ONCY Oncolytics Biotech Inc - 10-K

ITEM 1A. RISK FACTORS

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

Research and Development Risks

Our product candidate, pelareorep, is in the research and development stage and will require further development and testing before it can be marketed commercially and obtain necessary regulatory approvals. If we are unable to attain satisfactory results from our development and testing of our product candidate, or if we are unable to market our product effectively, we may be required to abandon further development and testing and develop a new strategy.

Prospects for companies in the biotechnology industry generally may be regarded as uncertain given the nature of the industry and, accordingly, investments in biotechnology companies should be regarded as speculative. Pharmaceutical research and development are highly speculative and involve a high and significant degree of risk. We are currently in the research and development stage on one product, pelareorep, for human application, the riskiest stage for a company in the biotechnology industry. It is not possible to predict, based upon studies in animals and early-stage human clinical trials, whether pelareorep will prove to be safe and effective in humans. Pelareorep will require later-stage and pivotal clinical trials before we will be able to obtain the approvals of the relevant regulatory authorities in applicable countries to market pelareorep commercially. Carrying out later-stage clinical trials and submission of a successful Biologics License Application (“BLA”) or other comparable foreign regulatory submission is a complicated process. We plan to conduct registration-enabling trials for pelareorep over the next several years, which may be a difficult process to manage with our limited resources and which may divert attention of management. We also have limited experience as a company in preparing, submitting and prosecuting regulatory filings and have not previously submitted a BLA or other comparable foreign regulatory submission for pelareorep. In addition, we have had limited interactions with the FDA and cannot be certain how many additional clinical trials of pelareorep will be required or how such trials should be designed. There can be no assurance that the research and development programs we conduct will result in pelareorep or any other products becoming commercially viable products, and in the event that any product or products result from our research and development program, it is unlikely they will be commercially available for a number of years.

To achieve profitable operations we, alone or with others, must successfully develop, introduce and market our product candidate. The marketability of any product we develop will be affected by numerous factors beyond our control, including but not limited to: the discovery of unexpected toxicities or lack of sufficient efficacy of products which make them unattractive or unsuitable for human use; preliminary results as seen in animal and/or limited human testing may not be substantiated in larger, controlled clinical trials; manufacturing costs or other production factors may make manufacturing of products commercially inviable, 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.

To obtain regulatory approvals for products being developed for human use, and to achieve commercial success, human clinical trials must demonstrate that the product is safe for human use and that the product shows efficacy. Unsatisfactory results obtained from a particular study relating to a program may cause us to abandon our commitment to that program or the product being tested. No assurances can be provided that any current or future animal or human test, if undertaken, will yield favorable results. If we are unable to establish that pelareorep is a safe, effective treatment for cancer, we may be required to abandon further development of the product and develop a new business strategy.

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

We must conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidate in humans. Clinical testing, in particular, is expensive, difficult to design and implement, can take many years to complete, and is uncertain as to the outcome. A failure of one or more of our clinical trials can occur at any stage of testing. We may experience numerous

unforeseen events during, or as a result of, the clinical trial process, which could delay or prevent us from receiving marketing approval or commercializing our product candidate, including the following:

• 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;

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

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

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

• The supply, storage, distribution, or quality of our product candidate or other materials necessary to conduct our clinical trials may be insufficient or inadequate.

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

• 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.

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

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

Our product candidate, pelareorep, is being and will continue to be used in combination with other therapies, which exposes us to additional risks. Any failure to maintain or enter into new successful commercial relationships to access such therapies on commercially reasonable terms may delay our development timelines, increase our costs, and jeopardize our ability to further develop our product candidate, which may materially impact our business, financial condition, results of operations, stock price, and prospects.

In our current and planned studies, pelareorep is being or will be administered in combination with other approved cancer therapies, including CPIs. CPIs are a class of drugs intended to stop tumor cells from interfering with the ability of the patient’s immune system to attack their tumor. We have entered into an agreement with Roche to supply its CPIs, atezolizumab, for use in our ongoing Oncolytics-sponsored studies. Specifically, atezolizumab is being used in our ongoing Phase 1/2 study in GI cancer (the GOBLET study). Additionally, we may enter into future agreements for the supply of CPIs for use in connection with the development of pelareorep.

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

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

Moreover, the development of pelareorep for use in combination with other cancer therapies may present risks that are not faced for single–agent product candidates, such as the requirement that we demonstrate the safety, purity, and efficacy of each active component of any combination regimen we may develop. Developments related to the other products may also impact our clinical trials as well as our commercial prospects should we receive marketing approval. Such developments may include changes to the other products’ safety or efficacy profile, changes to the availability of the approved products, and changes to the standard of care.

While we have chosen to test pelareorep in specific clinical indications based in part on our understanding of its mechanisms of action, our understanding may be incorrect or incomplete and, therefore, pelareorep may not be effective against the diseases tested in our clinical trials, which would likely negatively impact our business and results of operations.

Our rationale for selecting the particular therapeutic indications for pelareorep is based in part on our understanding of its mechanism of action. However, our understanding of pelareorep's mechanism of action may be incomplete or incorrect, or the mechanism may not be clinically relevant to the diseases treated. In such cases, pelareorep may prove to be ineffective in the clinical trials for treating those diseases, and adverse clinical trial results would likely negatively impact our business and results of operations.

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

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

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

Our business, including our research and development operations, has been and may continue to be adversely affected by a variety of external factors outside our control that may materially impact our ability to raise capital, current licensing agreements, financial conditions, operations and business.

Over the past several years, general market conditions resulting from high inflation, high interest rates, global supply chain issues, global political conflicts, general economic uncertainty, and other macroeconomic factors, as well as market conditions affecting companies in the life sciences industry in general, have touched elements of our business operations. These events have caused and may continue to cause significant fluctuations in stock markets, global economic activity, including inflation and fluctuating interest rates, and healthcare systems. The scale and duration of these developments remain uncertain and could affect our ability to finance and execute our operations, including our ongoing and planned clinical studies and manufacturing activities. These future developments are highly uncertain, cannot be predicted, and could negatively impact our business.

Current global economic conditions are highly volatile due to a number of reasons, including geopolitical instability, such as the military conflicts between Russia and Ukraine, the conflicts between Israel and Hamas, recent inflation that increased our

operating expenses and disruptions in the capital and credit markets that may reduce our ability to raise additional capital when needed on acceptable terms, if at all.

Emerging international trade relations, new legislation and tariffs may also adversely impact our operations and/or financial condition by limiting or preventing the activities of third parties that we engage, increasing import costs or increasing the cost of our operations. New or increased tariffs, export controls or other trade barriers could result in higher prices for the materials we use and the investigational product candidate we are developing and could materially impact our supply chain and manufacturing costs. Recent congressional legislative actions, proposed executive orders, sanctions, tariffs and other measures discourage contracting with Chinese companies on the development or manufacturing of pharmaceutical products and may restrict trade with China.

Furthermore, the recent inflationary environment related to increased aggregate demand and supply chain constraints has increased our operating expenses and may continue to affect our operating expenses. Economic conditions may also strain our suppliers, possibly resulting in supply disruptions that impact our ongoing clinical trials and other operations. A significant worsening of global economic conditions could materially increase our operating expenses and impact our operations. In addition, any new or prolonged downturn of global economic conditions could harm our business operations, and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

Our product candidate may cause undesirable side effects, adverse reactions or have other properties that could delay or prevent its regulatory approval, limit the commercial profile of an approved label, require appropriate medical personnel training to recognize or manage side effects, or result in significant negative consequences following any potential marketing approval, which may significantly harm our business, financial condition, prospects and reputation.

Treatment with our product candidate may produce side effects or adverse reactions or events, including potential adverse side effects related to cytokine release, and may exacerbate known adverse events associated with co-administered approved products. There can be no assurance that undesirable side effects or serious adverse events will not be caused by or associated with pelareorep as it continues through its clinical development, including when co-administered with approved products. If our product candidate or similar products or product candidates under development by third parties demonstrate unacceptable adverse events or unacceptably exacerbate adverse events associated with co-administered approved products, we may be required to halt or delay further clinical development of our product candidate. The FDA, the EMA, or other foreign regulatory authorities could order us to cease further development of or deny approval of our product candidate for any or all targeted indications.

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

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

• regulatory authorities may withdraw approvals of such product;

• regulatory authorities may require additional warnings on the label;

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

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

• our reputation may suffer.

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

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

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

We may not be able to secure a partnership for pelareorep, which could halt future development.

We are seeking a partner to continue the clinical development and commercialization of pelareorep. We do not have the financial resources to complete the necessary development work internally, and should we not be able to secure a partnership, future development of pelareorep may not continue.

We may not achieve our projected development milestones in the time frames we announce and expect, which could have a material adverse effect on our business, financial condition, and results of operations.

We set goals for and make public statements regarding the expected timing of the accomplishment of objectives material to our success, such as the commencement and completion of clinical trials, the submission of a drug-regulatory application, and the expected costs to develop our product candidate. The actual timing and costs of these events can vary dramatically due to factors within and beyond our control, such as delays or failures in our IND submissions or clinical trials, issues related to the manufacturing of drug supplies, uncertainties inherent in the regulatory approval process, market conditions and interest by partners in our product candidate, among other things. Our clinical trials may not be completed, we may not make regulatory submissions or receive regulatory approvals as planned, or we may not secure partnerships for any of our product candidate. Any failure to achieve one or more of these milestones as planned would have a material adverse effect on our business, financial condition, and results of operations.

Financial Condition Risks

There is substantial doubt that we can remain a going concern over the next twelve months. We will require substantial additional funding, which may not be available on acceptable terms or at all, and failure to obtain this necessary capital may force us to reduce or eliminate our planned expenditures to extend our operating runway.

These consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, these consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should we be unable to continue as a going concern. Such adjustments could be material and could significantly impact our reported financial position and results of operations.

We have not been profitable since our inception and expect to continue to incur substantial losses as we continue research and development efforts. We do not expect to generate significant revenues until and unless pelareorep becomes commercially viable. These factors raise substantial doubt about our ability to continue as a going concern over the next 12 months from the date of issuance of our consolidated financial statements included in this Annual Report. Our ability to continue as a going concern is dependent upon raising additional financing. There can be no assurance that additional liquidity will be available under acceptable terms or at all. Furthermore, if we are unable to obtain additional financing when required, there can be no assurance that we will be able to sufficiently reduce or eliminate our planned expenditures to extend our operating runway.

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

We are a clinical-stage biopharmaceutical company. We have incurred significant losses since our inception. To date, we have not generated sufficient revenues to offset our research and development costs and, accordingly, have not generated positive cash flow or made an operating profit. As of December 31, 2025, we had an accumulated deficit of $429.5 million and we incurred net losses of $28.8 million and $22.8 million for the years ended December 31, 2025 and 2024, respectively. We anticipate that we will continue to incur significant losses in the foreseeable future. The amount of future net losses will depend, in part, on the rate at which our expenses increase and our ability to generate revenue. Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, if at all, we will be able to achieve profitability. Even if our product candidate becomes profitable, the initial losses incurred by us may never be recovered.

We will need additional financing in the future to fund the research and development of our product candidate and to meet our ongoing capital requirements. Raising such funds is dependent on numerous factors outside of our control, and if we are not able to raise such funding, or achieve funding on terms favorable to us or our existing shareholders, we may have to reduce substantially or eliminate expenditures for research and development, testing, production, and marketing of our proposed product, or obtain funds through arrangements with corporate partners that require us to relinquish rights to certain of our technologies or product.

As of December 31, 2025, we had cash and cash equivalents of $5.2 million. We anticipate that we will need additional financing in the future to fund research and development and to meet our ongoing capital requirements. The amount of future capital requirements will depend on many factors, including continued scientific progress in our drug discovery and development programs, progress in our preclinical and clinical evaluation of drug candidates, time and expense associated with filing, prosecuting, and enforcing our patent claims, and costs associated with obtaining regulatory approvals. In order to meet such capital requirements, we will consider contract fees, collaborative research and development arrangements, and additional public or private financings, including the incurrence of debt and the issuance of additional equity securities, to fund all or a part of particular programs, as well as potential partnering or licensing opportunities.

We, from time to time, along with all of our other pharmaceutical research and development entities, may have restricted access to capital, bank debt, and equity and, from time to time, may face increased borrowing costs. Although our business and asset base have not changed, the lending capacity of all financial institutions fluctuates, causing a corresponding change in risk premiums. As future operations will be financed out of funds generated from financing activities, our ability to do so is dependent on, among other factors, the overall state of capital markets and investor appetite for investments in the pharmaceutical industry in general and for our securities in particular.

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

We may not be able to adequately price our product or obtain third-party reimbursement for the cost of our product, which would adversely affect our sales and profitability.

The healthcare industry is subject to significant regulatory reforms and cost containment pressures that could materially affect our business. In the U.S., there has been increasing legislative and regulatory focus on controlling pharmaceutical pricing. At the federal level, Congress passed the Inflation Reduction Act of 2022 (the “IRA”), which includes provisions that authorize the Secretary of Health and Human Services to negotiate prices with pharmaceutical companies for certain high-expenditure, single-source drugs covered under Medicare Part B or Part D programs, and provisions that impose rebates under Medicare Part B or Part D to penalize price increases that outpace inflation. The IRA also implements changes to the Medicare Part D benefit structure, including capping annual out-of-pocket costs for beneficiaries, which shifts program liabilities from patients to other stakeholders, including manufacturers. The One Big Beautiful Bill Act enacted in 2025 imposes new restrictions on government healthcare program funding and on individual eligibility for coverage under those programs, which may lead to lower reimbursements for drugs covered by those programs. Additional federal actions include an executive order directing implementation of a “Most Favored Nation” drug pricing policy designed to bring prices for U.S. patients in line with those in comparably developed nations.

At the state level, legislatures are increasingly passing laws designed to control pharmaceutical pricing, including price constraints, transparency measures, and establishing Prescription Drug Affordability Boards (or similar entities) to review high-cost drugs and set upper payment limits. Outside of the U.S., drug pricing and reimbursement are often subject to government control. Reimbursement approvals must generally be obtained on a country-by-country basis, and some countries set prices by reference to prices in other countries or restrict reimbursement based on cost-effectiveness assessments. Governmental authorities in many countries may also reduce prices for approved drug products from previously established prices. In addition, government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels. These government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. Uncertainty exists regarding the reimbursement status of newly-approved pharmaceutical products and reimbursement may not be available for pelareorep. Any reimbursements granted may not be maintained or limits on reimbursements available from third-party payors may reduce the demand for, or negatively affect the price of, these products. These cost containment measures could result in additional downward pressure on the prices that we may receive for pelareorep, if approved. If pelareorep pricing is set

at unsatisfactory levels, or if pelareorep does not qualify for reimbursement, if reimbursement levels diminish, or if reimbursement is denied, our sales and profitability would be adversely affected.

We may be exposed to third-party credit risks through our contractual arrangements. Failure to meet contractual obligations could have a material adverse effect on our business and operations.

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

We incur some of our expenses in foreign currencies and, therefore, we are exposed to foreign currency exchange rate fluctuations, which may have a material adverse effect on our financial condition and results of operations.

We incur some of our research and development and general and administrative expenses in foreign currencies. Foreign exchange risk arises from changes in foreign exchange rates that may affect the fair value or future cash flows of our financial assets or liabilities. We are primarily exposed to the risk of changes in the Canadian dollar relative to the U.S. dollar and Euro as a portion of our financial assets and liabilities were denominated in such currencies. We are, therefore, exposed to foreign currency rate fluctuations, which may have a material adverse effect on our financial condition and results of operations. Also, as we expand to other foreign jurisdictions, there may be an increase in our foreign exchange exposure.

Regulatory Risks

Pharmaceutical products are subject to intense regulatory approval processes. Failure to comply with applicable regulatory requirements can, among other things, result in suspension of regulatory approvals, product recalls, seizure of products, operating restrictions, and criminal prosecution.

Prior to obtaining approval to commercialize a product candidate in the United States or abroad, we must demonstrate with substantial evidence from adequate and well-controlled clinical trials, and to the satisfaction of the FDA or comparable foreign regulatory authorities, that such product candidates are safe and effective for their intended uses, and in the case of biological products in the United States, that such product candidates are safe, pure and potent for their intended uses. Results from nonclinical studies and clinical trials can be interpreted in different ways. Even if we believe available nonclinical or clinical data support the safety, purity, and potency (or efficacy) of our product candidates, such data may not be sufficient to obtain approval from the FDA and comparable foreign regulatory authorities. The FDA or comparable foreign regulatory authorities, as the case may be, may also require us to conduct additional preclinical studies or clinical trials for our product candidates either prior to or post-approval, or may object to elements of our clinical development program.

• The FDA or comparable foreign regulatory authorities can delay, limit or deny approval of a product candidate for many reasons, including:

• such authorities may disagree with the design or execution of our clinical trials;

• negative or ambiguous results from our clinical trials or results may not meet the level of statistical significance or persuasiveness required by the FDA or comparable foreign regulatory agencies for approval;

• serious and unexpected drug-related side effects may be experienced by participants in our clinical trials or by individuals using drugs similar to our product candidates;

• the population studied in the clinical trial may not be sufficiently broad or representative to assure safety in the full population for which we seek approval;

• such authorities may not accept clinical data from trials that are conducted at clinical facilities or in countries where the standard of care is potentially different from that of their own country;

• we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

• such authorities may not agree that the data collected from clinical trials of our product candidates are acceptable or sufficient to support the submission of a BLA or other submission or to obtain regulatory approval in the United States or elsewhere, and such authorities may impose requirements for additional preclinical studies or clinical trials;

• such authorities may disagree with us regarding the formulation, labeling and/or the product specifications of our product candidates;

• approval may be granted only for indications that are significantly more limited than those sought by us, and/or may include significant restrictions on distribution and use;

• such authorities may find deficiencies in the manufacturing processes or facilities of the third-party manufacturers with which we contract for clinical and commercial supplies; or

• such authorities may not accept a submission due to, among other reasons, the content or formatting of the submission.

Moreover, if regulatory approval of a drug is granted, such approval may entail limitations on the indicated uses for which it may be marketed. Failure to comply with applicable regulatory requirements can, among other things, result in suspension of regulatory approvals, product recalls, seizure of products, operating restrictions, and criminal prosecution. Further, government policy may change, and additional government regulations may be established that could prevent or delay regulatory approvals for our products. In addition, a marketed drug and its manufacturer are subject to continual review. Later discovery of previously unknown problems with the product or manufacturer may result in restrictions on such product or manufacturer, including withdrawal of the product from the market.

Product approvals may be withdrawn if compliance with regulatory standards is not maintained or if problems occur after the product reaches the market. The FDA and similar regulatory authorities in other countries may require further testing and surveillance programs to monitor the pharmaceutical product that has been commercialized. Noncompliance with applicable requirements can result in fines and other judicially imposed sanctions, including product withdrawals, product seizures, injunction actions, and criminal prosecutions.

The FDA and other governmental regulators have increased requirements for drug purity and have increased environmental burdens upon the pharmaceutical industry. Because pharmaceutical drug manufacturing is a highly regulated industry, requiring significant documentation and validation of manufacturing processes and quality control assurance prior to the approval of the facility to manufacture a specific drug, our manufacturing facilities may never become approved for the manufacture of our product candidate, or there can be considerable transition time between the initiation of a contract to manufacture a product and the actual initiation to manufacture that product. Any lag time in the initiation of a contract to manufacture products and the actual initiation of manufacturing could cause us to lose profits or incur liabilities.

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

The design or execution of our clinical trials may not support regulatory approval.

The design or execution of a clinical trial can determine whether its results will support regulatory approval and flaws in the design or execution of a clinical trial may not become apparent until the clinical trial is well advanced. In some instances, there can be significant variability in safety or efficacy results between different trials of the same product candidate due to numerous factors, including changes in trial protocols, differences in size and type of patient populations, adherence to the dosing regimen and other trial protocols and the rate of dropout among clinical trial participants. We do not know whether any Phase 2, Phase 3, or other clinical trials that we may conduct will demonstrate consistent or adequate efficacy and safety to obtain regulatory approval to market our product candidate.

Further, the FDA and comparable foreign regulatory authorities will have some discretion in the approval process and in determining when or whether regulatory approval will be obtained for any of our product candidate. Our product candidate may not be approved even if they achieve their primary endpoints in future registration trials. The FDA or other regulatory authorities may disagree with our trial design and our interpretation of data from preclinical studies and clinical trials. In addition, any of these regulatory authorities may change requirements for the approval of a product candidate even after reviewing and providing comments or advice on a protocol for a pivotal registration clinical trial that has the potential to result in approval by the FDA or another regulatory agency. In addition, any of these regulatory authorities may also approve a product candidate for fewer or more limited indications than we request or may grant approval contingent on the performance of costly post-marketing clinical trials. The FDA or other regulatory authorities may not approve the labeling claims that we believe would be necessary or desirable for the successful commercialization of our product candidate.

Our operations and product candidate are subject to other government regulations in many jurisdictions, including manufacturing and testing regulations.

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

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

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

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

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

In addition, the ability of the FDA and other regulatory authorities to review and approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s or other regulatory authorities’ ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s or other regulatory authorities’ ability to perform routine functions. Average review times at the FDA and other regulatory authorities have fluctuated in recent years as a result. If a prolonged government shutdown occurs, or if funding shortages, staffing limitations or similar factors hinder or prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, such events could significantly impact the ability of the FDA or other such regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

We have conducted, and may in the future conduct, clinical trials for pelareorep in sites outside the U.S. and the FDA may not accept data from trials conducted in such locations, which would be costly and time-consuming for us and cause delay or permanently halt our development of pelareorep.

We have conducted, and may in the future choose to conduct, clinical trials outside the U.S. The acceptance of study data from clinical trials conducted outside the U.S. or another jurisdiction by the FDA or comparable foreign regulatory authority may be subject to certain conditions or may not be accepted at all. In cases where data from foreign clinical trials are intended to serve as the sole basis for regulatory approval in the U.S., the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the U.S. population and U.S. medical practice; (ii) the trials were performed by clinical investigators of recognized competence and pursuant to GCP regulations; and (iii) the data may be considered valid without the need for an on-site inspection by the FDA, or if the FDA considers such inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means. In addition, even where the foreign study data are not intended to serve as the sole basis for approval, if the study was not otherwise subject to an IND, the FDA will not accept the data as support for an application for regulatory approval unless the study is well-designed and well-conducted in accordance with GCP requirements and the FDA is able to validate the data from the study through an onsite inspection if deemed necessary. Many foreign regulatory authorities have similar requirements for clinical data gathered outside of their respective jurisdictions. In addition, such foreign trials would be subject to the applicable local laws of the foreign jurisdictions where the trials are conducted. There can be no assurance that the FDA or any comparable foreign regulatory authority will accept data from trials conducted outside of the U.S. or the relevant jurisdiction. If the FDA or any comparable foreign regulatory authority does not accept such data, it may result in the need for additional trials, which could be costly and time-consuming, and which may result in current or future product candidates that we may develop not receiving approval for commercialization in the applicable jurisdiction.

A Fast Track designation from the FDA, even if granted, may not lead to a faster development, regulatory review, or approval process, and does not increase the likelihood that our product candidate will receive marketing approval.

We have received Fast Track designations for the treatment of second-line KRAS-mutant MSS mCRC, advanced/metastatic unresectable PDAC using pelareorep in combination with atezolizumab, gemcitabine, and nab-paclitaxel, and for the treatment of mBC using pelareorep in combination with paclitaxel. We may seek additional Fast Track designations for our other programs. Fast Track designation is designed to facilitate the development and expedite the review of therapies to treat serious

conditions and fill an unmet medical need. A clinical program that receives Fast Track designation may benefit from more frequent meetings and communications with the FDA to discuss development plans and ensure the collection of appropriate data needed to support approval.

The FDA has broad discretion on whether or not to grant Fast Track designation. Even if we believe a particular program is eligible for this designation, we cannot assure you that the FDA would decide to grant it. Although we have received Fast Track designations for pelareorep, and even if we receive additional Fast Track designations for our product candidate related to testing in additional indications, we may not experience a faster development process, review or approval compared to conventional FDA procedures. The FDA may also withdraw Fast Track designation if it believes that the designation is no longer supported by data from our clinical development program. Furthermore, such a designation does not increase the likelihood that pelareorep will receive marketing approval in the U.S. Many product candidates that have received Fast Track designation have ultimately failed to obtain approval.

We may attempt to secure approval from the FDA through the use of the accelerated approval pathway. If we are unable to obtain such approval, we may be required to conduct additional clinical trials beyond those that we contemplate, which could increase the expense of obtaining, and delay the receipt of, necessary regulatory approvals. Even if we receive accelerated approval from the FDA, if our confirmatory trials do not verify clinical benefit, or if we do not comply with rigorous post-marketing requirements, the FDA may seek to withdraw any accelerated approval we have obtained.

We may in the future seek an accelerated approval for pelareorep. Under the accelerated approval program, the FDA may grant accelerated approval to a product candidate designed to treat a serious or life-threatening condition that provides meaningful therapeutic benefit over available therapies upon a determination that such product candidate has an effect on a surrogate endpoint or intermediate clinical endpoint that is reasonably likely to predict clinical benefit.

The FDA considers a clinical benefit to be a positive therapeutic effect that is clinically meaningful in the context of a given disease, such as irreversible morbidity or mortality. For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign, or other measure, that is thought to predict clinical benefit, but is not itself a measure of clinical benefit. An intermediate clinical endpoint is a measurement in a clinical trial that can be measured earlier than an effect on irreversible morbidity or mortality that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit. The accelerated approval pathway may be used in cases in which the advantage of a new drug over available therapy may not be a direct therapeutic advantage, but is a clinically important improvement from a patient and public health perspective. If granted, accelerated approval is usually contingent on the sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verify and describe the drug’s clinical benefit. If such confirmatory studies fail to confirm the drug’s clinical benefit or are not completed in a timely manner, the FDA may withdraw its approval of the drug on an expedited basis. In addition, the United States Food and Drug Omnibus Reform Act of 2022 provided the FDA statutory authority to mitigate potential risks to patients from continued marketing of ineffective drugs previously granted accelerated approval, and additional oversight over confirmatory trials. Under these provisions, the FDA may, among other things, require a sponsor of a product seeking accelerated approval to have a confirmatory trial underway prior to such approval being granted.

There can be no assurance that after our evaluation of FDA feedback and other factors, we will decide to pursue or submit a BLA for accelerated approval or obtain any other form of expedited development, review, or approval. Furthermore, if we decide to submit an application for accelerated approval for pelareorep, there can be no assurance that such submission or application will be accepted or that any expedited development, review, or approval will be granted on a timely basis, or at all. The FDA could also require us to conduct further studies prior to considering our application or granting approval of any type. A failure to obtain accelerated approval or any other form of expedited development, review, or approval for pelareorep would result in a longer time period to commercialization of such product candidate, if any, could increase the cost of development of such product candidate, and could harm our competitive position in the marketplace.

Changes in tax laws or regulations, or differing interpretations of tax laws, could adversely affect our business, financial condition, and results of operations.

We are subject to income tax and other taxes in the U.S., Canada and other jurisdictions in which we operate. New tax laws or regulations could be enacted at any time, and existing laws could be interpreted or applied in a manner adverse to us. In recent years, significant changes have been made to tax laws in multiple jurisdictions. For example, the Tax Cuts and Jobs Act of 2017 requires taxpayers to capitalize and amortize research and development expenditures over five years for U.S. activities and 15 years for foreign activities, rather than deducting them in the year incurred. In addition, the OECD’s “Base Erosion and Profit Shifting” project (BEPS 2.0 or Pillar Two) could result in a 15% global minimum tax on profits of large multinational enterprises, though uncertainty exists regarding U.S. participation following executive action in January 2025.

Changes to the U.S. Internal Revenue Code of 1986, as amended (the “Code”) and related rules and regulations promulgated thereunder, or other changes in laws, rules and regulations in other jurisdictions in which we operate, could adversely affect our ability to utilize certain tax attributes or deductions, our effective tax rate and/or future tax planning for Oncolytics and its subsidiaries, and any such changes could have prospective or retroactive application to us and/or our shareholders. Significant judgment is required in evaluating our tax positions, and the final determination of any tax audits or litigation could be materially different from our historical tax provisions, which could adversely affect our financial condition and results of operations.

Failure to meet regulatory or ethical expectations on environmental impact, including climate change, could adversely affect our business, financial condition, results of operations, cash flows, and prospects.

We believe that environmental issues may continue to become more material in the marketplace as the wider healthcare system embraces net-zero climate targets. The environmental targets and performance of our business may come under increased scrutiny by investors, governments, and non-governmental organizations. Environmental considerations are starting to become embedded in the public procurement of goods and services, including medicinal products and devices. Specific intermediates used to manufacture medicines, or those used as excipients or propellants, are coming under increased regulation and some may be subject to time-limited exemptions or potential phase-out. These developments could increase our operating and compliance costs and affect our ability to qualify for, obtain, or maintain required permits, registrations, or approvals. We also face transition risks as laws, regulations, and market expectations evolve, including potential carbon pricing or taxes, expanded emissions‑disclosure requirements, required upgrades to facilities or utility systems, and higher electricity and energy costs. Our suppliers may be subject to similar requirements and may pass increased costs to us.

In addition, the physical impacts of climate change could impact the resilience of our business operations and supply chain. Acute and chronic weather-related events (for example, storms, flooding, wildfires, heat waves, and drought) may damage facilities, disrupt utilities and logistics, and affect suppliers and partners, which could lead to delays, higher costs, and insurance impacts. The cumulative effect of these factors could be material and adversely affect our business, financial condition, results of operations, cash flows, and prospects.

Intellectual Property Risks

We rely on patents and proprietary rights to protect our technology. We cannot be assured that patents will be issued or that any patents issued to, or licensed by us, will not be challenged, invalidated, infringed, or circumvented, or that the rights granted thereunder will provide continuing competitive advantages to us if we are unable to enforce from use by competitors.

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

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

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

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

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

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

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

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

In addition to patented technology, we rely upon unpatented proprietary technology, processes, and know-how. However, these types of trade secrets can be difficult to protect, and we may not be successful in protecting our trade secrets and confidential information.

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

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

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

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

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

Intellectual property rights are limited and do not necessarily address all potential threats to our business that could materially affect our financial condition, results of operations, and prospects.

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

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

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

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

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

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

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

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

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

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

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

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

From time to time, authorities in the U.S., the European Union, and other government authorities may change the standards of patentability, and any such changes could have a negative impact on our business. For example, in the U.S., the Leahy-Smith America Invents Act (the “America Invents Act”) included a number of significant changes to U.S. patent law. These changes included a transition from a “first-to-invent” system to a “first-to-file” system, changes to the way issued patents are challenged, and changes to the way patent applications are disputed during the examination process. As a result of these changes, patent law in the U.S. may favor larger and more established companies that have greater resources to devote to patent application filing and prosecution. The U.S. Patent and Trademark Office (the “USPTO”) has developed new and untested regulations and procedures to govern the full implementation of the America Invents Act, and many of the substantive changes to patent law associated with the America Invents Act, and, in particular, the first-to-file provisions became effective on March 16, 2013. Substantive changes to patent law associated with the America Invents Act may affect our ability to obtain patents, and if obtained, to enforce or defend them. Also, case law may have a substantial impact on the way patents are prosecuted, examined, and litigated. This also affects the scope of protection that is available in a specific jurisdiction.

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

Our success depends on our ability to obtain and maintain protection for our intellectual property and our proprietary technologies and to avoid infringing the rights of others.

Our commercial success depends in part on our ability to obtain and maintain patent, trademark, trade secret, and other intellectual property protection for our product candidate and proprietary technologies, as well as our ability to operate without infringing upon the proprietary rights of others.

We have applied, and we intend to continue applying, for patents covering important aspects of our product candidate, proprietary technologies and their uses as we deem appropriate. However, the patent prosecution process is expensive, time-consuming and complex, and we may not be able to apply for patents on certain aspects of our current or future product candidates and proprietary technologies in a timely fashion, at a reasonable cost, in all jurisdictions, or at all. Our patent applications cannot be enforced against third parties unless, and until, patents are issued from such applications. Even after such patents are issued, the patents can only be enforced to the extent that the issued claims cover the invention as claimed. The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we or any of our actual or potential future collaborators or licensors will be successful in protecting our product candidate and proprietary technologies by obtaining and defending patents.

If we cannot adequately obtain, maintain and enforce our intellectual property rights and proprietary technology, competitors may be able to use our technologies or the goodwill we have acquired in the marketplace and erode or negate any competitive advantage we may have and our ability to compete, which could harm our business and ability to achieve profitability and/or cause us to incur significant expenses. Failure to obtain, maintain and/or enforce intellectual property rights necessary to our business and failure to protect, monitor and control the use of our intellectual property rights could negatively impact our ability to compete and cause us to incur significant expenses. The intellectual property laws and other statutory and contractual arrangements in the U.S. and other jurisdictions we depend upon may not provide sufficient protection in the future to prevent the infringement, use, violation or misappropriation of our patents, trademarks, data, technology and other intellectual property rights and products by others, and may not provide an adequate remedy if our intellectual property rights are infringed, misappropriated or otherwise violated by others.

Other Business Risks

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

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

Moreover, we face increased competition from other companies that are using AI in drug discovery and development. Some competitors may be able to more quickly and effectively identify and develop novel product candidates compared to us and our business partners, which could impair our ability to compete effectively and have a material adverse effect on our business, results of operations and financial condition.

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

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

Our product candidate may fail or cause harm, subjecting us to product liability claims that we may not adequately be protected against.

Use of our product during current clinical trials may entail the risk of product liability. Our clinical trial liability insurance may not provide full protection against all risks. Given the scope and complexity of the clinical development process, the uncertainty of product liability litigation, and the shrinking capacity of insurance underwriters, it is not possible at this time to assess the adequacy of current clinical trial coverage, nor the ability to secure continuing coverage at the same level and at reasonable cost in the foreseeable future.

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

We will likely partner with or rely on third parties to market our product. Failure to successfully market our product would have a material adverse effect on our revenue.

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

• 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.

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

Interim, “top-line” and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data. If the interim, top-line, or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, pelareorep may be harmed, which could harm our business, operating results, prospects, or financial condition.

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

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

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

is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure.

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

Our product candidate, or the introduction of new products, may require new technologies, including new manufacturing processes, and the emergence of new industry standards may render our product and technologies obsolete, less competitive, or less marketable, which may have a material adverse effect on our business.

The pharmaceutical industry is characterized by rapidly changing markets, technology, emerging industry standards, and frequent introduction of new products. The introduction of new products embodying new technologies, including new manufacturing processes, and the emergence of new industry standards may render our product and technologies obsolete, less competitive, or less marketable. The process of developing our product is extremely complex and requires significant continuing development efforts, and third-party commitments. Production and utilization of our product may require the development of new manufacturing technologies and expertise. The impact on our business in the event that new manufacturing technologies and expertise are required to be developed is uncertain. There can be no assurance that we will successfully meet any of these technological challenges or others that may arise in the course of development. Our failure to develop new technologies and products and the obsolescence of existing technologies could adversely affect our business.

We may be unable to anticipate changes in our potential customer requirements that could make our existing technology obsolete. Our success will depend, in part, on our ability to continue to enhance our existing technologies, develop new technology that addresses the increasing sophistication and varied needs of the market, and respond to technological advances and emerging industry standards and practices on a timely and cost-effective basis. The development of our proprietary technology entails significant technical and business risks. We may not be successful in using our new technologies or exploiting our niche markets effectively, or adapting our businesses to evolving customer or medical requirements or preferences or emerging industry standards.

Changes in methods of pelareorep manufacturing or formulation may result in additional costs or delay, and may jeopardize our ability, or our strategic partners’ ability, to commence product sales and generate revenue.

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

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

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

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

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

We rely on third parties to produce and provide suitable raw materials for pelareorep production, packaging, and testing. If we are unable to arrange for sufficient supply or if materials are not available in a timely manner or on commercially reasonable terms, that could delay or impair our ability to manufacture pelareorep or complete product or clinical sample testing.

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

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

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

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

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

If any of our clinical trial sites terminate for any reason, we may experience the loss of follow-up information on patients enrolled in our ongoing clinical trials unless we are able to transfer the care of those patients to another qualified clinical trial site. Further, if our relationship with any of our CROs is terminated, we may be unable to enter into arrangements with

alternative CROs on commercially reasonable terms, or at all. As a result, delays may occur, which can materially impact our ability to meet our desired clinical development timelines.

We are subject to the restrictions and conditions of the PanCAN Therapeutic Accelerator Award Agreement. Failure to comply with this agreement may adversely affect our financial condition and results of operations.

We received a grant from PanCAN to fund a Phase 1/2 pancreatic cancer study investigating pelareorep in combination with modified FOLFIRINOX. If we are found to have used any grant proceeds for purposes other than intended or is in violation of the terms of the grant, then we may be required to repay the grant proceeds received. A failure to maintain compliance with the grant may require us to reimburse all or a portion of the PanCAN grant, which may cause a halt or delay in ongoing operations, which may adversely affect our financial condition and operating results.

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

The commercial success of pelareorep depends in part on public acceptance of the use of cancer immunotherapies, and in particular, viral immunotherapy. Adverse events in clinical trials of pelareorep or in clinical trials of similar products and the resulting publicity, as well as any other negative developments in the field of immuno-oncology that may occur in the future, including in connection with competitor therapies, could result in decreased acceptance of and demand for pelareorep. These events could also result in the suspension, discontinuation, or clinical hold of or modification to our clinical trials. If public perception is influenced by claims that the use of viral immunotherapies are unsafe, whether related to pelareorep or to competitors’ products, pelareorep may not be accepted by the general public or the medical community, and potential clinical trial participants may be discouraged from enrolling in our trials. In addition, responses by national or state governments to negative public perception may result in new legislation or regulations that could limit our ability to develop or commercialize any product candidate, obtain or maintain regulatory approval or otherwise achieve profitability. More restrictive statutory regimes, government regulations, or negative public opinion would have an adverse effect on our business, financial condition, results of operations and prospects and may delay or impair the development and commercialization of pelareorep or demand for any product we may develop. As a result, we may not be able to continue or may be delayed in conducting our development programs.

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

We may experience difficulties in expanding our operations successfully and managing future growth, which could negatively affect our business, operations and prospects.

Our future financial performance and our ability to commercialize pelareorep and compete effectively will depend, in part, on our ability to successfully expand our operations and manage any future growth, which could result from advancements in pelareorep and potential other future product candidates, conducting an increased number of clinical trials (including across multiple indications and jurisdictions), and entry into and management of a larger number of relationships with third parties and collaborators. Our ability to manage our growth effectively will require us to continue to implement and improve our operational, financial and management systems. We will need to expand, train and motivate our employee base, and select, contract with, monitor and coordinate an expanded group of third parties and collaborators. This will likely result in higher operating expenses, as well as increased external spend and contractual obligations associated with additional clinical trials and collaborations. As our pipeline and clinical trial count increase, we may experience delays in clinical trial initiation or enrollment, protocol deviations, higher costs, data integrity or quality issues, manufacturing or supply interruptions, or challenges meeting regulatory requirements across geographies. There can be no assurance that we will be able to manage such growth effectively, that our management, personnel, or systems will be adequate to support our operations, that our third parties and collaborators will perform as expected, comply with applicable contractual and regulatory requirements, or continue their engagements or that we will be able to achieve the ability to generate the levels of funding commensurate with the increased levels of operating expenses associated with this growth. Inability to deal with this growth could have a material adverse impact on our business, operations and prospects.

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

We are subject to complex laws and regulations that address privacy and data security. The legislative and regulatory landscape for data protection continues to evolve, and in recent years there has been an increasing focus on privacy and data security issues. In the U.S., numerous federal and state laws and regulations, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws, govern the collection, use, disclosure, and protection of health-related and other personal information. For example, on January 1, 2020, the State of California enacted the California Consumer Privacy Act of 2018 (the “CCPA”), which provided new data privacy rights for consumers and new operational requirements for companies, which may increase our compliance costs and potential liability. The CCPA gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. Further, the California Privacy Rights Act (the “CPRA”), which generally went into effect on January 1, 2023, significantly amends the CCPA. It imposes additional data protection obligations on covered companies doing business in California, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data. It also created a new California data protection agency specifically tasked to issue substantive regulations and enforce the CCPA and CPRA, which has increased regulatory scrutiny of covered businesses in the areas of data protection and security. Additional compliance investment and potential business process changes may also be required. Similar laws have passed in other states, and continue to be proposed at the state and federal level, reflecting a trend toward more stringent privacy legislation in the U.S. The enactment of such laws could have potentially conflicting requirements that would make compliance challenging.

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

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

In March 2022, the U.S. and European Union announced a new regulatory regime intended to replace the invalidated regulations. In October 2022, President Biden signed an Executive Order on ‘Enhancing Safeguards for United States Signals Intelligence Activities’ which introduced new redress mechanisms and binding safeguards to address the concerns raised by the Court of Justice of the European Union in relation to data transfers from the European Economic Area (“EEA”) to the U.S. and which formed the basis of the new EU-US Data Privacy Framework (“DPF”), as released in December 2022. The European Commission adopted its Adequacy Decision in relation to the DPF in July 2023, rendering the DPF effective as a GDPR transfer mechanism to U.S. entities self-certified under the DPF. To the extent we are unable to transfer personal data between and among regions in which we operate or intend to operate as a result of regulatory authorities issuing further guidance on personal data export mechanisms, including circumstances where the standard contractual clauses cannot be used, and/or start taking enforcement action, it could affect the manner in which we operate and could adversely affect our financial results.

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

Our operations, results of operations, financial condition and reputation may be materially impacted by significant disruptions to our IT systems or those of any of our CROs, manufacturers, other contractors or consultants or potential future collaborators, including disruptions from cybersecurity breaches of our IT infrastructure.

We rely on IT networks and systems, including those of third-party service providers, to support critical operations and to process, transmit, and store confidential information, such as personally identifiable information and proprietary business data. In particular, we depend on our IT infrastructure for a variety of functions, including financial reporting, data management, and email communications. All IT systems are vulnerable to outages due to fire, floods, power loss, telecommunications failures, terrorist attacks, sabotage, cyberattacks and similar events.

The evolving cybersecurity risks that threaten the confidentiality, integrity, and availability of our IT systems and confidential information include diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, as well as diverse attack vectors, such as social engineering/phishing, malware (including ransomware), malfeasance by insiders, human or technological error, and as a result of bugs, misconfigurations or exploited vulnerabilities in software or hardware. The ever-increasing use and evolution of technology, including cloud-based computing and AI, creates new and potentially unknown security vulnerabilities and risk.

A significant cyberattack or incident that impacts the availability, integrity or confidentiality of our IT systems or confidential data could cause serious business interruption, information theft of confidential information, or reputational damage due to, among other things, industrial espionage attacks, malware or other cyberattacks, any of which could lead to legal claims or proceedings (such as class actions), regulatory investigations and enforcement actions, fines and penalties, negative reputational impacts that cause us to lose existing or future customers, and/or significant incident response, system restoration or remediation and future compliance costs.

Despite the implementation of network security measures and disaster recovery plans, our IT systems, and those of third parties on which we rely, remain vulnerable to cyberattacks and other security incidents. If we or our vendors are unable, or are perceived as unable, to prevent such outages and breaches, our operations, results of operations, financial condition and reputation may be materially impacted. Because we make extensive use of third party service providers, significant cyberattacks that disrupt or compromise third-party IT systems could materially impact our operations and results.

We expect that cybersecurity risks and threats will accelerate for the foreseeable future due to the rapidly evolving nature and sophistication of these threats. Threat actors are also increasingly using techniques and tools, including AI, that circumvent controls, evade detection and even remove forensic evidence. As a result, there is no guarantee that we can effectively detect, respond recover from future attacks or incidents, or avoid a material adverse impact to our systems, confidential data or business. Our cyber liability insurance may not be sufficient to cover the financial, legal, business, or reputational losses that may result from an interruption or breach of our systems.

Use of AI could give rise to legal and regulatory risk and liability, breaches of data security and privacy, and loss of trade secrets or other intellectual property.

We, directly or through third parties that we rely on, may adopt, use or incorporate AI technology and capabilities into the IT systems or software that we use in our business and operations. The regulatory framework for AI technologies is rapidly evolving as many federal, state and foreign government bodies and agencies have introduced or are currently considering laws and regulations to ensure the ethical use, privacy, and security of AI solutions and the data processed thereby. In addition, existing laws and regulations may be interpreted in ways that would affect the use of AI in our business. The misuse of AI solutions in contravention of these laws and regulations, our internal policies, other applicable laws, such as data protection laws, or contractual requirements may give rise to legal and regulatory risk and liability, lead to the loss of trade secrets or other intellectual property, result in reputational harm, or lead to outcomes with unintended biases or other consequences. The misuse of AI solutions could also result in unauthorized access and use of personal data of our employees, clinical trial participants, collaborators, or other third parties. Any of these events could have a material adverse effect on our business, competitive position, financial condition and results of operation.

The increasing use of social media platforms could give rise to liability, regulatory actions, breaches of data security, harm to our business or reputational damages.

Social media is increasingly being used to communicate about our clinical development programs and the diseases our product candidate is being developed to treat. We intend to utilize appropriate social media in connection with communicating about our development programs. Social media practices in the biopharmaceutical industry continue to evolve and regulations relating to such use are not always clear. This evolution creates uncertainty and risk of noncompliance with regulations applicable to our business. For example, patients may use social media channels to report an alleged adverse event during a clinical trial. When such disclosures occur, we may fail to monitor and comply with applicable adverse event reporting obligations, or we may not

be able to defend our business or the public’s legitimate interests in the face of the political and market pressures generated by social media due to restrictions on what we may say about our investigational product candidate. There is also a risk of inappropriate disclosure of sensitive information or negative or inaccurate posts or comments about us on any social networking website, or a risk that a post on a social networking website by any of our employees may be construed as inappropriate promotion. If any of these events were to occur or we otherwise failed to comply with applicable regulations, we could incur liability, face regulatory actions, or incur other harm to our business or reputation.

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

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

Our employees, independent contractors, principal investigators, CROs, consultants, and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading, which could result in legal action or governmental investigations against us that may have a material adverse effect on our business, results of operations, financial condition and reputation.

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

Future legal proceedings and the impact of any finding of liability or damages could adversely impact our business, financial condition and results of operations.

From time to time, we may be named as a defendant in various legal actions or other proceedings, including class action lawsuits. Certain of these actions include, and future actual or threatened legal actions may include, claims for substantial and indeterminate amounts of damages, or may result in other results adverse to us.

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

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

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

Effective January 1, 2026, we no longer qualified for foreign private issuer status under U.S. federal securities law. Accordingly, we will likely incur additional expenses associated with compliance with the U.S. securities law applicable to U.S. domestic issuers.

As a foreign private issuer, we were exempt from certain provisions of the U.S. federal securities law. The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter. During our most recent assessment, we determined that we no longer qualify as a foreign private issuer. Accordingly, subsequent to January 1, 2026, we are required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We will also have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors, and principal shareholders are subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we are no longer able to rely upon exemptions from certain corporate governance requirements under the Nasdaq listing rules. As a U.S. listed public company that no longer qualifies as a foreign private issuer, we expect to incur significant additional legal, accounting, and other expenses that we did not incur as a foreign private issuer, and accounting, reporting, and other expenses in order to maintain a listing on a U.S. securities exchange. These rules and regulations could also make it more difficult for us to attract and retain qualified members of our Board and more expensive to procure director and officer liability insurance.

As a “smaller reporting company,” we are permitted to provide scaled disclosures, which may make our securities less attractive to investors and, if we cease to qualify, could increase our costs and divert management attention.

We currently qualify as a “smaller reporting company” under SEC rules, which allows us to provide reduced disclosures in our SEC filings, including, among other things, providing less extensive narrative disclosure, reduced executive compensation disclosure, and, in some cases, two years (rather than three) of audited financial statements. While these accommodations lower our compliance costs, some investors may view scaled disclosure as less comprehensive or less comparable to the information provided by larger public companies, which could reduce analyst coverage, limit institutional investor interest, adversely affect liquidity and increase the volatility of our common shares.

Our status as a smaller reporting company depends on the market value of our voting and non‑voting common equity held by non‑affiliates and our annual revenues measured at prescribed dates. If we fail to continue to qualify, we would become subject to more expansive disclosure and compliance requirements, which would increase legal, accounting, and administrative costs and could require additional resources, internal processes, and controls. Transitioning between reporting regimes (whether due to changes in our public float, revenues, or future amendments to SEC rules) may also require significant effort and expense and could divert management’s attention from our business. Furthermore, if we misapply the eligibility criteria or related accommodations, we could face delays in our SEC filings, regulatory scrutiny, or litigation, any of which could adversely affect our business, financial condition, results of operations, and the market price of our common shares.

We are likely a “passive foreign investment company” which may have adverse U.S. federal income tax consequences for U.S. holders.

U.S. holders of our common shares should be aware that we were likely classified as a passive foreign investment company (“PFIC”) during our most recently completed tax year, and based on current business plans and financial expectations, we expect that we will be a PFIC for the current tax year and may be a PFIC in future taxable years. If we are a PFIC for any year

during a U.S. holder’s holding period of our common shares, then such U.S. holder generally will be required to treat any gain realized upon a disposition of our common shares, or any “excess distribution” received on our common shares, as ordinary income, and to pay an interest charge on a portion of such gain or distribution, unless the U.S. holder makes a timely and effective qualified electing fund election (“QEF Election”) or a mark-to-market election with respect to our common shares. A U.S. holder who makes a QEF Election generally must report on a current basis its share of our net capital gain and ordinary earnings for any year in which we are a PFIC, whether or not we distribute any amounts to our shareholders. A U.S. holder who makes the mark-to-market election generally must include as ordinary income each year the excess of the fair market value of our common shares over the taxpayer’s adjusted tax basis therein.

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

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

Because we are a Canadian company and some of our directors and officers are residents outside the U.S., it may be difficult for investors in the U.S. to enforce civil liabilities against us based solely upon the federal securities laws of the U.S.

We are a Canadian company, with our principal place of business in Canada. As of December 31, 2025, some of our directors and officers, including our Chief Financial Officer, are residents outside of the U.S. and a significant portion of our assets are located outside the U.S. Consequently, it may be difficult for U.S. investors to effect service of process within the U.S. upon us or these directors or officers who are not residents of the U.S., or to realize in the U.S. upon judgments of courts of the U.S. predicated upon civil liabilities under the U.S. Securities Act of 1933, as amended. Investors should not assume that Canadian courts (1) would enforce judgments of U.S. courts obtained in actions against us or such directors or officers predicated upon the civil liability provisions of the U.S. federal securities laws or the securities or “blue sky” laws of any state within the U.S. or (2) would enforce, in original actions, liabilities against us or such directors or officers predicated upon the U.S. federal securities laws or any such state securities or “blue sky” laws. In addition, the protections afforded by Canadian securities laws may not be available to investors in the U.S.

Our success is dependent on our key employees and collaborators, as well as our ability to attract, retain and motivate highly qualified scientific personnel.

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

Public health epidemics and pandemics have adversely affected and could in the future adversely affect our business, results of operations, and financial condition.

Our business could be adversely affected by public health epidemics and pandemics, such as the COVID-19 pandemic, in regions where we have offices, manufacturing facilities, concentrations of clinical trial sites or other business operations, and could cause significant disruption in the operations of clinical trial sites, third party manufacturers and CROs upon whom we rely. The extent to which a public health epidemic or pandemic may impact our operations and those of our suppliers, collaborators, service providers, and healthcare organizations will depend on developments that are highly uncertain, including the duration of the outbreak and any related government actions.

As a result of the COVID-19 pandemic, we experienced, and as a result of future pandemics we may in the future experience, disruptions that could severely impact our business, results of operations, and financial condition. These disruptions can include the following:

• the imposition of shelter-in-place orders and work-from-home policies that could affect our research and development activities and access to our laboratory space;

• negative impacts on our clinical trials as a result of delays in site initiation, patient screening, patient enrollment, and monitoring and data collection;

• slower response times by the FDA and comparable foreign regulatory agencies for the review and potential approvals of our product candidate applications; and

• negative impacts on the global supply chain which may affect our ability to obtain sufficient materials for our product candidate.

The potential impacts or delays on our or our collaborators’ businesses, our clinical trials, healthcare systems, or the global economy as a whole could have a material adverse impact on our business, results of operations, and financial condition.

Common Shares Risk

Our stock price is subject to volatility, and, as a result, our stockholders’ investment in our stock could decline in value and we could be subject to securities litigation.

The market price of our common shares may be volatile. Volatility may affect the ability of holders of our common shares to sell the common shares at an advantageous price. Market price fluctuations in our common shares may be due to our operating results failing to meet the expectations of securities analysts or investors in any quarter, downward revision in securities analysts’ estimates, governmental regulatory action, adverse change in general market conditions or economic trends, acquisitions, dispositions or other material public announcements by us or our competitors, along with a variety of additional factors, including, without limitation, those set forth under this section “ Item 1A. Risk Factors ” in this Annual Report. In addition, from time to time, the market price for securities in the stock markets, including the Nasdaq, experience significant price and trading fluctuations that often has been unrelated or disproportionate to changes in a company’s underlying operating performance. These broad market fluctuations may adversely affect the market price of our common shares and, as a result, our stockholders’ investment in our stock could decline in value.

In addition, companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in response to volatility in the price of our common shares. Regardless of the merits or the ultimate results of such litigation, securities litigation brought against us could result in substantial costs and divert our management’s attention from other business concerns.

If we fail to meet all applicable Nasdaq Capital Market requirements and Nasdaq determines to delist our common shares, the delisting could adversely affect the market liquidity of our common shares and the market price of our common shares could decrease and our ability to access the capital markets could be negatively impacted.

Our common shares are listed on the Nasdaq Capital Market. We must satisfy the continued listing requirements of the Nasdaq Capital Market, in order to maintain the listing of our common shares on the Nasdaq Capital Market. On February 13, 2025, we received a delinquency notification letter (the “Notice”) from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”) indicating that, for the prior 30 consecutive business days, the closing bid price for our ordinary shares listed on the Nasdaq Capital Market was below the minimum $1.00 per share required for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2). The Notice provided that we had a period of 180 calendar days from the date of the Notice, or until August 12, 2025 (the “Notice Period”), to regain compliance with the minimum bid price requirement. The receipt of the Notice had no immediate effect on our business operations or the listing of our common shares, which continued to trade uninterrupted on the Nasdaq under the ticker “ONCY.” During the Notice Period, the bid price of our ordinary shares closed at or above $1.00 per share for a minimum of 10 consecutive business days, and accordingly, Nasdaq provided written confirmation of compliance to us.

However, we may receive similar delinquency notices in the future if we fail to continue to meet the Nasdaq’s listing standards requirements. In that event, if we fail to regain compliance during the specified cure period, we may be eligible for additional time to regain compliance. To qualify, we would be required to meet the continued listing requirement for the market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, except for the minimum bid price requirement. In addition, we would be required to notify Nasdaq of our intent to cure the deficiency during the second compliance period. There can be no assurance that we will be able to regain or subsequently maintain compliance with the Nasdaq continued listing requirements, and if we are unable to regain or maintain compliance with the continued listing requirements, our securities may be delisted from Nasdaq, which could reduce the liquidity of our common shares materially and result in a corresponding material reduction in the price of our common shares. Delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees, suppliers and business development opportunities. Such a delisting likely would impair your ability to sell or purchase our common shares when you wish to do so. Further, if we were to be delisted from Nasdaq, our common shares may no longer be recognized as a “covered security” and we would be subject to regulation in each state in which we offer our securities. Thus, delisting from Nasdaq could adversely affect our ability to raise additional financing

through the public or private sale of equity securities, would significantly impact the ability of investors to trade our securities and would negatively impact the value and liquidity of our common shares.

Our stockholders may experience dilution as a result of future equity offerings or other equity issuances.

In order to finance future operations and development efforts, we expect to raise funds through the issue of common shares or securities convertible into common shares. We cannot predict the size of future issuances of common shares, or securities convertible into common shares, or the effect, if any, that future issuances of our common shares will have on the market price of our common shares. Any transaction involving the issuance of previously authorized but unissued shares, or securities convertible into shares, may result in dilution, possibly substantial, to present and prospective holders of shares.

We do not anticipate paying cash dividends for the foreseeable future.

We have not declared or paid any dividends since our incorporation. We intend to retain earnings, if any, to finance the growth and development of our business and we do not intend to pay cash dividends on our common shares in the foreseeable future.

Domestication Risks

We are in the process of domestication into a U.S. company incorporated in the State of Nevada. The rights of shareholders as they currently exist under British Columbia law will be different from their rights under Nevada law, which will, in some cases, provide less protection to stockholders following the Domestication.

Upon consummation of the Domestication, our shareholders will subsequently become stockholders of a Nevada corporation. There are material differences between the Business Corporations Act (British Columbia) (the “BCBCA”) and the Nevada Revised Statutes (the “NRS”), and our current articles of incorporation and bylaws as a BCBCA corporation and our proposed charter and bylaws as a Nevada corporation.

For example, under the BCBCA, certain extraordinary corporate actions, such as continuances, certain amalgamations, sales, leases or other dispositions of all or substantially all of the undertaking of a company (other than in the ordinary course of business), liquidations, dissolutions and certain arrangements, are required to be approved by a special majority of the company’s shareholders, and specifies that a company’s articles set the requirement for a special majority as two-thirds of the votes cast by shareholders; whereas under Nevada law, a majority of shares outstanding is typically required for approval. Furthermore, shareholders under the BCBCA are entitled to dissent with respect to a number of extraordinary corporate actions, including an amalgamation, certain amendments to a corporation’s articles of incorporation or the sale of all or substantially all of a corporation’s assets, whereas under Nevada law, stockholders are only entitled to dissenter’s rights for certain mergers or consolidations. As shown by the examples above, stockholders of our Company post-Domestication, in certain circumstances, may be afforded less protection under the NRS than they had as shareholders under the BCBCA.

Our proposed bylaws following the Domestication designates certain courts as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.

Our proposed bylaws, which would be effective upon the consummation of the Domestication, provides that the Eighth Judicial District Court of the State of Nevada, in Clark County, Nevada shall, to the fullest extent permitted by law, be the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of the Company, (2) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, stockholder, employee or agent of the Company to the Company or the stockholders, (3) any action or proceeding asserting a claim arising pursuant to the NRS, our proposed charter or bylaws, (4) any proceeding to interpret, apply, enforce or determine the validity of our proposed charter or bylaws, (5) any internal action (as defined in NRS Section 78.046) and any action or proceeding as to which NRS Title 7 confers jurisdiction to the District Courts of the State of Nevada, or (6) any action asserting a claim governed by the internal affairs doctrine. The proposed bylaws further provide that the federal district courts of the U.S. are the sole and exclusive forum for the resolution of any claim asserting a cause of action under the Securities Act. Notwithstanding the foregoing, this exclusive forum provision shall not apply to suits brought to enforce any liability or duty created by the Exchange Act, or any other claim for which the federal courts of the U.S. have exclusive jurisdiction. To the fullest extent permitted by law, any person or entity purchasing or otherwise acquiring or holding any interest in shares of our capital stock following the Domestication will be deemed to have notice of, and consented to, the provisions of our proposed bylaws described in this paragraph. This choice-of-forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, employees or agents, which may discourage such lawsuits against us and such persons. Alternatively, if a court were to find these provisions of our proposed bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and operating results.

The Domestication will result in additional direct and indirect costs whether or not completed.

The Domestication will result in additional direct costs to us. We will incur legal fees, accountants’ fees, filing fees, mailing expenses, taxes and financial printing expenses in connection with the Domestication. The Domestication may also result in certain indirect costs by diverting the attention of our management and employees from the day-to-day management of the business, which may result in increased administrative costs and expenses.

The Domestication may result in adverse tax consequences for U.S. holders and non-U.S. holders of our common shares.

It is intended that the Domestication, along with our previous jurisdictional change from the Province of Alberta to the Province of British Columbia in Canada (together with the Domestication, the “Redomiciliation Transaction”) qualify as one or more reorganizations within the meaning of Section 368(a)(l)(F) of the Code (collectively, an “F Reorganization”). However, we have not sought, and do not intend to seek, any ruling from the U.S. Internal Revenue Service (“IRS”) with respect to the qualification of the Redomiciliation Transaction as an F Reorganization. No assurance can be given that the IRS will agree with the views expressed herein, or that a court will not sustain any challenge by the IRS in the event of litigation. If the Redomiciliation Transaction fails to qualify as an F Reorganization, a U.S. holder of our common shares generally would recognize gain or loss with respect to its shares in an amount equal to the difference, if any, between the fair market value of the corresponding common shares following Domestication (the “Oncolytics Nevada Common Shares”) received in the Redomiciliation Transaction and the U.S. holder’s adjusted tax basis in its common shares surrendered.

Assuming that the Redomiciliation Transaction qualifies as an F Reorganization, U.S. holders generally will be subject to Section 367(b) of the Code. A U.S. holder whose common shares, on the date of the Redomiciliation Transaction, have a fair market value of less than $50,000 and who, on the date of the Redomiciliation Transaction, beneficially owns (actually or constructively) less than 10% of the total combined voting power of all classes of our stock entitled to vote and less than 10% of the total value of all classes of our stock generally will not recognize any gain or loss and will not be required to include any part of our earnings and profits in income as a result of the Redomiciliation Transaction. A U.S. holder whose public shares, on the date of the Redomiciliation Transaction, have a fair market value of $50,000 or more and, who on the date of the Redomiciliation Transaction, beneficially owns (actually or constructively) less than 10% of the total combined voting power of all classes of our stock entitled to vote and less than 10% of the total value of all classes of our stock generally will recognize gain (but not loss) in respect of the Redomiciliation Transaction as if such U.S. holder exchanged its common shares for Oncolytics Nevada Common Shares in a taxable transaction, unless such U.S. holder elects, in accordance with applicable U.S. treasury regulations, to include in income, as a deemed dividend deemed paid by us, the “all earnings and profits amount” (as defined in the U.S. treasury regulations under Section 367 of the Code) attributable to the public shares held directly by such U.S. holder. A U.S. holder who, on the day of the Redomiciliation Transaction, beneficially owns (actually or constructively) 10% or more of the total combined voting power of all classes of our stock entitled to vote or 10% or more of the total value of all classes of our stock, generally will be required to include in income, as a deemed dividend deemed paid by us, the “all earnings and profits amount” attributable to the common shares held directly by such U.S. holder as a result of the Redomiciliation Transaction. We expect to have a deficit in earnings and profits on the date of the Redomiciliation Transaction. However, it is possible that, notwithstanding our expectations, the amount of our cumulative net earnings and profits could be positive through the date of the Redomiciliation Transaction. Therefore, there can be no assurance that we will have a deficit in earnings and profits on the date of the Redomiciliation Transaction.

Non-U.S. holders will generally become subject to withholding tax at 30% (unless reduced under any applicable U.S. income tax treaty) on any distributions or deemed distributions treated as dividends for U.S. federal income tax purposes paid on Oncolytics Nevada Common Shares after the Redomiciliation Transaction.

The amount of corporate tax payable by us will be affected by the value of our property on the date of the Domestication.

For Canadian tax purposes, we will be deemed to have a year end immediately prior to the Domestication and will also be deemed to have sold all of our property and received the fair market value for those properties. We do not expect that we will be subject to any Canadian taxation on this deemed disposition. However, we will be subject to an additional corporate emigration tax equal to 5% of the amount by which the fair market value of our property, net of liabilities, exceeds the paid-up capital of our issued and outstanding shares, which may result if the price of our common shares increases or the exchange rate were to change significantly. Further, it is possible that the Canadian federal tax authorities may not accept our valuations or calculations of our tax accounts, which may result in additional taxes payable as a result of the Domestication. As is customary, when a Canadian federal tax liability depends largely on factual matters, we have not applied to the Canadian federal tax authorities for a ruling on such matters and do not intend to do so.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and the notes thereto appearing elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those set forth in the section titled “ Item 1A. Risk Factors ” of this Annual Report, our actual results could differ materially from the results described in or implied by these forward-looking statements. Please also see the section titled “ Cautionary Statement Regarding Forward-Looking Statements. ”

All references to the terms “we,” “our,” “us,” “the Company,” and “Oncolytics” may refer, as the context requires, to Oncolytics Biotech Inc., or collectively to Oncolytics Biotech Inc. and its subsidiaries. Unless otherwise indicated, all references to “$” and “dollars” in this management’s discussion and analysis of financial condition and results of operations mean thousands of U.S. dollars.

Company Overview

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

Pelareorep is a proprietary isolate of reovirus, a naturally occurring, non-pathogenic double-stranded RNA (“dsRNA”) virus commonly found in environmental waters. Pelareorep has shown promising results in changing the tumor microenvironment (“TME”). This creates a more immunologically favorable TME, making the tumor more susceptible to various treatment combinations. These treatments include chemotherapies, checkpoint inhibitors, and other immuno-oncology approaches such as CAR T therapies, bispecific antibodies, and RAS or CDK4/6 inhibitors. Pelareorep induces a new army of tumor-reactive T cells, helps these cells to infiltrate the tumor through an inflammatory process, and upregulates the expression of PD-1/PD-L1. By priming the immune system with pelareorep, we believe we can increase the proportion of patients who respond to various cancer treatments, including immunotherapies, especially in cancers where existing treatment regimens have failed or provided limited benefit.

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

Our primary focus is to position pelareorep as a platform immunotherapy for the treatment of gastrointestinal (“GI”) cancers and advance our GI programs to registration-enabled clinical studies. We are exploring opportunities for registrational programs and investigator-sponsored trials in metastatic colorectal cancer, second-line or later anal cancer, and metastatic pancreatic cancer.

Going Concern

We have not been profitable since our inception and expect to continue to incur substantial losses as we continue research and development efforts. We do not expect to generate significant revenues until and unless pelareorep becomes commercially viable. We expect our current cash resources to be able to fund near-term milestones, but they are not sufficient to fund our planned operations over the next 12 months from the date of issuance of our consolidated financial statements included in this Annual Report. These factors raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon raising additional financing. Management believes that the actions presently being taken to raise additional capital provide the opportunity for us to continue as a going concern. While we believe in the viability of our strategy and our ability to raise additional funds, there can be no assurance that additional liquidity will be available under acceptable terms or at all. Furthermore, if we are unable to obtain additional financing when required, there can be no assurance that we will be able to sufficiently reduce or eliminate our planned expenditures to extend our operating runway. See further discussion in “ Capital Requirements.”

Program Development Updates and Outlook

The following are the development updates and outlook for each of our programs for the year ended December 31, 2025, through to the date of this Annual Report.

Clinical Trial Program

Second-line metastatic colorectal cancer (“mCRC”)

In 2025, we filed for Fast Track Designation for pelareorep in combination with bevacizumab and FOLFIRI for the treatment of patients with Kirsten rat sarcoma (“KRAS”)-mutant, microsatellite-stable (“MSS”) mCRC in the second-line setting. The application was supported by clinical data demonstrating a 33% objective response rate (“ORR”) for pelareorep-based therapy compared to approximately 10% ORR with standard-of-care 11 in this patient population. In addition, pelareorep combination therapy was associated with a median progression free survival (“PFS”) of 16.6 months, compared to 5.7 months with standard-of-care 12 , and a median overall survival (“OS”) of 27 months, compared to 11.2 months with standard-of-care 13 . The FDA granted our application awarding Fast Track Designation for this indication in 2026.

Randomized Phase 2 second-line mCRC study

In 2026, we launched a randomized Phase 2 study evaluating second-line RAS-mutated (which includes KRAS) MSS mCRC patients. Patients will receive either the control arm of bevacizumab (Avastin®) and FOLFIRI or the experimental arm of pelareorep, bevacizumab, and FOLFIRI. We expect to initiate the first study site in late March 2026 and provide preliminary data by year-end.

Second-line or later squamous cell carcinoma of the anal canal (“SCAC”)

GOBLET Cohort 4

Pelareorep is being studied in combination with atezolizumab in the rare, but deadly, relapsed, unresectable SCAC indication.

Throughout 2025, we continued to enroll patients in GOBLET Cohort 4. In January 2026, we reported updated clinical data from patients with third-line SCAC. The data showed four of 14 evaluable third-line patients receiving pelareorep and atezolizumab achieved objective responses, resulting in an ORR of approximately 29%. These responses included two complete responses and two partial responses. The median duration of response (“DOR”) is approximately 17 months (67 weeks), indicating both depth and durability of clinical benefit in a heavily pretreated population. In historical third-line SCAC studies,

11 Bennouna J. Lancet Oncol (14):29-37, 2013 / Iwamoto S. Ann Oncol. Jul;26(7); 1427-33, 2015

12 Bennouna J. Lancet Oncol (14):29-37, 2023

13 Bennouna J. Lancet Oncol (14):29-37, 2023

objective response rates are typically approximately 10% or less 14 , with limited durability. In the second-line setting, pelareorep and atezolizumab achieved a 30% ORR, more than doubling the 13.8% ORR that was approved by the FDA for the current standard of care therapy 15 . We are no longer enrolling patients in Cohort 4 and will continue to monitor patients on the study and provide a final analysis once sufficient data has been collected.

Potential second-line or later SCAC registrational study

We expect to meet with the FDA in mid-April of 2026 to align on the design of a single-arm registrational study in second-line or later SCAC in the U.S. Due to the challenging treatment options for these patients, we believe a clinical trial of under 100 patients will be sufficient for FDA approval.

First-line metastatic pancreatic ductal adenocarcinoma (“mPDAC”)

GOBLET Cohort 5

In a randomized two-arm cohort, pelareorep is being evaluated in combination with modified FOLFIRINOX with or without atezolizumab to gain greater clarity regarding the contribution of the checkpoint inhibitor to the efficacy achieved in GOBLET Cohort 1. In that cohort, pelareorep combined with gemcitabine/nab-paclitaxel and atezolizumab achieved a 62% ORR in 13 evaluable patients. GOBLET Cohort 5 is supported by the Pancreatic Cancer Action Network (“PanCAN”) Therapeutic Accelerator Award for up to $5 million.

We received regulatory approval in the first quarter of 2025 to allow GOBLET Cohort 5 to progress to full enrollment following a positive safety review and presented the safety run-in results at the 2025 American Society of Clinical Oncology (“ASCO”) Gastrointestinal Cancers Symposium.

In the first quarter of 2026, we made the determination that we had sufficient patients enrolled in Cohort 5 that would allow us to properly analyze the combinations being tested in the cohort. We expect to present preliminary analysis of the data in the second half of 2026 once survival data has matured sufficiently.

GOBLET Cohort 1

Clinical data from GOBLET Cohort 1 was presented at the 2025 ASCO Annual Meeting, which highlighted pelareorep's mechanism of action in PDAC, offering new insights into how pelareorep, our immunotherapy, stimulates multiple arms of the immune system and primes tumors for treatment. Highlights from the poster included:

– Pelareorep initiates the expansion of reovirus-specific T cells that are associated with favorable clinical responses at week 24.

– Pelareorep increases cytokines and chemokines associated with altering the tumor microenvironment to allow anti-viral and anti-tumor T cells to attack the tumor.

– The presence of tumor-infiltrating lymphocytes clones in the blood before treatment and the expansion of these clones in the blood post-treatment are associated with favorable clinical responses.

Potential first-line pancreatic cancer registration study

We participated in a Type C meeting with the FDA in the fourth quarter of 2025 and agreed on the key elements of a Phase 3 trial of pelareorep in combination with standard-of-care therapy for the first-line treatment of mPDAC. This trial would evaluate pelareorep and gemcitabine/nab-paclitaxel with or without a checkpoint inhibitor compared to chemotherapy alone. The primary endpoint of the study is overall survival, and PFS and ORR are secondary endpoints. We remain in active discussions with potential partners to supply a checkpoint inhibitor and fund our proposed first line PDAC study. Until we enter into a transaction agreement with a partner, we do not expect to advance this study on our own and plan to focus our resources on other high-value indications that provide a more efficient path to registration for pelareorep.

14 Marabelle et al. Pembrolizumab for previously treated advanced anal squamous cell carcinoma: results from the non-randomised, multicohort, multicentre, phase 2 KEYNOTE-158 study. Lancet Gastroenterol Hepatol. 2022 May;7(5):446-454. doi: 10.1016/S2468-1253(21)00382-4.

15 Rao S, et al. A phase II study of retifanlimab (INCMGA00012) in patients with squamous carcinoma of the anal canal who have progressed following platinum-based chemotherapy (POD1UM-202). ESMO Open. 2022 Aug;7(4):100529. doi: 10.1016/j.esmoop.2022.100529. Epub 2022 Jul 8

Gastrointestinal Tumor Scientific Advisory Board Established

In support of our mCRC and SCAC clinical programs, we formed our Gastrointestinal Tumor Scientific Advisory Board, a group of leading oncology experts assembled to guide our clinical and regulatory strategy for developing pelareorep as a treatment for GI cancers.

In 2026, our clinical objectives will primarily revolve around our mCRC and second-line or later SCAC programs. We are actively evaluating multiple strategic partnership options and continue to engage with collaborators, academic partners, and other stakeholders to determine the most effective path forward for pelareorep.

Manufacturing and Process Development

While we currently have sufficient drug product supply to support our clinical development program, we continued our activities to expand our production capabilities as we focus on advancing our active drug substance and finished drug product towards registration and commercial readiness. In 2025, we executed a cGMP production run, completed an engineering and cGMP drug product fill with a secondary fill/finish supplier, and began a formal assessment of the drug substance production process in preparation for performance qualification. We also incurred storage and distribution costs to maintain our product supply. Ongoing bulk manufacturing and expanded filling capabilities are both part of the planned process validation. Process validation is required to ensure that the resulting product meets the specifications and quality standards and will form part of our submission to regulators, including the FDA, for product approval.

In 2026, our manufacturing program will focus on preparatory activities for validation of our drug substance production process, additional drug product manufacture to support the clinical program, and supply distribution for our ongoing and planned studies.

Intellectual Property

At December 31, 2025, we had 137 patents, including 11 U.S. and 7 Canadian patents, and issuances in other jurisdictions. We have an extensive patent portfolio covering pelareorep and formulations that we use in our clinical trial program. We also have patents covering methods for manufacturing pelareorep and screening for susceptibility to pelareorep. These patent rights extend to at least the end of 2031. We are continuing to analyze additional patent protections and have placed an emphasis on patent extension strategy and growing our patent portfolio. In addition, we have submitted new patent applications that we expect to extend certain patent protections and grant new rights into the 2040s.

Financing Activity

During the year ended December 31, 2025, we sold 15,437,705 common shares pursuant to at-the-market (“ATM”) offering agreements for gross proceeds of $12,529 at an average price of $0.81, resulting in net proceeds of $11,767 after issuance costs of $762 (including commissions of $376). In addition, we issued 7,562,152 common shares pursuant to the SEPA Arrangement (defined below) for cash proceeds of $2,348.

From January 1, 2026 to March 23, 2026, we sold 7,446,574 common shares pursuant to an ATM offering agreement for gross proceeds of $7,861 at an average price of $1.06. We received net proceeds of $7,625 after commissions of $236.

Cash Resources

As of December 31, 2025, we had cash and cash equivalents of $5,202 (see “ Liquidity and Capital Resources ”).

Other Corporate Matters

On October 20, 2025, we filed a Registration Statement on Form F-4 with the U.S. Securities and Exchange Commission (as amended by Amendment No. 1 to Form F-4, as filed on December 5, 2025) that included a management circular, prospectus and other relevant documents related to various proposals contained therein. It included plans to hold a Special Meeting of Shareholders to vote on, among other things, a series of transactions that will change the jurisdiction of Oncolytics from the Province of Alberta in Canada to the State of Nevada in the U.S. (the “Domestication”). On January 15, 2026, all resolutions described in this registration statement were approved by our shareholders. On March 17, 2026, as part of the Domestication process, we changed our jurisdiction of incorporation to the Province of British Columbia in Canada. We expect the Domestication to become effective on or around March 31, 2026.

Components of Results of Operations

Research and Development Expenses (“R&D”)

Our R&D expenses consist primarily of costs incurred to conduct research and development on pelareorep, including clinical trial expenses, manufacturing and related process development expenses, personnel-related expenses, translational science

expenses, and other R&D expense. Clinical trial expenses include regulatory and consulting activities, contract research organization expenses, data management expenses, and other costs associated with our clinical trial program. Manufacturing and related process development (“M&P”) expenses include product manufacturing and process development activities. Product manufacturing expenses include third-party direct manufacturing costs, quality control testing, filling, labeling, packaging, and storage costs. Process development expenses include costs associated with studies examining components of our manufacturing and analytical processes and costs associated with planned process validation and related conformity testing. Translational science expenses are intended to expand our intellectual property related to pelareorep and identify potential licensing opportunities arising from our technology base. Personnel-related expenses include salaries and wages, stock-based compensation, and other employee-related expenses.

General and Administrative Expenses (“G&A”)

Our G&A expenses consist primarily of public company-related expenses, personnel-related expenses, intellectual property expenses, office expenses, lease expense and depreciation. Public company-related expenses include investor, media, and public rela tions, marketing communications, business development, financial advisory activities, legal and accounting fees, corporate insurance, director fees and transfer agent costs, and other fees relating to our U.S. and Canadian stock listings (we voluntarily delisted from the Toronto Stock Exchange in August 2025). Personnel-related expenses include salaries and wages, stock-based compensation, and other employee-related expenses. Intellectual property expenses include legal and filing fees associated with our patent portfolio. Office expenses include administrative costs associated with operating our business.

Change in Fair Value of Warrant Derivative

Our derivative warrants, as described further in Note 6 of the consolidated financial statements included in this Annual Report, are reported as a liability until exercised or expired. These warrants are adjusted to fair value at the end of each reporting period, as well as immediately before exercise. Changes in fair value are recorded in the consolidated statements of operations and comprehensive loss. Gains and losses resulting from the revaluation of the warrant derivative are non-cash and do not impact our cash flows.

Loss on Fair Value of SEPA Arrangement

On April 10, 2025, we entered into a standby equity purchase agreement (the “SEPA Arrangement”) with Alumni Capital LP (“Alumni”), as described further in Note 7 of the consolidated financial statements included in this Annual Report. The SEPA Arrangement was accounted for as an equity-linked derivative, whereby we exercised written put options, and sold common shares to Alumni. As a result of exercising these put options, we recognized a fair value loss resulting from differences between the fair value of the shares put to Alumni on the respective notice dates as compared to the market price of those shares on the respective settlement dates. The SEPA Arrangement was terminated on August 22, 2025.

Results of Operations

The following table summarizes our results of operations for the years ended December 31, 2025 and 2024:

$ Change

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense), net:

Change in fair value of warrant derivative

Fair value loss from SEPA Arrangement

Foreign exchange (loss) gain

Interest income

Total other income, net

Loss before income taxes

Income tax expense

Net loss

Research and Development Expenses (“R&D”)

Our R&D expenses decreased by $2,129 from $15,443 for the year ended December 31, 2024, to $13,314 for the year ended December 31, 2025. The following table summarizes our R&D expenses for the years ended December 31, 2025 and 2024:

$ Change

Clinical trial expenses

Manufacturing and related process development expenses

Personnel-related expenses

All other R&D expenses

Total R&D expenses

The decrease in our R&D expenses for the year ended December 31, 2025, was primarily due to the following:

• Decreased clinical trial expenses largely driven by lower BRACELET-1 study costs as the study was completed in 2024. These decreases were offset in part by higher planning-related expenses during 2025. During 2025, we focused our R&D efforts on patient enrollment and sample analysis for Cohort 5 of the GOBLET study. These activities were supported in part by the PanCAN Therapeutic Accelerator Award, of which $2,186 and $1,171 of funds received were applied during 2025 and 2024, respectively. Our clinical trial expenses for 2025 included $688 of non-cash stock-based compensation expense for consulting services.

• Decreased M&P expenses as we completed one cGMP production run in 2025 compared to two cGMP production runs in 2024.

In addition to higher planning-related expenses noted above, the above decreases in our R&D expenses for the year ended December 31, 2025 were partially offset by the following:

• Increased personnel-related expenses associated with CEO transition-related activities, and changes in personnel and recruiting fees for clinical and statistical leadership positions.

General and Administrative Expenses (“G&A”)

Our G&A expenses increased by $5,312 from $10,099 for the year ended December 31, 2024, to $15,411 for the year ended December 31, 2025. The following table summarizes our G&A expenses for the years ended December 31, 2025 and 2024:

$ Change

Public company-related expenses

Personnel-related expenses

Intellectual property expenses

All other G&A expenses

Total G&A expenses

The increase in our G&A expenses for the year ended December 31, 2025 was primarily due to the following:

• Increased public company-related expenses primarily as a result of higher professional fees related to our Domestication activities, the Special Meeting of Shareholders held in January 2026 and the voluntary delisting from the TSX. In addition, we incurred transaction financing costs of $550 associated with our SEPA Arrangement, including $440 of non-cash charges for the value of common shares issued to Alumni for commitment fees. These expenses were partially offset by lower directors and officers insurance premiums. Our public company-related expenses for 2025 included $2,967 of non-cash stock-based compensation expense for consulting services.

• Increased personnel-related expenses primarily as a result of changes to our executive management team.

• Increased intellectual property expenses related to executing our patent extension strategy and new patent applications.

Change in Fair Value of Warrant Derivative

For the years ended December 31, 2025 and 2024, we recognized gains of $153 and $1,169, respectively, associated with changes in the fair value of our warrant derivative. There was no cash flow impact as a result of the change in fair value of the warrant derivative. These gains were primarily due to a decline in the fair value of the warrants, which are revalued at the end

of each reporting period using the Black-Scholes valuation model (the “Black-Scholes Model”). The number of outstanding warrants was 7,667,050 at each of December 31, 2025 and 2024.

Loss on Fair Value of SEPA Arrangement

During the year ended December 31, 2025, pursuant to the SEPA Arrangement, we exercised written put options and sold 6,650,000 common shares to Alumni for gross proceeds of $2,348 at an average price of $0.35. As a result of exercising these put options, we recognized a fair value loss of $388, which was reported as fair value loss from SEPA Arrangement. The SEPA Arrangement was terminated on August 22, 2025. There was no similar activity in the year ended December 31, 2024.

Foreign Exchange

For the year ended December 31, 2025, our foreign exchange losses were $106 compared to gains of $699 for the year ended December 31, 2024. The foreign exchange gains/losses incurred in each respective period mainly reflected the fluctuation of the U.S. dollar versus the Canadian dollar, primarily on our U.S. dollar-denominated cash and cash equivalents.

Liquidity and Capital Resources

The following tables summarize our liquidity and capital resources as of December 31, 2025 and 2024, and cash flows for each of the years ended December 31, 2025 and 2024, and are intended to supplement the more detailed discussion that follows.

December 31, 2025

December 31, 2024

Cash and cash equivalents

We have no debt other than accounts payable and accrued liabilities and operating lease liabilities. We have commitments relating to completing our research and development of pelareorep.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

Year Ended December 31,

Change

Operating activities

Investing activities

Financing activities

Effect of exchange rate changes on cash

Total decrease in cash and cash equivalents

Cash used in operating activities

The increase in net cash used in operating activities reflects lower operating activities and higher non-cash working capital changes in 2025. Overall, net cash used in operating activities for the years ended December 31, 2025 and 2024 was primarily related to the funding of our research and development activities, including personnel-related expenses, manufacturing and clinical trial costs, and other costs associated with general and administrative expenses.

Net cash used in operating activities for the year ended December 31, 2025 consisted of a net loss of $28,759, partially offset by non-cash adjustments of $7,467 and non-cash working capital changes of $1,180. Non-cash items primarily included the value of shares issued for consulting services, stock-based compensation expense, value of shares issued for SEPA Arrangement commitment fees, non-cash lease expense, change in fair value of warrant derivative, and unrealized foreign exchange gains. Non-cash working capital changes mainly reflected increased accounts payable and accrued liabilities, decreased prepaid expenses, and a net change in other receivables/other liabilities associated with changes in funding related to PanCAN.

Net cash used in operating activities for the year ended December 31, 2024 consisted of a net loss of $22,794, partially offset by non-cash adjustments of $388 and non-cash working capital changes of $2,523. Non-cash items primarily included stock-based compensation expense, non-cash lease expense, change in fair value of warrant derivative, and unrealized foreign exchange gains. Non-cash working capital changes mainly reflected decreased prepaid expenses, increased accounts payable and accrued liabilities, and increased other liabilities with unapplied funding received from PanCAN.

Net cash used by investing activities

Net cash used by investing activities for the years ended December 31, 2025 and 2024 were related to the acquisition of property and equipment.

Net cash provided by financing activities

Net cash provided by financing activities during the year ended December 31, 2025 consisted primarily of $11,767 of net proceeds from sales of our common shares pursuant to ATM offering agreements, and $2,348 of proceeds from sales of our common shares pursuant to the SEPA Arrangement.

Net cash provided by financing activities during the year ended December 31, 2024 consisted primarily of $4,981 of net proceeds from sales of our common shares pursuant to ATM offering agreements.

Capital Requirements

As a clinical-stage biopharmaceutical company, we have not been profitable since our inception. As we continue the development of pelareorep, we do not expect to generate significant revenues until we have obtained regulatory approval and pelareorep becomes commercially viable. We expect to continue to incur substantial operating losses until such time as future product sales, licensing fees, milestone payments or royalty payments are sufficient to fund our continued operations. As we position pelareorep as a platform immunotherapy for the treatment of GI tumors and advance our GI programs to registration-enabling clinical studies, we expect our immediate operating losses to moderately decrease as compared to recent prior periods. We also expect we will continue to require additional capital as pelareorep is a product candidate in later stages of clinical development which generally has higher costs than those in earlier stages, primarily due to the increased size and duration of later-stage clinical trials. Additionally, we expect to continue to incur additional costs associated with our manufacturing capabilities and maintaining our clinical supply, expanding and protecting our intellectual property and operating as a public company. To date, we have funded our operations mainly through issuing additional capital via public offerings, equity distribution arrangements, and the exercise of warrants.

Conducting clinical trials necessary to obtain regulatory approval is costly and time-consuming. We may never succeed in achieving marketing approval. The probability of successful commercialization of our current drug candidate may be affected by numerous factors, including clinical data obtained in future trials, competition, manufacturing capability and commercial viability. As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of any of our product candidates.

We expect our current cash resources to be able to fund near-term operating milestones, but they are not sufficient to fund our planned operations over the next 12 months from the date of issuance of our consolidated financial statements included in this Annual Report. We have access to capital through our $50,000 ATM facility. We plan to use this equity arrangement to assist us in achieving our near-term capital objectives. This arrangement provides us with the opportunity to raise capital and better manage our cash resources. While there is no guarantee we can raise the full amount, from January 1, 2026 to March 23, 2026, we sold 7,446,574 common shares pursuant to this ATM agreement for gross proceeds of $7,861 at an average price of $1.06. As of the date of this Annual Report, we have approximately $39,002 remaining on our ATM. We expect to continue to access this equity arrangement to help support our operations.

The amount and timing of our future funding requirements will depend on factors such as the results of our ongoing development, including the results from our GI-focused clinical plan and regulatory interactions, any expansion of our clinical trial program, the timing of patient enrollment in our clinical trials, the actual costs incurred to support each clinical trial, the number of treatments each patient will receive, the timing of R&D activity with our clinical trial research collaborations, the number, timing and costs of manufacturing runs required to conclude the validation process and supply product to our clinical trial program, the level of collaborative activity undertaken, and other factors described in “ Item 1A Risk Factors ” of this Annual Report. Though our Board reviews and approves our annual budget and multi-year plan, related to these factors, we may require significant additional funds earlier than anticipated and there is no assurance that we will not need or seek additional funding prior to such time, especially if market conditions for raising additional capital are favorable. The judgment and assumptions applied by management in determining our capital requirements may prove to be wrong, and actual results could vary materially from our expectations as significant risks and uncertainties are involved.

To fund our capital requirements beyond the next twelve months, we plan on raising additional funds through the sale of our common shares or other capital resources, such as strategic collaborations and debt facilities, to fund our ongoing operations. However, given the difficulty for micro-cap market capitalization companies to raise significant capital, there can be no assurance that additional liquidity will be available under acceptable terms or at all. Furthermore, if we are unable to obtain additional financing when required, there can be no assurance that we will be able to sufficiently reduce or eliminate our

planned expenditures to extend our operating runway until we obtain sufficient financing. These factors raise substantial doubt about our ability to continue as a going concern over the next 12 months from the date of issuance of our consolidated financial statements included in this Annual Report. Our consolidated financial statements included in this Annual Report do not reflect the adjustments that may result from the outcome of these uncertainties. Such adjustments could be material.

To the extent we can raise additional capital through the sale of equity or convertible debt securities, our shareholders’ ownership interest will be diluted. Debt financing, if available, may involve agreements that include conversion discounts, pledging our intellectual property as collateral or covenants limiting or restricting our ability to take specific actions, such as incurring additional debt or making capital expenditures. If we raise additional funds through government or other third-party funding, marketing and distribution arrangements or other collaborations, or strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to pelareorep, future revenues, or grant licenses on terms that may not be favorable. The availability of new capital will be affected by the status of our clinical development program, including our clinical trials and our clinical data; the ability to obtain regulatory approvals and other regulatory actions; market acceptance of our product candidates; the state of the capital markets generally with particular reference to pharmaceutical, biotechnology and medical companies; and other relevant commercial considerations.

If we are unable to secure adequate funding when needed, we may need to scale back our operations, including, among other things, implementing cost reduction strategies, such as reducing use of outside professional service providers, reducing the number of our employees or employee compensation, and modifying or delaying pelareorep’s development; licensing to third parties the rights to commercialize pelareorep, or otherwise relinquishing significant rights to our technology on terms that may not be favorable to us; or divesting assets or ceasing operations through a merger, sale, or liquidation of our Company.

For the year ended December 31, 2025, we raised net cash proceeds of $14,115 from the issuance of 22,999,857 common shares through our ATM offering agreements and our SEPA Arrangement.

We are not subject to externally imposed capital requirements, and there have been no changes in how we define or manage our capital in 2025.

Contractual Obligations and Commitments

As of December 31, 2025, our contractual obligations are comprised primarily of our accounts payable, accrued liabilities and operating lease obligations. In addition, we are committed to payments of approximately $1,248 for activities mainly related to our clinical trial and contract manufacturing programs, which are expected to occur over the next two years. We are able to cancel most of these agreements with notice. The ultimate amount and timing of these payments are subject to changes in our research and development plan.

As of December 31, 2025, we had not entered into any off-balance sheet arrangements.

Critical Accounting Policies and Significant Judgments and Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments, and assumptions that we believe are reasonable based upon the information available to us. These estimates, judgments, and assumptions affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements included in this Annual Report. Actual results could differ from those estimates, and such differences could be material.

Estimates, judgments, and assumptions made by management that are significant to the financial statements are described below and in our consolidated financial statements included in this Annual Report.

Clinical trial and manufacturing expenses

Clinical trial and manufacturing expenses represent significant components of our research and development expenses, and we outsource a significant portion of these activities to third-party contract research/manufacturing organizations. The financial terms of these agreements are subject to negotiation, vary from contract to contract, and may result in uneven payment flows to these organizations. Payments under the contracts depend on factors such as achieving certain milestones. As part of preparing our consolidated financial statements, we estimate the expense to recognize based on services that the contract research/manufacturing organizations have performed. When making these estimates, we use operational and contractual information from third-party service providers, operational data from internal personnel, and considerable judgment. We base our estimates on the best information available at the time. However, additional information may become available to us which may allow us to make a more accurate estimate in future periods. In this event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain. Such increases or decreases in

cost are generally considered to be changes in estimates and will be reflected in research and development expenses in the period identified.

Valuation of stock-based compensation

Estimating the fair value of stock-based compensation requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. We have chosen to use the Black-Scholes Model to calculate the fair value of our stock options. The Black-Scholes Model is widely used and accepted by other publicly traded companies. Therefore, we have concluded that the Black-Scholes Model is the appropriate option pricing model to use for valuing our stock options at this time. The assumptions and estimates used in the Black-Scholes Model include fair value of the common stock on the date of grant, expected term, volatility, risk-free interest rate, and dividend yield.

Valuation of warrant derivative

Estimating the fair value of the warrant derivative at initial measurement, at each exercise date and at each reporting period requires determining the most appropriate valuation model. We have chosen to use Black-Scholes Model to calculate the fair value of our warrant derivative. The assumptions and estimates used in the Black-Scholes Model include fair value of the common stock on the date of grant, expected term, volatility, risk-free interest rate, and dividend yield.

Income taxes

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Currently, we are accumulating tax loss carry-forward balances in various tax jurisdictions creating a deferred tax asset. Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Management's judgment is required to determine the amount of deferred tax assets that can be recognized based on the likely timing and the level of future taxable profits together with future tax planning strategies.

To date, we have determined that none of our deferred tax assets should be recognized. Our deferred tax assets are mainly comprised of our net operating losses from prior years, prior year research and development expenses, and non-refundable investment tax credits. These tax pools relate to entities that have a history of losses, have varying expiry dates, and may not be used to offset taxable income within our other subsidiaries. There are also no taxable temporary differences or any tax planning opportunities available that could partly support the recognition of these losses as deferred tax assets.

Functional currency

We assess the relevant factors related to the primary economic environment in which our entities operate to determine the functional currency. Where the assessment of primary indicators are mixed, we assess the secondary indicators, including the relationship between the foreign operations and reporting entity.

Revenue recognition

Revenue recognition requires assumptions and estimates regarding total estimated costs, the complexity of the work to be performed, and the length of time to complete the performance obligation, among other variables. Management uses its judgment in applying the input method when determining the extent of progress toward completion of performance obligations made under customer contracts.

Recent Accounting Pronouncements

Recent accounting pronouncements are contained in Note 3 to the consolidated financial statements included in this Annual Report.