
Development For 2017
|
|
|
Objective Response
Rate
(%)
|
Progression Free
Survival
(months)
|
Median Overall
Survival
(months)
1
|
|||
|
Test
|
Control
|
Test
|
Control
|
Test
|
Control
|
Female Patients
|
63.2 (n=19)
|
23.8 (n=21)
|
7.43 (n=19)
|
8.08 (n=21)
|
19.3 (n=19)
|
14.5 (n=21)
|
Male Patients
|
46.9 (n=32)
|
41.9 (n=31)
|
7.33 (n=32)
|
9.26 (n=31)
|
15.4 (n=32)
|
15.7 (n=31)
|
Overall
|
52.9 (n=51)
|
34.6 (n=52)
|
7.33 (n=51)
|
9.13 (n=52)
|
15.57 (n=51)
|
15.21(n=52)
|
|
Median Progression Free Survival
(months)
|
Median Overall Survival
(months)
|
||||
|
Test Arms
(Arm A+C)
(95% CI)
|
Control Arms
(Arm B+D)
(95% CI)
|
Hazard
Ratio
(95% CI)
|
Test Arms
(Arm A+C)
(95% CI)
|
Control Arms
(Arm B+D)
(95% CI)
|
Hazard
Ratio
(95% CI)
|
EGFR
1
|
5.16 (0.76-8.71)
(n=8)
|
4.63 (1.51-7.03)
(n=5)
|
0.54 (0.13-2.22)
|
18.66 (1.38-26.84)
(n=8)
|
7.49 (4.63-16.79)
(n=5)
|
0.37 (0.08-1.71)
|
TP53
1
|
4.07 (2.63-6.21)
(n=24)
|
2.40 (1.28-2.99)
(n=21)
|
0.58 (0.31-1.08)
|
8.74 (6.83-13.93)
(n=23)
|
6.14 (3.02-8.18)
(n=21)
|
0.55 (0.28-1.07)
|
Female
Patients
|
3.98 (2.66-5.39)
(n=41)
|
2.84 (1.51-4.34)
(n=34)
|
0.59 (0.36-0.98)
|
8.38 (5.36-10.38)
(n=41)
|
7.59 (5.59-10.45)
(n=34)
|
0.85 (0.49-1.46)
|
Male
Patients
|
2.56 (1.45-3.94)
(n=36)
|
2.69 (2.46-4.24)
(n=41)
|
1.34 (0.83-2.14)
|
7.66 (4.37-10.94)
(n=36)
|
7.26 (4.86-10.78)
(n=41)
|
1.0 (0.60-1.68)
|
Overall
|
2.96 (2.56-4.17)
(n=77)
|
2.83 (2.50-3.98)
(n=75)
|
0.93 (0.66-1.31)
|
8.12 (5.85-9.40)
(n=77)
|
7.39 (5.72-9.43)
(n=75)
|
0.94 (0.64-1.37)
|
Arm
|
Median OS
(months)
|
1-year OS
(%)
|
2-year OS
(%)
|
3-year OS
(%)
|
Stayed on Control (n = 20)
|
7.0
|
28
|
6
|
—
|
Randomized to Test (n = 36)
|
7.9
|
34
|
20
|
7
|
Crossed over to Test (n = 17)
|
11.8
|
33
|
13
|
7
|
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.
|
|
2016
|
|
|
Risk-free interest rate
|
0.82%
|
Expected hold period to exercise
|
3.0 years
|
Volatility in the price of the Company's shares
|
94.84%
|
Rate of forfeiture
|
3.67%
|
Dividend yield
|
Nil
|
Weighted average fair value of options
|
$0.17
|
|
2016
$ |
2015
$ |
2014
$ |
|||
Revenue
|
—
|
|
—
|
|
—
|
|
Consolidated net loss
(1)
|
(15,139,979
|
)
|
(13,722,995
|
)
|
(18,619,335
|
)
|
Basic and diluted loss per share
(1), (2)
|
(0.13
|
)
|
(0.12
|
)
|
(0.21
|
)
|
Total assets
(2)
|
14,758,284
|
|
27,383,798
|
|
17,193,190
|
|
Cash dividends declared per share
(3)
|
Nil
|
|
Nil
|
|
Nil
|
|
Notes:
|
||||||
(1) Included in consolidated net loss and loss per common share for 2016, 2015, and 2014 are share based payment expenses of $406,078, $429,537 and $980,325, respectively.
|
||||||
(2) We issued 3,106,600 common shares for net cash proceeds of $1.0 million in 2016 (2015 - 24,639,128 common shares for net cash proceeds of $23.7 million; 2014 - 8,708,676 common shares for net cash proceeds of $9.0 million).
|
||||||
(3) We have not declared or paid any dividends since incorporation.
|
|
2016 $ |
2015 $ |
2014 $ |
|||
Clinical trial expenses
|
1,620,114
|
|
1,323,610
|
|
4,983,644
|
|
Manufacturing and related process development expenses
|
1,725,835
|
|
2,306,024
|
|
2,705,296
|
|
Intellectual property expenditures
|
1,096,097
|
|
1,032,227
|
|
1,077,552
|
|
Research collaboration expenses
|
369,469
|
|
698,909
|
|
621,936
|
|
Other R&D expenses
|
4,553,816
|
|
4,098,180
|
|
3,703,798
|
|
Scientific research and development refund
|
(1,203
|
)
|
(62,144
|
)
|
(84,762
|
)
|
Foreign exchange loss (gain)
|
171,960
|
|
(1,051,958
|
)
|
228,130
|
|
Share based payments
|
233,919
|
|
257,016
|
|
588,658
|
|
Research and development expenses
|
9,770,007
|
|
8,601,864
|
|
13,824,252
|
|
|
2016 $ |
2015 $ |
2014 $ |
|||
Clinical trial expenses
|
1,620,114
|
|
1,323,610
|
|
4,983,644
|
|
|
2016 $ |
2015 $ |
2014 $ |
|||
Product manufacturing expenses
|
1,162,446
|
|
1,618,165
|
|
1,713,649
|
|
Process development expenses
|
563,389
|
|
687,859
|
|
991,647
|
|
Manufacturing and related process development expenses
|
1,725,835
|
|
2,306,024
|
|
2,705,296
|
|
|
2016 $ |
2015 $ |
2014 $ |
|||
Intellectual property expenses
|
1,096,097
|
|
1,032,227
|
|
1,077,552
|
|
|
2016 $ |
2015 $ |
2014 $ |
|||
Research collaborations
|
369,469
|
|
698,909
|
|
621,936
|
|
|
2016 $ |
2015 $ |
2014 $ |
|||
R&D consulting fees
|
186,221
|
|
229,427
|
|
247,685
|
|
R&D salaries and benefits
|
4,138,235
|
|
3,388,272
|
|
2,989,970
|
|
Other R&D expenses
|
229,360
|
|
480,481
|
|
466,143
|
|
Other research and development expenses
|
4,553,816
|
|
4,098,180
|
|
3,703,798
|
|
|
2016 $ |
2015 $ |
2014 $ |
|||
Scientific research and development refund
|
(1,203
|
)
|
(62,144
|
)
|
(84,762
|
)
|
|
2016 $ |
2015 $ |
2014 $ |
|||
Foreign exchange (gain) loss
|
171,960
|
|
(1,051,958
|
)
|
228,130
|
|
|
2016 $ |
2015 $ |
2014 $ |
|||
Share based payments
|
233,919
|
|
257,016
|
|
588,658
|
|
|
2016 $ |
2015 $ |
2014 $ |
|||
Public company related expenses
|
3,172,676
|
|
2,932,436
|
|
2,761,374
|
|
Office expenses
|
2,017,432
|
|
2,030,469
|
|
1,682,152
|
|
Amortization of property and equipment
|
162,233
|
|
180,411
|
|
163,501
|
|
Share based payments
|
172,159
|
|
172,521
|
|
391,667
|
|
Operating expenses
|
5,524,500
|
|
5,315,837
|
|
4,998,694
|
|
|
2016
|
2015
|
||||||||||||||||||||||
|
Dec.
|
Sept.
|
June
|
March
|
Dec.
|
Sept.
|
June
|
March
|
||||||||||||||||
Revenue
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Net loss
(2)
|
5,210
|
|
3,332
|
|
2,581
|
|
4,017
|
|
3,497
|
|
2,824
|
|
3,850
|
|
3,552
|
|
||||||||
Basic and diluted loss per common share
(2)
|
$
|
0.04
|
|
$
|
0.03
|
|
$
|
0.02
|
|
$
|
0.03
|
|
$
|
0.03
|
|
$
|
0.02
|
|
$
|
0.03
|
|
$
|
0.04
|
|
Total assets
(3)
|
14,758
|
|
18,437
|
|
21,368
|
|
23,023
|
|
27,384
|
|
31,001
|
|
33,190
|
|
31,445
|
|
||||||||
Total cash
(1), (3)
|
14,123
|
|
17,702
|
|
20,410
|
|
22,322
|
|
26,077
|
|
30,023
|
|
32,079
|
|
30,639
|
|
||||||||
Total long-term debt
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Cash dividends declared
(4)
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
(1)
|
Included in total cash are cash and cash equivalents plus short-term investments.
|
(2)
|
Included in net loss and loss per common share between December 2016 and January 2015 are quarterly share based payment expenses
|
(3)
|
We issued
3,106,600
common shares for net cash proceeds of
$1.0 million
in
2016
(
2015
-
24,639,128
common shares for net cash proceeds of
$23.7 million
).
|
(4)
|
We have not declared or paid any dividends since incorporation.
|
For the three month periods ending December 31,
|
2016
$ |
2015
$ |
||
Expenses
|
|
|
||
Research and development
|
3,411,185
|
|
1,999,987
|
|
Operating
|
1,816,183
|
|
1,535,025
|
|
Loss before the following
|
(5,227,368
|
)
|
(3,535,012
|
)
|
Interest
|
27,053
|
|
44,546
|
|
Loss before income taxes
|
(5,200,315
|
)
|
(3,490,466
|
)
|
Income taxes
|
(9,707
|
)
|
(6,456
|
)
|
Net loss
|
(5,210,022
|
)
|
(3,496,922
|
)
|
Other comprehensive gain (loss) - translation adjustment
|
61,423
|
|
103,875
|
|
Net comprehensive loss
|
(5,148,599
|
)
|
(3,393,047
|
)
|
Basic and diluted loss per common share
|
(0.04
|
)
|
(0.03
|
)
|
Weighted average number of shares (basic and diluted)
|
121,145,249
|
|
118,121,424
|
|
|
2016
$ |
2015
$ |
||
Clinical trial expenses
|
184,755
|
|
202,214
|
|
Manufacturing and related process development expenses
|
450,149
|
|
185,104
|
|
Intellectual property expenses
|
269,025
|
|
217,097
|
|
Research collaboration expenses
|
177,794
|
|
199,118
|
|
Other R&D expenses
|
2,346,052
|
|
1,291,464
|
|
Scientific research and development refund
|
—
|
|
344
|
|
Foreign exchange (gain)
|
(60,097
|
)
|
(262,150
|
)
|
Share based payments
|
43,507
|
|
166,796
|
|
Research and development expenses
|
3,411,185
|
|
1,999,987
|
|
|
2016
$ |
2015
$ |
||
Clinical trial expenses
|
184,755
|
|
202,214
|
|
|
2016
$ |
2015
$ |
||
Intellectual property expenses
|
269,025
|
|
217,097
|
|
|
2016
$ |
2015
$ |
Research collaboration expenses
|
177,794
|
199,118
|
|
2016
$ |
2015
$ |
||
Share based payments
|
43,507
|
|
166,796
|
|
|
2016
$ |
2015
$ |
||
Public company related expenses
|
911,811
|
|
737,889
|
|
Office expenses
|
813,834
|
|
670,163
|
|
Amortization of property and equipment
|
27,602
|
|
45,668
|
|
Share based payments
|
62,936
|
|
81,305
|
|
Operating expenses
|
1,816,183
|
|
1,535,025
|
|
|
2016
$ |
2015
$ |
||
Cash and cash equivalents
|
12,034,282
|
|
24,016,275
|
|
Short-term investments
|
2,088,800
|
|
2,060,977
|
|
Working capital position
|
10,369,665
|
|
24,214,488
|
|
Contractual Obligations
|
Payments Due by Period
|
|||||||||
|
Total
$
|
Less than 1 year
$
|
2 -3 years
$
|
4 - 5 years
$
|
More than
5 years
$
|
|||||
Capital lease obligations
|
Nil
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Operating lease
(1)
|
517,647
|
|
163,978
|
|
207,026
|
|
146,643
|
|
—
|
|
Purchase obligations
|
1,033,619
|
|
1,033,619
|
|
—
|
|
—
|
|
—
|
|
Other long term obligations
|
Nil
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Total contractual obligations
|
1,551,266
|
|
1,197,597
|
|
207,026
|
|
146,643
|
|
—
|
|
|
US
dollars
$ |
British pounds
£
|
Euro
€
|
|||
Cash and cash equivalents
|
4,629,766
|
|
31,295
|
|
32,565
|
|
Accounts payable
|
(134,059
|
)
|
(10,837
|
)
|
—
|
|
|
4,495,707
|
|
20,458
|
|
32,565
|
|
•
|
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 27, 2017
|
|
Chartered Accountants
|