The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read together with our condensed consolidated financial statements and related notes included elsewhere in this quarterly report and our audited financial statements and related notes included in our annual report on Form 10-K for the year ended December 31, 2025 . The following discussion contains forward-looking statements that involve numerous risks and uncertainties. Our actual results could differ materially from the results described in or implied by these forward-looking statements. See “Cautionary Note Regarding Forward-Looking Statements” for additional cautionary information.
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 tumors, 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 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 key inflammatory cytokines resulting in the formation of tertiary lymphoid structures and the expansion of tumor-infiltrating lymphocytes. 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 studies and investigator-sponsored trials in metastatic colorectal cancer, second-line or later anal cancer, and metastatic pancreatic cancer.
Going Concern
We have incurred operating losses since inception and expect to continue to incur losses for the foreseeable future as we advance the development of pelareorep and incur research and development, manufacturing, and general and administrative expenses. We do not expect to generate significant revenues unless and until pelareorep receives regulatory approval and becomes commercially viable.
As of June 30, 2026, we had cash and cash equivalents of $4,115. Based on our current operating plan, we expect that our existing cash resources, even when considered together with available capital under our equity distribution arrangements, are sufficient to fund near‑term operating milestones but are not sufficient to fund our planned operations for at least twelve months from the date of issuance of our condensed consolidated financial statements included in this quarterly report. These conditions raise substantial doubt about our ability to continue as a going concern.
Our ability to continue as a going concern depends on our ability to obtain additional financing to fund ongoing operations. Management has plans to raise additional capital, including through the use of our at‑the‑market equity sales agreement and potential strategic collaborations or other financing arrangements, as discussed under “Capital Requirements.” However, there can be no assurance that additional financing will be available when needed, on acceptable terms, or at all. If we are unable to
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obtain additional funding as required, we may need to reduce or delay research and development activities, scale back operations, or pursue strategic alternatives.
The accompanying condensed consolidated financial statements have been prepared on a going‑concern basis and do not include any adjustments that might result from the outcome of these uncertainties. Such adjustments could be material.
Program Development Updates and Outlook
The following are the development updates and outlook for our program for the three months ended June 30, 2026, through to the date of this quarterly report.
Clinical Trial Program
Second-line metastatic colorectal cancer (“mCRC”)
In the first quarter of 2026, we received Fast Track Designation for pelareorep in combination with bevacizumab and fluorouracil, leucovorin, irinotecan (“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-care1 in this patient population. In addition, pelareorep combination therapy was associated with a median progression-free survival of 16.6 months, compared to 5.7 months with standard-of-care2, a duration of response of 19.5 months, compared to historical benchmarks of approximately 4–6 months3 in this setting, and a median overall survival of 27 months, compared to 11.2 months with standard-of-care4.
Randomized Phase 2 second-line mCRC study – REO 033
In March 2026, we announced the launch of a randomized Phase 2 study, known as REO 033, 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. The first study site was initiated in early April 2026.
1 Bennouna J. Lancet Oncol (14):29-37, 2013 / Iwamoto S. Ann Oncol. Jul;26(7); 1427-33, 2015
2 Bennouna J. Lancet Oncol (14):29-37, 2023
3 FDA grants accelerated approval to adagrasib with cetuximab for KRAS G12C–mutated colorectal cancer. Published June 21, 2024. Accessed April 28, 2026. https://www.fda.gov/drugs/resources-information-approved-drugs/fda-grants-accelerated-approval-adagrasib-cetuximab-kras-g12c-mutated-colorectal-cancer
4 Bennouna J. Lancet Oncol (14):29-37, 2023
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During the second quarter of 2026, we continued with site initiation and expect that approximately half of the planned clinical sites will be activated during the third quarter of 2026.
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.
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 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, objective response rates are typically approximately 10% or less5, 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 therapy6. Enrollment in Cohort 4 has been completed and we 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 participated in a Type C meeting with the FDA in mid-April of 2026 and aligned on the design of a pivotal study in second-line or later SCAC in the U.S. The final study protocol is being finalized and is expected to be a randomized controlled trial of pelareorep and a checkpoint inhibitor, compared with a control arm, which could be sufficient for accelerated approval and full approval at different points in time within the same study.
In July 2026, the FDA granted Fast Track designation to pelareorep in combination with a checkpoint inhibitor for the treatment of patients with inoperable, locally recurrent or metastatic SCAC who have progressed on or were intolerant to one or more prior lines of systemic therapy.
Preclinical program
In June 2026, we announced initial data from a preclinical study evaluating pelareorep in combination with RAS inhibitor modalities in a solid tumor model, which demonstrate evidence of greater anti-tumor activity in combination than with the individual approaches alone. Based on these findings, we are planning additional studies in models of colorectal cancer and in pancreatic ductal adenocarcinoma designed to further evaluate the combinations’ effects on immune activation, tumor response durability, and time-to-resistance. The ongoing work includes evaluations of pelareorep in combination with KRAS G12C inhibitors, pan-RAS inhibitors, and additional next-generation RAS pathway-targeting agents in RAS-mutated tumor models.
Program development for the remainder of 2026
In 2026, our clinical objectives will primarily revolve around our randomized second-line mCRC clinical study. 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 in mPDAC and second-line or later SCAC. Preclinical objectives this year will focus on studies planned to evaluate pelareorep in combination with a range of RAS inhibitor modalities with initial results expected in the fall or winter of 2026.
5 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.
6 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
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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 the second quarter of 2026, we initiated an analytical study utilizing the human tumor cell line potency assay. We also updated the formal assessment of the drug substance production process with additional batch production and development data and progressed analytical development activities to support upcoming process characterization in preparation for process 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 June 30, 2026, we had 139 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 including method-of-using protection until 2040 and method-of-making protection until 2044.
In June 2026, we secured a new U.S. patent protecting our proprietary manufacturing process for pelareorep. Developed through our contracted collaboration with the National Research Council of Canada (“NRC”), this jointly arising intellectual property is automatically assigned to NRC and exclusively licensed to Oncolytics, subject to a nominal royalty, for the production and commercialization of pelareorep. The newly issued patent covers key aspects of the methods used to manufacture pelareorep and is expected to provide patent protection until 2044. The patent is designed to protect the Company’s ability to consistently produce pelareorep at commercial scale and represents a significant addition to the Company’s growing intellectual property portfolio. The Company also announced that a previously filed method-of-use patent application remains under review and, if issued, is expected to provide protection until at least 2046. In addition, Oncolytics plans to file further patent applications this year that are designed to expand and strengthen the pelareorep intellectual property estate across additional therapeutic applications, treatment settings, and combination approaches.
Financing Activity
On April 6, 2026, we entered into an Open Market Sale Agreement (the “Sales Agreement”) with Jefferies LLC (the “Agent”), pursuant to which we may offer and sell from time to time through or to the agent, acting as agent or principal, shares of our common stock, par value $0.001 per share, having an aggregate offering price of up to $75,000. During the three months ended June 30, 2026, we sold 7,859,359 common shares for gross proceeds of $7,152 at an average price of $0.91 per share. We received net proceeds of $6,771 after issuance costs of $381 (including commissions of $215).
From July 1, 2026 to August 10, 2026, we sold 2,322,984 common shares pursuant to the Sales Agreement for gross proceeds of $1,890 at an average price of $0.81 per share. We received net proceeds of $1,834 after commissions of $57.
Cash Resources
As of June 30, 2026, we had cash and cash equivalents of $4,115 (see “Liquidity and Capital Resources”).
Other Corporate Matters
In October 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 would 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. On March 31, 2026, we completed the Domestication and changed our jurisdiction to the State of Nevada.
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Components of Results of Operations
Research and Development Expenses (“R&D”)
Our R&D expenses consist primarily of costs incurred to conduct research and development on pelareorep, 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 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 relations, marketing communications, business development, financial advisory activities, legal and accounting fees, corporate insurance, 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, director fees, 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.
Results of Operations
Comparison of the three and six months ended June 30, 2026 and 2025:
Net loss for the three months ended June 30, 2026 was $9,442 compared to $5,277 for the three months ended June 30, 2025. Net loss for the six months ended June 30, 2026 was $18,685 compared to $9,988 for the six months ended June 30, 2025.
Research and Development Expenses
Our R&D expenses increased by $2,346 from $1,916 for the three months ended June 30, 2025, to $4,262 for the three months ended June 30, 2026. The following table summarizes our R&D expenses for the three months ended June 30, 2026 and 2025:
Three Months Ended June 30,
2026 2025 Change
Clinical trial expenses $ 1,056 $ 422 $ 634
Manufacturing and related process development expenses 413 425 (12)
Personnel-related expenses 2,699 1,045 1,654
All other R&D expenses 94 24 70
Total R&D expenses $ 4,262 $ 1,916 $ 2,346
The increase in our R&D expenses for the three months ended June 30, 2026, was primarily due to the following:
•Increased clinical trial expenses due to start-up costs for our phase 2 second-line mCRC study launched in the first
quarter of 2026.
•Increased personnel-related expenses due to increased non-cash stock-based compensation expense and increased headcount.
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Our R&D expenses increased by $4,098 from $4,716 for the six months ended June 30, 2025, to $8,814 for the six months ended June 30, 2026. The following table summarizes our R&D expenses for the six months ended June 30, 2026 and 2025:
Six Months Ended June 30,
2026 2025 Change
Clinical trial expenses $ 1,803 $ 792 $ 1,011
Manufacturing and related process development expenses 920 839 81
Personnel-related expenses 5,970 3,026 2,944
All other R&D expenses 121 59 62
Total R&D expenses $ 8,814 $ 4,716 $ 4,098
The increase in our R&D expenses for the six months ended June 30, 2026, was primarily due to the following:
•Increased clinical trial expenses due to start-up costs for our phase 2 second-line mCRC study launched in the first
quarter of 2026 and higher registration program planning-related expenses.
•Increased personnel-related expenses due to increased non-cash stock-based compensation expense and increased headcount. Our non-cash stock-based compensation expense also included an adjustment to reclassify options from equity-classified to liability classified as discussed in note 3 of the condensed consolidated financial statements. This increase was partly offset by CEO transition-related activities in the first quarter of 2025.
General and Administrative Expenses
Our G&A expenses increased by $2,382 from $2,735 for the three months ended June 30, 2025, to $5,117 for the three months ended June 30, 2026. The following table summarizes our G&A expenses for the three months ended June 30, 2026 and 2025:
Three Months Ended June 30,
2026 2025 Change
Public company-related expenses $ 3,368 $ 1,580 $ 1,788
Personnel-related expenses 1,371 888 483
Intellectual property expenses 149 85 64
All other G&A expenses 229 182 47
Total G&A expenses $ 5,117 $ 2,735 $ 2,382
The increase in our G&A expenses for the three months ended June 30, 2026 was primarily due to the following:
•Increased public company-related expenses due to higher investor relations activities and additional legal and tax professional fees associated with the Domestication. Our public company-related expenses for the three months ended June 30, 2026 included $603 of non-cash stock-based compensation expense for consulting services.
•Increased personnel-related expenses due to increased non-cash stock-based compensation expense and increased headcount.
Our G&A expenses increased by $4,890 from $4,956 for the six months ended June 30, 2025, to $9,846 for the six months ended June 30, 2026. The following table summarizes our G&A expenses for the six months ended June 30, 2026 and 2025:
Six Months Ended June 30,
2026 2025 Change
Public company-related expenses $ 6,384 $ 2,780 $ 3,604
Personnel-related expenses 2,601 1,625 976
Intellectual property expenses 451 192 259
All other G&A expenses 410 359 51
Total G&A expenses $ 9,846 $ 4,956 $ 4,890
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The increase in our G&A expenses for the six months ended June 30, 2026 was primarily due to the following:
•Increased public company-related expenses due to higher investor relations activities and legal, tax, audit and accounting professional fees related to the Domestication. Our public company-related expenses for the six months ended June 30, 2026 included $1,187 of non-cash stock-based compensation expense for consulting services.
•Increased personnel-related expenses due to increased non-cash stock-based compensation expense and increased headcount.
•Increased intellectual property expenses related to executing our patent extension strategy and new patent applications.
Liquidity and Capital Resources
As of June 30, 2026 and December 31, 2025, we had cash and cash equivalents as follows:
June 30, 2026 December 31, 2025
Cash and cash equivalents $ 4,115 $ 5,202
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:
Six Months Ended June 30,
2026 2025
Operating activities $ (15,431) $ (8,839)
Investing activities (6) (1)
Financing activities 14,385 8,277
Effect of exchange rate changes on cash (35) 205
Total increase (decrease) in cash and cash equivalents $ (1,087) $ (358)
Cash used in operating activities
The increase in net cash used in operating activities reflects higher operating activities and higher non-cash working capital changes in 2026. Overall, net cash used in operating activities for the six months ended June 30, 2026 and 2025 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 six months ended June 30, 2026 consisted of a net loss of $18,685 and non-cash working capital changes of $2,415, partially offset by non-cash adjustments of $5,669. Non-cash items primarily included stock-based compensation expense and the value of shares issued for consulting services. Non-cash working capital changes were primarily driven by increases in prepaid expenses and other receivables, including amounts related to the PanCAN Therapeutic Accelerator Award, and decreases in accrued liabilities and accounts payable.
Net cash used in operating activities for the six months ended June 30, 2025 consisted of a net loss of $9,988, offset by non-cash adjustments of $2,325, less non-cash working capital changes of $1,176. Non-cash working capital changes mainly reflected increased prepaid expenses and accounts payable and accrued liabilities and decreased other liabilities.
Net cash used by investing activities
Net cash used by investing activities for the six months ended June 30, 2026 and 2025 were related to the acquisition of property and equipment.
Net cash provided by financing activities
Net cash provided by financing activities during the six months ended June 30, 2026 consisted of net proceeds from sales of our common shares pursuant to ATM offering agreements. Net cash provided by financing activities during the six months ended June 30, 2025 consisted of net proceeds from sales of our common shares pursuant to our ATM and SEPA arrangements.
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Capital Requirements
As a clinical‑stage biopharmaceutical company, we have not been profitable since inception and do not expect to generate significant revenues unless and until pelareorep receives regulatory approval and becomes commercially viable. We expect to continue to incur operating losses as we advance pelareorep through clinical development and incur costs associated with manufacturing, intellectual property protection, and operating as a public company. Historically, we have funded our operations primarily through the issuance of equity securities, including public offerings, at‑the‑market equity programs, and the exercise of warrants.
Our near‑term capital requirements are driven primarily by the advancement of our second‑line metastatic colorectal cancer and second‑line or later squamous cell carcinoma of the anal canal programs, as well as ongoing manufacturing readiness activities and general corporate costs. Conducting clinical trials necessary to obtain regulatory approval is costly and time‑consuming, and the timing and cost required to complete such trials are inherently uncertain. As a result, we are unable to predict with certainty the duration or total costs of our research and development programs or when, if ever, we may generate revenues from the commercialization of pelareorep.
As discussed under “Going Concern,” our current cash resources are sufficient to fund near‑term operating milestones but are not sufficient to fund planned operations for at least twelve months from the date of issuance of our condensed consolidated financial statements included in this quarterly report. To support our near‑term liquidity needs, we have access to capital through the Sales Agreement with the Agent, which provides flexibility to raise capital opportunistically and manage our cash resources. We expect to continue to utilize this equity distribution arrangement as appropriate to support ongoing operations; however, there can be no assurance that sufficient capital will be available under this or other arrangements on acceptable terms or at all.
Our future capital requirements beyond the near term will depend on several factors, including the timing, scope, and results of our clinical trials; regulatory interactions and outcomes; the costs associated with manufacturing process validation and supply; potential partnerships or collaborations; and broader market conditions. Although our Board of Directors reviews and approves our annual budget and multi‑year operating plans, actual funding requirements may differ materially from our expectations due to the inherent risks and uncertainties associated with drug development.
To fund our operations beyond the near term, we expect to seek additional capital through the sale of equity securities, strategic collaborations, licensing arrangements, or other financing sources. Additional financings may result in dilution to existing shareholders, and any debt or collaborative financing, if available, may include terms that restrict our operating flexibility or require us to relinquish rights to pelareorep or future revenues. If we are unable to obtain additional financing when required, we may need to reduce or delay certain development activities, pursue strategic alternatives, or take other measures to conserve capital.
For the six months ended June 30, 2026, we raised net cash proceeds of $14,385 from the issuance of 15,305,933 common shares through our ATM offering agreement.
We are not subject to externally imposed capital requirements, and there have been no changes in how we define or manage our capital in 2026.
Contractual Obligations and Commitments
As of June 30, 2026, 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 $347 for activities mainly related to our manufacturing program, which are expected to occur over the next year. The ultimate amount and timing of these payments are subject to changes in our research and development plan.
As of June 30, 2026, we had not entered into any off-balance sheet arrangements.
Critical Accounting Policies and Estimates
There have been no material changes to our critical accounting policies and estimates from those disclosed in “Part II. Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates,” included in our annual report on Form 10-K for the fiscal year ended December 31, 2025, except for a change in the Company’s functional currency from the Canadian dollar to the U.S. dollar, effective January 1, 2026.
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Functional and Reporting Currency
Management uses its judgment to determine the functional currency that most accurately represents the economic effects of the underlying transactions, events and conditions and considered various factors including the currency of future expenditures and the currency in which funds from financing activities are generated. A company’s functional currency is only changed when significant changes in economic facts and circumstances indicate clearly that the functional currency has changed.
Effective January 1, 2026, the functional currency of Oncolytics Biotech Inc. and its subsidiary, Oncolytics Biotech (Barbados) Inc. was changed to the United States (U.S.) dollar (“USD”) from the Canadian dollar. The change was made to reflect that U.S. dollars has become the currency of the primary economic environment in which the Company operates, accounting for a significant part of the Company’s labor, operations and financing.
The change in functional currency was accounted for prospectively in accordance with ASC 830 – Foreign Currency Matters. Accordingly, translated balances at December 31, 2025 became the new accounting basis at January 1, 2026. Results of operations prior to the change were not restated.
Smaller Reporting Company Status
We are a “smaller reporting company” as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We may continue to be a smaller reporting company if either (i) the market value of our shares held by non-affiliates is less than $250 million as of the last business day of the most recently completed second fiscal quarter or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our shares held by non-affiliates was less than $700 million as of the last business day of the most recently completed second fiscal quarter.
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