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<SEC-DOCUMENT>0001130319-07-000057.txt : 20070206
<SEC-HEADER>0001130319-07-000057.hdr.sgml : 20070206
<ACCEPTANCE-DATETIME>20070206172543
ACCESSION NUMBER:		0001130319-07-000057
CONFORMED SUBMISSION TYPE:	F-10/A
PUBLIC DOCUMENT COUNT:		6
FILED AS OF DATE:		20070206
DATE AS OF CHANGE:		20070206

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ONCOLYTICS BIOTECH INC
		CENTRAL INDEX KEY:			0001129928
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		F-10/A
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-140460
		FILM NUMBER:		07585418

	BUSINESS ADDRESS:	
		STREET 1:		1167 KENSINGTON CRES NW SUITE 210
		STREET 2:		CALGARY ALBERTA CANADA T2N 1X7
		CITY:			ALBERTA CANADA
		STATE:			A0
		ZIP:			00000
		BUSINESS PHONE:		4036707380

	MAIL ADDRESS:	
		STREET 1:		210 - 1167 KENSINGTON CRES NW
		CITY:			CALGARY
		STATE:			A0
		ZIP:			T2N 1X7
</SEC-HEADER>
<DOCUMENT>
<TYPE>F-10/A
<SEQUENCE>1
<FILENAME>o34618a1fv10za.htm
<DESCRIPTION>AMENDMENT NO. 1 TO FORM F-10
<TEXT>
<HTML>
<HEAD>
<TITLE>fv10za</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">As filed
with the Securities and Exchange Commission on February 6, 2007<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.

</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Registration No.&nbsp;333-140460</B>
</DIV>


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>


<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>


<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>Amendment No. 1 to</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>Form&nbsp;F-10</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>REGISTRATION STATEMENT UNDER<BR>
THE SECURITIES ACT OF 1933</B>
</DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>ONCOLYTICS BIOTECH INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt"><I>(Exact name of Registrant as specified in its charter)</I></DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="31%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Alberta</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>2834</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>Not Applicable</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><I>(Province or other jurisdiction <BR>
of incorporation or organization)</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><I>(Primary Standard Industrial Classification<BR>
Code Number)</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><I>(I.R.S. Employer<BR>
Identification Number)</I></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Suite #210, 1167 Kensington Crescent N.W.<BR>
Calgary, Alberta<BR>
Canada T2N 1X7<BR>
(403)&nbsp;670-7377</B></DIV>

<DIV align="center" style="font-size: 10pt"><I>(Address and Telephone Number of Registrant&#146;s Principal Executive Offices)</I></DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>DL Services, Inc.<BR>
1420 Fifth Avenue, Suite&nbsp;3400<BR>
Seattle, Washington 98101<BR>
(206)&nbsp;903-8800</B></DIV>

<DIV align="center" style="font-size: 10pt"><I>(Name, Address (including Zip Code) and Telephone Number (including Area Code) of Agent for
Service<BR>
in the United States)</I></DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Copies to:</B></DIV>

<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="18%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Douglas A. Ball <BR>
Oncolytics Biotech Inc. <BR>
210-1167 Kensington Cr.<BR>
N. W.<BR>
Calgary, Alberta <BR>
Canada T2N 1X7<BR>
Telephone: (403)&nbsp;670-<BR>
7377
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Randal Jones<BR>
Jason K. Brenkert<BR>
370, 17<SUP style="font-size: 85%; vertical-align: text-top">th</SUP>
Street, Suite<BR>4700<BR>
Denver, Colorado 80202<BR>
Telephone: (303)&nbsp;629-<BR>
3400
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Brent W. Kraus<BR>
Bennett Jones LLP<BR>
4500,<BR>
855 2<SUP style="font-size: 85%; vertical-align: text-top">nd</SUP>
Street SW<BR>
Calgary, Alberta<BR>
Canada T2P 4K7<BR>
Telephone: (403)&nbsp;298-3071
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Kevin Keogh<BR>
White &#038; Case LLP<BR>
1155 Avenue of the<BR>
Americas<BR>
New York, New York 10036<BR>
Telephone: (212)&nbsp;819-8270
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Iain Mant<BR>
Fasken Martineau DuMoulin<BR>
LLP<BR>
2100-1075 West Georgia<BR>
Street<BR>
Vancouver, British Columbia<BR>
Canada V6E 3G2<BR>
Telephone: (604)&nbsp;631-4734</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Approximate date of commencement of proposed sale of the securities to the public:</B><BR>
As soon as practicable after this Registration Statement becomes effective.</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Province of Alberta, Canada</B></DIV>

<DIV align="center" style="font-size: 10pt"><I>(Principal jurisdiction regulating this offering)</I></DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">It is proposed that this filing shall become effective (check appropriate box):
</DIV>






<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">A.</TD>
    <TD width="2%"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>Upon filing with the Commission, pursuant to Rule
467(a) (if in connection with an offering being made
contemporaneously in the United States and Canada).</TD>
</TR>



<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>



<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">B.</TD>
    <TD width="2%"><FONT face="Wingdings">&#254;</FONT></TD>
    <TD>At some future date (check the appropriate box below):</TD>
</TR>


<TR valign="top" style="font-size: 8pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>




</TABLE>
</DIV>






<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">1.</TD>
    <TD width="2%"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>pursuant to Rule 467(b) on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (date)&nbsp;at <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (time) (designate a time not sooner than 7 calendar days after filing).</TD>
</TR>

<TR>
    <TD style="font-size: 10pt">&nbsp;</TD>
</TR>




<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">2.</TD>
    <TD width="2%"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>pursuant to Rule 467(b) on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (date)&nbsp;at <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (time) (designate a time 7 calendar days or sooner after filing)
because the securities regulatory authority in the review jurisdiction has issued a receipt or notification of
clearance on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (date).</TD>
</TR>

<TR>
    <TD style="font-size: 10pt">&nbsp;</TD>
</TR>


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">3.</TD>
    <TD width="2%"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>pursuant to Rule 467(b) as soon as practicable after notification of the Commission by the Registrant or the
Canadian securities regulatory authority of the review jurisdiction that a receipt or notification of
clearance has been issued with respect hereto.</TD>
</TR>

<TR>
    <TD style="font-size: 10pt">&nbsp;</TD>

</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">4.</TD>
    <TD width="2%"><FONT face="Wingdings">&#254;</FONT></TD>
    <TD>after the filing of the next amendment to this Form (if preliminary material is being filed).</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If any of the securities being registered on this Form are to be offered on a delayed or continuous
basis pursuant to the home jurisdiction&#146;s shelf prospectus offering procedures, check the following
box. <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>The Registrant hereby amends this Registration Statement on such date or dates as may be necessary
to delay its effective date until the registration statement shall become effective as provided in
Rule&nbsp;467 under the Securities Act, or on such date as the Commission, acting pursuant to Section
8(a) of the Securities Act, may determine.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Explanatory note: The Registrant hereby amends its Registration Statement on form F-10,
previously filed with the Commission on February&nbsp;5, 2007, to include the amended and restated preliminary short form prospectus filed with the
Alberta Securities Commission, which contains the final pricing information for the offering of the Registrant&#146;s units in Canada and the United States.</B>
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>





<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">








<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART I</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>INFORMATION REQUIRED TO BE DELIVERED<BR>
TO OFFEREES OR PURCHASERS</B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 94%; margin-left: 3%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I><FONT style="font-size: 6pt; color: #E8112D">A copy of
    this amended and restated preliminary short form prospectus has
    been filed with the securities regulatory authorities in each of
    the provinces of Alberta, British Columbia, Manitoba and Ontario
    but has not yet become final for the purpose of the sale of
    securities. Information contained in this amended and restated
    preliminary short form prospectus may not be complete and may
    have to be amended. These securities may not be sold until a
    receipt for the short form prospectus is obtained from the
    securities regulatory authorities.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 6pt">No securities regulatory
    authority has expressed an opinion about these securities and it
    is an offence to claim otherwise.</FONT></I>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 6pt; color: #E8112D">Information
    contained herein is subject to completion or amendment. A
    registration statement relating to these securities has been
    filed with the U.S. Securities and Exchange Commission. These
    securities may not be sold nor may offers to buy be accepted
    prior to the time the registration statement becomes effective.
    This prospectus shall not constitute an offer to sell or the
    solicitation of an offer to buy nor shall there be any sale of
    these securities in any U.S. state in which such offer,
    solicitation or sale would be unlawful prior to registration or
    qualification under the securities laws of any such U.S.
    state.</FONT></I>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 6pt">Information has been
    incorporated by reference in this short form prospectus from
    documents filed with securities commissions or similar
    authorities in Canada. Copies of the documents incorporated
    herein by reference may be obtained on request without charge
    from the Corporate Secretary of Oncolytics Biotech Inc. at
    Suite&#160;210, 1167 Kensington Crescent N.W., Calgary, Alberta
    T2N&#160;1X7, telephone
    <FONT style="white-space: nowrap">(403)&#160;670-7377.</FONT>
    In addition, copies of documents incorporated by reference may
    be obtained from the securities commissions or similar
    authorities in Canada through the SEDAR website at
    www.sedar.com. See &#147;Documents Incorporated by
    Reference&#148;.</FONT></I>
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 9pt">Amended and Restated Preliminary
    Short Form&#160;Prospectus</FONT></B>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">    <I><FONT style="font-size: 9pt; font-family: 'Times New Roman', Times">New
    Issue</FONT></I></TD>
    <TD nowrap align="right">    <FONT style="font-size: 9pt; font-family: 'Times New Roman', Times">February&#160;6,
    2007
    </FONT></TD>
</TR>

</TABLE>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="o34618a1o3461800.gif" alt="(ONCOLYTICS LOGO)" ><FONT style="font-size: 9pt">
    </FONT>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">$12,000,000</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">4,000,000&#160;Units</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 7pt">We are offering
    4,000,000&#160;units at a price of $3.00&#160;per unit. Each
    unit consists of one of our common shares and one-half of one
    common share purchase warrant. One whole common share purchase
    warrant will entitle the holder to purchase one of our common
    shares upon payment of $3.50 at any time until 5:00&#160;p.m.
    (Calgary time) on the date that is 36&#160;months following the
    closing of this offering. The common shares and the warrants
    comprising the units will separate immediately upon the closing
    of this offering. See &#147;Details of the Offering&#148;. Our
    outstanding common shares are listed for trading on the Toronto
    Stock Exchange (the <B>&#147;TSX&#148;</B>) under the trading
    symbol &#147;ONC&#148; and on the NASDAQ Capital Market
    (<B>&#147;NASDAQ&#148;</B>) under the trading symbol
    &#147;ONCY&#148;. On February&#160;2, 2007, the last trading day
    prior to the announcement of this offering, the closing price of
    our common shares on the TSX was $3.25 and on NASDAQ was
    U.S.$2.74 and on February&#160;5, 2007, the closing price of our
    common shares on the TSX was $3.25 and on NASDAQ was U.S.$2.73.
    <B>The offering price of our units was determined by negotiation
    between us and the underwriter, Canaccord Capital Corporation.
    There is no market through which the common share purchase
    warrants may be sold and purchasers may not be able to resell
    the common share purchase warrants purchased under this short
    form prospectus. This may affect the pricing of the common share
    purchase warrants in the secondary market, the transparency and
    availability of trading prices, the liquidity of such warrants,
    and the extent of issuer regulation. See &#147;Risk
    Factors&#148;.</B>
    </FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 7pt">An investment in the units and
    the underlying securities comprising the units should be
    considered highly speculative due to the stage and nature of our
    business and should only be made by persons who can afford a
    total loss of their investment.</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 7pt">We are permitted, under a
    multi-jurisdictional disclosure system adopted by the United
    States and Canada, to prepare this prospectus in accordance with
    Canadian disclosure requirements. You should be aware that such
    requirements are different from those of the United States. We
    have prepared our financial statements in accordance with
    Canadian generally accepted accounting principles, and they are
    subject to Canadian auditing and auditor independence standards.
    Thus, they may not be comparable to the financial statements of
    U.S. companies. Information regarding the impact upon our
    financial statements of significant differences between Canadian
    and U.S. generally accepted accounting principles is contained
    in the notes to the financial statements incorporated by
    reference in this prospectus.</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 7pt">You should be aware that the
    purchase of the units may have tax consequences both in the
    United States and Canada. This prospectus may not describe these
    tax consequences fully for investors who are resident in, or
    citizens of, the United States. You should read the tax
    discussion in this prospectus.</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 7pt">Your ability to enforce civil
    liabilities under U.S. federal securities laws may be affected
    adversely by the fact that we are incorporated under the laws of
    Canada, the majority of our officers, all of our directors and
    most of the experts named in this prospectus are residents of
    Canada, and a substantial portion of our assets and the assets
    of such persons are located outside the United States.</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 7pt">There are certain risk factors
    that should be carefully reviewed by prospective purchasers. See
    &#147;Risk Factors&#148;.</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 26%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=142 -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Price: $3.00&#160;per Unit</B>
</DIV>

<CENTER style="font-size: 1pt; width: 26%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=142 -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="46%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="17%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="17%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="17%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Underwriter&#146;s<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Net Proceeds to<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Price</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Fee</B><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>the
    Corporation</B><SUP style="font-size: 85%; vertical-align: text-top">(2)(3)</SUP>
</DIV>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Per unit
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <FONT style="font-size: 8pt">$3.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <FONT style="font-size: 8pt">$0.24
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <FONT style="font-size: 8pt">$2.76
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Total offering
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <FONT style="font-size: 8pt">$12,000,000
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <FONT style="font-size: 8pt">$960,000
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <FONT style="font-size: 8pt">$11,040,000
    </FONT>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="font-size: 4pt; margin-left: 0%; width: 11%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=540 length=60 -->



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 7pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Notes:</B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top" style="font-size: 7pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    (1)&#160;
</TD>
    <TD align="left">    The underwriter&#146;s fee represents 8% of the offering price.
</TD>
</TR>

<TR style="line-height: 2pt; font-size: 1pt"><TD>&nbsp;</TD></TR>



<TR valign="top" style="font-size: 7pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    (2)&#160;
</TD>
    <TD align="left">    Before deducting the expenses associated with this offering,
    estimated to be $400,000. We will pay the expenses from the
    proceeds of this offering.
</TD>
</TR>

<TR style="line-height: 2pt; font-size: 1pt"><TD>&nbsp;</TD></TR>



<TR valign="top" style="font-size: 7pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    (3)&#160;
</TD>
    <TD align="left">    The underwriter has been granted an option (the
    <B>&#147;Over-allotment Option&#148;</B>), exercisable, in whole
    or in part, not later than 30&#160;days after closing of the
    offering, to purchase up to 600,000 units at a price of
    $3.00&#160;per unit. This short form prospectus qualifies both
    the grant of the Over-allotment Option and the issuance of the
    units upon exercise of the Over-allotment Option. If the
    Over-allotment Option is fully exercised, the total offering,
    underwriter&#146;s fee and net proceeds to the Corporation will
    be $13,800,000, $1,104,000&#160;and $12,696,000, respectively.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="28%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="23%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="23%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="23%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Underwriter&#146;s Position</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Maximum Size</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Exercise Period</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Exercise Price</B>
</DIV>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Over-allotment Option
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    <FONT style="font-size: 8pt">600,000 units
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Exercisable not later than
    30&#160;days after closing of the offering
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <FONT style="font-size: 8pt">$3.00&#160;per unit
    </FONT>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 7pt">Canaccord Capital Corporation, the
    underwriter, as principal, conditionally offers these
    securities, subject to prior sale, if, as and when issued by us
    and accepted by the underwriter in accordance with the
    conditions contained in the Underwriting Agreement referred to
    under the heading &#147;Plan of Distribution&#148; and subject
    to the approval of certain legal matters on behalf of us by
    Bennett Jones LLP and Dorsey&#160;&#38; Whitney LLP, and on
    behalf of the underwriter by Fasken Martineau DuMoulin LLP and
    White&#160;&#38; Case LLP.
    </FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 7pt">Subscriptions for the units will be
    received subject to rejection or allotment in whole or in part
    and the right is reserved to close the subscription books at any
    time without notice. Definitive certificates representing the
    common shares and the common share purchase warrants are
    expected to be available for delivery at the closing of this
    offering which is expected to occur on or about
    February&#160;22, 2007 or such other date as we and the
    underwriter may mutually agree, but in any event not later than
    March&#160;22, 2007. In connection with this offering, the
    underwriter may over-allot or effect transactions that stabilize
    or maintain the market price of our common shares at a level
    other than that which might otherwise prevail in the open
    market. Such transactions, if commenced, may be discontinued at
    any time. See &#147;Plan of Distribution&#148;.
    </FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 7pt">In the opinion of our counsel,
    Bennett Jones LLP, and counsel to the underwriter, Fasken
    Martineau DuMoulin LLP (collectively,
    <B>&#147;Counsel&#148;</B>), our common shares offered hereby
    will, at the date hereof, be qualified investments under the
    <I>Income Tax Act</I> (Canada) (the <B>&#147;Tax Act&#148;</B>)
    and the regulations thereunder as in effect on the date hereof
    for trusts governed by registered retirement savings plans,
    registered retirement income funds, registered education savings
    plans and deferred profit sharing plans (<B>&#147;Exempt
    Plans&#148;</B>). In the opinion of Counsel, provided that we
    deal at arm&#146;s length (within the meaning of the Tax Act)
    with each person who is an annuitant, a beneficiary, an employer
    or a subscriber under, or in relation to, an Exempt Plan, as the
    case be, our common share purchase warrants offered hereby will,
    at the date hereof, be qualified investments under the Tax Act
    and the regulations thereunder as in effect on the date hereof
    for Exempt Plans.
    </FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 7pt">Neither the U.S. Securities and
    Exchange Commission nor any state securities commission has
    approved or disapproved these securities or determined if this
    prospectus is truthful or complete. Any representation to the
    contrary is a criminal offence.</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 7pt">You should rely only on the
    information contained in this prospectus. Neither we nor the
    underwriter have authorized anyone to provide you with
    information different from that contained in this prospectus. We
    are offering to sell, and seeking offers to buy, our units only
    in jurisdictions where, and to persons to whom, offers and sales
    are lawfully permitted. The information contained in this
    prospectus is accurate only as of the date of this prospectus,
    regardless of the time of delivery of this prospectus or of any
    sale of our units.</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 7pt">Our head office and principal place
    of business is located at 210, 1167 Kensington Crescent N.W.,
    Calgary, Alberta T2N 1X7. Our registered office is located at
    4500 Bankers Hall East,
    <FONT style="white-space: nowrap">855-2nd&#160;Street</FONT>
    S.W., Calgary, Alberta T2P&#160;4K7.
    </FONT>
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS</FONT></B>
</DIV>
<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="tocpage"></A>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>



<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="89%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="4%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="right" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Page</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#101'><FONT style="font-size: 10pt">DEFINITIONS AND
    OTHER MATTERS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">2
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#102'><FONT style="font-size: 10pt">SPECIAL NOTICE
    REGARDING FORWARD-LOOKING STATEMENTS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">2
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#103'><FONT style="font-size: 10pt">ELIGIBILITY FOR
    INVESTMENT</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">3
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#104'><FONT style="font-size: 10pt">DOCUMENTS
    INCORPORATED BY REFERENCE</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">3
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#105'><FONT style="font-size: 10pt">WHERE YOU CAN FIND
    ADDITIONAL INFORMATION</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">4
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#106'><FONT style="font-size: 10pt">ENFORCEABILITY OF
    CIVIL LIABILITIES</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">5
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#107'><FONT style="font-size: 10pt">DOCUMENTS FILED AS
    PART&#160;OF THE REGISTRATION STATEMENT</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">5
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#108'><FONT style="font-size: 10pt">RISK
    FACTORS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">5
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#109'><FONT style="font-size: 10pt">ONCOLYTICS BIOTECH
    INC.&#160;</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">11
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#110'><FONT style="font-size: 10pt">OUR
    BUSINESS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">11
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#111'><FONT style="font-size: 10pt">RECENT
    DEVELOPMENTS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">12
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#112'><FONT style="font-size: 10pt">USE OF
    PROCEEDS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">17
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#113'><FONT style="font-size: 10pt">CAPITALIZATION</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">18
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#114'><FONT style="font-size: 10pt">DETAILS OF THE
    OFFERING</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">18
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#115'><FONT style="font-size: 10pt">PLAN OF
    DISTRIBUTION</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">19
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#116'><FONT style="font-size: 10pt">CANADIAN FEDERAL
    INCOME TAX CONSIDERATIONS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">20
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#117'><FONT style="font-size: 10pt">U.S. FEDERAL INCOME
    TAX CONSIDERATIONS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">23
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#118'><FONT style="font-size: 10pt">LEGAL
    MATTERS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">32
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#119'><FONT style="font-size: 10pt">LEGAL
    PROCEEDINGS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">32
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#120'><FONT style="font-size: 10pt">AUDITORS, TRANSFER
    AGENT AND REGISTRAR</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">32
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#121'><FONT style="font-size: 10pt">STATUTORY RIGHTS OF
    WITHDRAWAL AND RESCISSION</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">32
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#122'><FONT style="font-size: 10pt">AUDITORS&#146;
    CONSENT</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">33
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#123'><FONT style="font-size: 10pt">CERTIFICATE OF THE
    CORPORATION</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">C-1
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#124'><FONT style="font-size: 10pt">CERTIFICATE OF THE
    UNDERWRITER</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">C-2
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="o34618a1exv5w1.htm">Exhibit 5.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="o34618a1exv5w2.htm">Exhibit 5.2</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="o34618a1exv5w3.htm">Exhibit 5.3</A></FONT></TD></TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>
<A name='101'>
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DEFINITIONS
    AND OTHER MATTERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In this prospectus, unless otherwise indicated, references to
    &#147;we&#148;, &#147;us&#148;, &#147;our&#148;,
    &#147;Oncolytics&#148; or the &#147;Corporation&#148; are to
    Oncolytics Biotech Inc. All references to &#147;dollars&#148;,
    &#147;Cdn.$&#148; or &#147;$&#148; are to Canadian dollars and
    all references to &#147;U.S.$&#148; are to United States
    dollars. Unless otherwise indicated, all financial information
    included and incorporated by reference in this prospectus is
    determined using Canadian generally accepted accounting
    principles.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus is part of a registration statement on
    <FONT style="white-space: nowrap">Form&#160;F-10</FONT>
    relating to the units that we filed with the
    U.S.&#160;Securities and Exchange Commission (the
    <B>&#147;SEC&#148;</B>). This prospectus does not contain all of
    the information contained in the registration statement, certain
    parts of which are omitted in accordance with the rules and
    regulations of the SEC. You should refer to the registration
    statement and the exhibits to the registration statement for
    further information with respect to us and the units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We prepare our financial statements in accordance with Canadian
    generally accepted accounting principles (<B>&#147;Canadian
    GAAP&#148;</B>), which differ from U.S. generally accepted
    accounting principles (<B>&#147;U.S. GAAP&#148;</B>). Therefore,
    our financial statements incorporated by reference in this
    prospectus and in the documents incorporated by reference in
    this prospectus may not be comparable to financial statements
    prepared in accordance with U.S. GAAP. You should refer to
    Note&#160;20 of our financial statements for the year ended
    December&#160;31, 2005 for a discussion of the principal
    differences between our financial results determined under
    Canadian GAAP and under U.S. GAAP. For our financial statements
    as at September&#160;30, 2006, you should refer to our
    reconciliation of our financial statements as at
    September&#160;30, 2006 and for the three and nine months ended
    September&#160;30, 2006 to U.S. GAAP furnished to the SEC on the
    Company&#146;s Current Report on
    <FONT style="white-space: nowrap">Form&#160;6-K</FONT>
    dated February&#160;5, 2007 and incorporated into this document
    by reference. See &#147;Documents Incorporated by
    Reference&#148;.
</DIV>
<A name='102'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SPECIAL
    NOTICE REGARDING FORWARD-LOOKING STATEMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Some of the statements that we make contain forward-looking
    statements reflecting our current beliefs, plans, estimates and
    expectations. Readers are cautioned that these forward-looking
    statements involve risks and uncertainties, including, without
    limitation, clinical trial study delays, product development
    delays, our ability to attract and retain business partners,
    future levels of government funding, competition from other
    biotechnology companies and our ability to obtain the capital
    required for research, product development, operations and
    marketing. These factors should be carefully considered and
    readers should not place undue reliance on our forward-looking
    statements. Actual events may differ materially from our current
    expectations due to risks and uncertainties.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    2
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our statements of &#147;belief&#148;, &#147;estimates&#148;,
    &#147;expectations&#148; and other similar statements are based
    primarily upon our results derived to date from our research and
    development program with animals and early stage human results
    and upon which we believe we have a reasonable scientific basis
    to expect the particular results to occur. It is not possible to
    predict, based upon studies in animals or early stage human
    results, whether a new therapeutic will be proved to be safe and
    effective in humans. There can be no assurance that the
    particular result expected by us will occur. Except as required
    by applicable securities laws, we undertake no obligation to
    update publicly any forward-looking statements for any reason
    after the date of this prospectus or to conform these statements
    to actual results or to changes in our expectations.
</DIV>
<A name='103'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ELIGIBILITY
    FOR INVESTMENT</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The common shares and common share purchase warrants, as of the
    date hereof, are eligible investments, where applicable, subject
    to compliance with the prudent investment standards and general
    investment provisions and restrictions of the statutes referred
    to below (and, where applicable, regulations or guidelines
    thereunder) and, in certain cases, subject to the satisfaction
    of additional requirements relating to investment or lending
    policies and procedures and, in certain cases, the filing of
    such investment policies and procedures, under the following
    statutes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Insurance Companies Act</I> (Canada)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Pension Benefits Standards Act, 1985</I> (Canada)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Cooperative Credit Associations Act</I> (Canada)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Trust and Loan Companies Act</I> (Canada)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Financial Institutions Act</I> (British Columbia)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Pension Benefits Standards Act</I> (British Columbia)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Alberta Heritage Savings Trust&#160;Fund&#160;Act</I>
    (Alberta)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Employment Pension Plans Act</I> (Alberta)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Insurance Act</I> (Alberta)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Loan and Trust&#160;Corporations Act</I> (Alberta)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>The Insurance Act</I> (Manitoba)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>The Pension Benefits Act</I> (Manitoba)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>The Trustee Act</I> (Manitoba)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Loan and Trust&#160;Corporations Act</I> (Ontario)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Pension Benefits Act</I> (Ontario)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Trustee Act</I> (Ontario)
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, in the opinion of Counsel, our common shares
    offered hereby will, at the date hereof, be qualified
    investments under the Tax Act and the regulations thereunder as
    in effect on the date hereof for trusts governed by Exempt
    Plans. In the opinion of Counsel, provided that we deal at
    arm&#146;s length (within the meaning of the Tax Act) with each
    person who is an annuitant, a beneficiary, an employer or a
    subscriber under, or in relation to, an Exempt Plan, as the case
    may be, our common share purchase warrants offered hereby will,
    at the date hereof, be qualified investments under the Tax Act
    and the regulations thereunder as in effect on the date hereof
    for Exempt Plans.
</DIV>
<A name='104'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DOCUMENTS
    INCORPORATED BY REFERENCE</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Information has been incorporated by reference in this short
    form prospectus from documents filed with securities commissions
    or similar authorities in Canada</B>. Copies of the documents
    incorporated herein by reference may be obtained on request
    without charge from our Corporate Secretary at Suite&#160;210,
    1167 Kensington Crescent N.W., Calgary, Alberta T2N 1X7,
    telephone
    <FONT style="white-space: nowrap">(403)&#160;670-7377.</FONT>
    In addition, copies of documents incorporated by reference may
    be obtained from the securities commissions or similar
    authorities in Canada through the SEDAR website at www.sedar.com.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have filed the following documents with the securities
    commissions or similar regulatory authorities in the provinces
    of Canada and such documents are specifically incorporated by
    reference in this prospectus:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our Renewal Annual Information Form dated March&#160;2, 2006,
    for the year ended December&#160;31, 2005 (the
    <B>&#147;AIF&#148;</B>);
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our Management Proxy Circular dated March&#160;24, 2006 relating
    to the annual and special meeting of shareholders held on
    April&#160;26, 2006, excluding those portions which are not
    prescribed by applicable securities laws;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our audited financial statements, together with the accompanying
    notes to the financial statements, for the fiscal years ended
    December&#160;31, 2005 and 2004 and the auditors&#146; report
    thereon addressed to our shareholders;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our management&#146;s discussion and analysis of financial
    condition and results of operations dated March&#160;2, 2006,
    for the year ended December&#160;31, 2005;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our unaudited interim financial statements as at
    September&#160;30, 2006 and for the three and nine months ended
    September&#160;30, 2006, together with the notes thereto;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    3
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our management&#146;s discussion and analysis of financial
    condition and results of operations dated November&#160;2, 2006,
    for the three and nine months ended September&#160;30, 2006; and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the reconciliation of our financial statements as at
    September&#160;30, 2006 and for the three and nine months ended
    September&#160;30, 2006 to U.S.&#160;GAAP, filed on
    February&#160;5, 2007 under the heading &#147;Other&#148;.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any documents of the type required by National Instrument
    44-101&#160;&#151; <I>Short Form&#160;Prospectus
    Distributions</I> of the Canadian Securities Administrators to
    be incorporated by reference in a short form prospectus,
    including any annual information form, comparative annual
    financial statements and the auditors&#146; report thereon,
    comparative interim financial statements, management&#146;s
    discussion and analysis of financial condition and results of
    operations, material change report (except a confidential
    material change report), business acquisition report and
    information circular, if filed by us with the securities
    commissions or similar authorities in the provinces of Canada
    after the date of this prospectus and before the termination of
    the distribution, shall be deemed to be incorporated by
    reference in this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, we incorporate by reference our reconciliation of
    our financial statements as at September&#160;30, 2006 and for
    the three and nine months ended September&#160;30, 2006 to U.S.
    GAAP furnished to the SEC on our Current Report on
    <FONT style="white-space: nowrap">Form&#160;6-K</FONT>
    dated February&#160;5, 2007. Any report filed by us with the SEC
    pursuant to section 13(a), 13(c), 14 or 15(d) of the United
    States Securities Exchange Act of 1934 after the date of this
    prospectus until the termination of this distribution shall be
    deemed to be incorporated by reference into the registration
    statement of which this prospectus forms a part, if and to the
    extent expressly provided in such report.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Any statement contained in this prospectus or in a document
    incorporated or deemed to be incorporated by reference herein
    will be deemed to be modified or superseded for purposes of this
    prospectus to the extent that a statement contained in this
    prospectus or in any other subsequently filed document which
    also is, or is deemed to be, incorporated by reference into this
    prospectus modifies or supersedes that statement. The modifying
    or superseding statement need not state that it has modified or
    superseded a prior statement or include any other information
    set forth in the document that it modifies or supersedes. The
    making of a modifying or superseding statement shall not be
    deemed an admission for any purposes that the modified or
    superseded statement when made, constituted a misrepresentation,
    an untrue statement of a material fact or an omission to state a
    material fact that is required to be stated or that is necessary
    to make a statement not misleading in light of the circumstances
    in which it was made. Any statement so modified or superseded
    shall not be deemed, except as so modified or superseded, to
    constitute part of this prospectus.</B>
</DIV>
<A name='105'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">WHERE YOU
    CAN FIND ADDITIONAL INFORMATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have filed with the SEC a registration statement on
    <FONT style="white-space: nowrap">Form&#160;F-10</FONT>
    relating to the units. This prospectus, which constitutes a part
    of the registration statement, does not contain all of the
    information contained in the registration statement, certain
    items of which are contained in the exhibits to the registration
    statement as permitted by the rules and regulations of the SEC.
    Statements included or incorporated by reference in this
    prospectus about the contents of any contract, agreement or
    other documents referred to are not necessarily complete, and in
    each instance, you should refer to the exhibits for a more
    complete description of the matter involved. Each such statement
    is qualified in its entirety by such reference.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We file annual and quarterly financial information and material
    change reports and other material with the SEC and with the
    securities commissions or similar regulatory authorities in
    Canada. Under a multi-jurisdictional disclosure system adopted
    by the United States, documents and other information that we
    file with the SEC may be prepared in accordance with the
    disclosure requirements of Canada, which are different from
    those of the United States. You may read and copy any document
    that we have filed with the SEC at the SEC&#146;s public
    reference rooms in Washington, D.C. and Chicago, Illinois. You
    may also obtain copies of those documents from the public
    reference room of the SEC at 100&#160;F&#160;Street, N.E.,
    Washington, D.C. 20549 by paying a fee. You should call the SEC
    at
    <FONT style="white-space: nowrap">1-800-SEC-0330</FONT>
    or access its website at www.sec.gov for further information
    about the public reference rooms. You may read and download some
    of the documents we have filed with the SEC&#146;s Electronic
    Data Gathering and Retrieval system at www.sec.gov. You may read
    and download any public document that we have filed with the
    securities commissions or similar regulatory authorities in
    Canada at www.sedar.com.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    4
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->
<A name='106'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ENFORCEABILITY
    OF CIVIL LIABILITIES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are a corporation existing under the <I>Business Corporations
    Act</I> (Alberta). All of our directors, the majority of our
    officers, and some of the experts named in this prospectus, are
    residents of Canada or otherwise reside outside the United
    States, and all, or a substantial portion of their assets and a
    substantial portion of our assets, are located outside the
    United States. We have appointed an agent for service of process
    in the United States, but it may be difficult for holders of
    units who reside in the United States to effect service within
    the United States upon those directors, officers and experts who
    are not residents of the United States. It may also be difficult
    for holders of units who reside in the United States to realize
    in the United States upon judgments of courts of the United
    States predicated upon our civil liability and the civil
    liability of our directors, officers and experts under the
    United States federal securities laws. We have been advised by
    our Canadian counsel, Bennett Jones LLP, that a judgment of a
    United States court predicated solely upon civil liability under
    United States federal securities laws would probably be
    enforceable in Canada if the United States court in which the
    judgment was obtained has a basis for jurisdiction in the matter
    that would be recognized by a Canadian court for the same
    purposes. We have also been advised by Bennett Jones LLP,
    however, that there is substantial doubt whether an action could
    be brought in Canada in the first instance on the basis of
    liability predicated solely upon United States federal
    securities laws.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We filed with the SEC, concurrently with our registration
    statement on
    <FONT style="white-space: nowrap">Form&#160;F-10,</FONT>
    an appointment of agent for service of process on
    <FONT style="white-space: nowrap">Form&#160;F-X.</FONT>
    Under the
    <FONT style="white-space: nowrap">Form&#160;F-X,</FONT>
    we appointed DL Services, Inc. at 1420, Fifth Avenue,
    Suite&#160;3400, Seattle, Washington 98101 as our agent for
    service of process in the United States in connection with any
    investigation or administrative proceeding conducted by the SEC,
    and any civil suit or action brought against or involving us in
    a United States court arising out of, related to, or concerning
    the offering of the units under this prospectus.
</DIV>
<A name='107'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DOCUMENTS
    FILED AS PART&#160;OF THE REGISTRATION STATEMENT</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following documents have been or will be filed with the SEC
    as part of the registration statement of which this prospectus
    forms a part: (i)&#160;the documents referred to under the
    heading &#147;Documents Incorporated by Reference&#148;;
    (ii)&#160;the Underwriting Agreement (as defined below);
    (iii)&#160;the Warrant Indenture (as defined below);
    (iv)&#160;consent of Ernst&#160;&#38; Young LLP;
    (v)&#160;consent of Bennett Jones LLP; (vi)&#160;consent of
    Fasken Martineau DuMoulin LLP; and (vii)&#160;powers of attorney
    from our directors and officers.
</DIV>
<A name='108'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">RISK
    FACTORS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>A prospective purchaser of our units should carefully
    consider the list of risk factors set forth below as well as the
    other information contained in and incorporated by reference in
    this prospectus before purchasing our units.</B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">All of
    our potential products, including
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>,
    are in the research and development stage and will require
    further development and testing before they can be marketed
    commercially.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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. We are currently in the research and
    development stage on one product,
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>,
    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
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    will prove to be safe and effective in humans.
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    will require additional research and development, including
    extensive additional clinical testing, before we will be able to
    obtain the approvals of the relevant regulatory authorities in
    applicable countries to market
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    commercially. There can be no assurance that the research and
    development programs we conducted will result in
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    or any other products becoming commercially viable products, and
    in the event that any product or products result from the
    research and development program, it is unlikely they will be
    commercially available for a number of years.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To achieve profitable operations we, alone or with others, must
    successfully develop, introduce and market our products. 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
    favourable results. If we are unable to establish that
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    is a safe, effective treatment for cancer, we may be required to
    abandon further development of the product and develop a new
    business strategy.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    5
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">There are
    inherent risks in pharmaceutical research and
    development.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pharmaceutical research and development is highly speculative
    and involves a high and significant degree of risk. The
    marketability of any product we develop will be affected by
    numerous factors beyond our control, including but not limited
    to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the discovery of unexpected toxicities or lack of sufficient
    efficacy of products which make them unattractive or unsuitable
    for human use;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    preliminary results as seen in animal and/or limited human
    testing may not be substantiated in larger, controlled clinical
    trials;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    manufacturing costs or other production factors may make
    manufacturing of products ineffective, impractical and
    non-competitive;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    proprietary rights of third parties or competing products or
    technologies may preclude commercialization;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    requisite regulatory approvals for the commercial distribution
    of products may not be obtained; and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    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.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our products under development have never been manufactured on a
    commercial scale, and there can be no assurance that such
    products can be manufactured at a cost or in a quantity to
    render such products commercially viable. Production and
    utilization of our products 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.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Pharmaceutical
    products are subject to intense regulatory approval
    processes.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The regulatory process for pharmaceuticals, which includes
    preclinical studies and clinical trials of each compound to
    establish its safety and efficacy, takes many years and requires
    the expenditure of substantial resources. 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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The U.S. Food and Drug Administration (the
    <B>&#147;FDA&#148;</B>) in the United States and similar
    regulatory authorities in other countries may deny approval of a
    new drug application if required regulatory criteria are not
    satisfied, or may require additional testing. 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. Non-compliance with applicable requirements can
    result in fines and other judicially imposed sanctions,
    including product withdrawals, product seizures, injunction
    actions and criminal prosecutions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to our own pharmaceuticals, we may supply active
    pharmaceutical ingredients and advanced pharmaceutical
    intermediates for use in our customers&#146; drug products. The
    final drug products in which the pharmaceutical ingredients and
    advanced pharmaceutical intermediates are used, however, are
    subject to regulation for safety and efficacy by the FDA and
    other jurisdictions, as the case may be. Such products must be
    approved by such agencies before they can be commercially
    marketed. The process of obtaining regulatory clearance for
    marketing is uncertain, costly and time consuming. We cannot
    predict how long the necessary regulatory approvals will take or
    whether our customers will ever obtain such approval for their
    products. To the extent that our customers do not obtain the
    necessary regulatory approvals for marketing new products, our
    product sales could be adversely affected.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    6
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    regulated industry, requiring significant documentation and
    validation of manufacturing processes and quality control
    assurance prior to approval of the facility to manufacture a
    specific drug, there can be considerable transition time between
    the initiation of a contract to manufacture a product and the
    actual initiation of manufacture of that product. Any lag time
    in the initiation of a contract to manufacture product and the
    actual initiation of manufacture could cause us to lose profits
    or incur liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The pharmaceutical regulatory regime in Europe and other
    countries is, by and large, generally similar to that of the
    United States. We could face similar risks in these other
    jurisdictions, as the risks described above.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    operations and products may be subject to other government
    manufacturing and testing regulations.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Securing regulatory approval for the marketing of therapeutics
    by the FDA in the United States 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 products may be for limited applications or may not be
    received at all.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The products we anticipate manufacturing will have to comply
    with the FDA&#146;s current Good Manufacturing Practices
    (<B>&#147;cGMP&#148;</B>) and other FDA, and local government
    guidelines and regulations, including other international
    regulatory requirements and guidelines. Additionally, certain of
    our customers may require the manufacturing facilities
    contracted by us to adhere to additional manufacturing
    standards, even if not required by the FDA. 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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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)&#160;restrict the
    release of the product; (ii)&#160;suspend manufacturing of the
    specific lot of the product; (iii)&#160;order a recall of the
    lot of the product; or (iv)&#160;order a seizure of the lot of
    the product.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are subject to regulation by governments in many
    jurisdictions and, if we do not comply with healthcare, drug,
    manufacturing and environmental regulations, among others, our
    existing and future operations may be curtailed, and we could be
    subject to liability.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to the regulatory approval process, we may be
    subject to regulations under local, provincial, state, federal
    and foreign law, including requirements regarding occupational
    health, safety, laboratory practices, environmental protection
    and hazardous substance control, and may be subject to other
    present and future local, provincial, state, federal and foreign
    regulations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    biotechnology industry is extremely competitive and we must
    successfully compete with larger companies with substantially
    greater resources.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Technological competition in the pharmaceutical industry is
    intense and we expect competition to increase. Other companies
    are conducting research on therapeutics involving the Ras
    pathway 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,
    technical and marketing 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 and 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 us. 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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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
</DIV>

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    <BR>
    7
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    developed or sold by us. Competitive products may render our
    products obsolete and uncompetitive prior to recovering
    research, development or commercialization expenses incurred
    with respect to any such products.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">We rely
    on patents and proprietary rights to protect our
    technology.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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 patents in the
    United States, Canada and Europe and have filed applications for
    patents in the United States and under the PCT, allowing us to
    file in other jurisdictions. See &#147;Narrative Description
    &#151; Patent and Patent Application Summary&#148; in the AIF
    and &#147;Recent Developments &#151; New Patents&#148; in this
    prospectus. Our success will depend, in part, on our ability to
    obtain, enforce and maintain patent protection for our
    technology in Canada, the United States and other countries. We
    cannot be assured that patents will issue 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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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 endeavours will result in the issuance
    of patents in Canada, the United States, or elsewhere, or if any
    patents already issued will provide significant proprietary
    protection or will be circumvented or invalidated. Since patent
    applications in the United States and Canada may be maintained
    in secrecy until at least 18&#160;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 was the first to file patent applications for such
    inventions. Loss of patent protection could lead to generic
    competition for these products, and others in the future, which
    would materially and adversely affect our financial prospects
    for these products.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Similarly, since patent applications filed before
    November&#160;29, 2000 in the United States 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&#146;s technology or product
    would be found to infringe such patents.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Accordingly, we may not be able to obtain and enforce effective
    patents to protect our proprietary rights from use by
    competitors, and the patents of other parties could require us
    to stop using or pay to use certain intellectual property, and
    as such, our competitive position and profitability could suffer
    as a result.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, we may be required to obtain licenses under patents
    or other proprietary rights of third parties. No assurance can
    be given that any licenses required under such patents or
    proprietary rights will be available on terms acceptable to us.
    If we do not obtain such licenses, we could encounter delays in
    introducing one or more of our products to the market while we
    attempt to design around such patents, or could find that the
    development, manufacture or sale of products requiring such
    licenses could be foreclosed. In addition, we could incur
    substantial costs in defending ourselves in suits brought
    against us on such patents or in suits in which our attempts to
    enforce our own patents against other parties.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    products may fail or cause harm, subjecting us to product
    liability claims, which are uninsured.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The sale and use of our products entail risk of product
    liability. We currently do not have any product liability
    insurance. 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 products. 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.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">We have
    limited manufacturing experience and intend to rely on third
    parties to commercially manufacture our products, if and when
    developed.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To date, we have relied upon a contract manufacturer to
    manufacture small quantities of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>.
    The manufacturer may encounter difficulties in scaling up
    production, including production yields, quality control and
    quality
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    8
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    assurance. Only a limited number of manufacturers can supply
    therapeutic viruses and failure by the manufacturer to deliver
    the required quantities of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    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
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    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.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">New
    products may not be accepted by the medical community or
    consumers.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our primary activity to date has been research and development
    and we have no experience in marketing or commercializing
    products. We will likely rely on third parties to market our
    products, assuming that they receive regulatory approvals. If we
    rely on third parties to market our products, the commercial
    success of such product may be outside of our control. 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 Health
    Canada, the FDA and other regulatory authorities. A failure to
    successfully market our product would have a material adverse
    effect on our revenue.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    technologies may become obsolete.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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 products obsolete, less competitive or less
    marketable. The process of developing our products is extremely
    complex and requires significant continuing development efforts
    and third party commitments. Our failure to develop new
    technologies and products and the obsolescence of existing
    technologies could adversely affect our business.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">We are
    highly dependent on third party relationships for research and
    clinical trials.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We rely upon third party relationships for assistance in the
    conduct of research efforts, pre-clinical development and
    clinical trials, and manufacturing. In addition, we expect to
    rely on third parties to seek regulatory approvals for and to
    market our product. Although we believe that our collaborative
    partners will have an economic motivation to commercialize our
    product included in any collaborative agreement, the amount and
    timing of resources diverted to these activities generally is
    expected to be controlled by the third party. Furthermore, if we
    cannot maintain these relationships, our business may suffer.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">We have
    no operating revenues and a history of losses.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To date, we have not generated operating revenues to offset our
    research and development costs and accordingly have not
    generated positive cash flow or made an operating profit. As of
    December&#160;31, 2005, we had an accumulated deficit of
    approximately $50.7&#160;million and as at September&#160;30,
    2006, we had an accumulated deficit of approximately
    $60.1&#160;million. We have incurred net losses of approximately
    $12.8&#160;million, $13.0&#160;million, and $8.5&#160;million
    for the years ended December&#160;31, 2005, 2004, and 2003,
    respectively. For the nine months ended September&#160;30, 2006,
    we incurred a net loss of approximately $9.4&#160;million. We
    anticipate that we will continue to incur significant losses
    during 2007 and in the foreseeable future. We will not reach
    profitability until after successful commercialization of one or
    more of our products. Even if one or more of our products are
    profitably commercialized, the initial losses incurred by us may
    never be recovered.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">We may
    need additional financing in the future to fund the research and
    development of our products and to meet our ongoing capital
    requirements.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As at December&#160;31, 2005, we had cash and cash equivalents
    (including short-term investments) of $40.4&#160;million and
    working capital of approximately $39.3&#160;million. As at
    September&#160;30, 2006, we had cash and cash equivalents
    (including
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    9
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    short-term investments) of $31.5&#160;million and working
    capital of approximately $30.4&#160;million. We believe our
    existing capital resources are adequate to fund our current
    plans for research and development activities well into 2008
    without the use of the proceeds from this offering. We
    anticipate that we may 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
    pre-clinical 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.
    There can be no assurance that additional funding will be
    available or, if available, that it will be available on
    commercially acceptable terms. 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.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The cost
    of director and officer liability insurance may increase
    substantially and may affect our ability to retain quality
    directors and officers.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We carry liability insurance on behalf of our directors and
    officers. Given a number of large director and officer liability
    insurance claims in the U.S. equity markets, director and
    officer liability insurance has become increasingly more
    expensive with increased restrictions. Consequently, there is no
    assurance that we will continue to be offered this insurance or
    be able to obtain adequate coverage. The inability to acquire
    the appropriate insurance coverage will limit our ability to
    attract and maintain directors and officers as required to
    conduct our business.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">We are
    dependent on our key employees and collaborators.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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. Competition for such
    personnel and relationships is intense. 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. The loss of key employees   and/or key
    collaborators may affect the speed and success of product
    development.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We presently carry key man insurance in the amounts of
    $1,500,000, $1,000,000 and $500,000 for Dr.&#160;Thompson,
    Dr.&#160;Coffey and Mr.&#160;Ball, respectively.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our share
    price may be highly volatile.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Market prices for securities of biotechnology companies
    generally are volatile. This increases the risk of securities
    litigation. Factors such as announcements (publicly made or at
    scientific conferences) of technological innovations, new
    commercial products, patents, the development of proprietary
    rights, results of clinical trials, regulatory actions,
    publications, quarterly financial results, our financial
    position, public concern over the safety of biotechnology,
    future sales of shares by us or our current shareholders and
    other factors could have a significant effect on the market
    price and volatility of the common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">We incur
    some of our expenses in foreign currencies and therefore we are
    exposed to foreign currency exchange rate
    fluctuations.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We incur some of our manufacturing, clinical and consulting
    expenses in foreign currencies (to date mainly in the U.S. and
    the UK). Over the past year the Canadian dollar has appreciated
    to these currencies thereby decreasing the Canadian dollar
    equivalent. However, if this trend reverses, our Canadian dollar
    equivalent costs will increase.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Also, as we expand to other foreign jurisdictions there may be
    an increase in our foreign exchange exposure.
</DIV>

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    <BR>
    10
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<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">We earn
    interest income on our excess cash reserves and are exposed to
    changes in interest rates.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We invest our excess cash reserves in investment vehicles that
    provide a rate of return with little risk to principal. As
    interest rates change the amount of interest income we earn will
    be directly impacted.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">We
    believe we are a passive foreign investment company, which may
    have a material affect on U.S. holders.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe we are a &#147;passive foreign investment
    company&#148; (<B>&#147;PFIC&#148;</B>), which may have a
    material affect on U.S.&#160;holders. United States income tax
    legislation contains rules governing PFICs, which can have
    significant tax effects on U.S. holders of foreign corporations.
    A U.S. holder who holds stock in a foreign corporation during
    any year in which such corporation qualifies as a PFIC is
    subject to United States federal income taxation under one of
    two alternative tax regimes at the election of each such U.S.
    holder. The U.S. federal income tax consequences to a U.S.
    holder of the acquisition, ownership, and disposition of common
    shares will depend on whether such U.S. holder makes an election
    to treat the Corporation as a &#147;qualified electing
    fund&#148; or &#147;QEF&#148; under Section&#160;1295 of the
    Code (a <B>&#147;QEF Election&#148;</B>) or a
    <FONT style="white-space: nowrap">mark-to-market</FONT>
    election under Section&#160;1296 of the Code (a
    <B><FONT style="white-space: nowrap">&#147;Mark-to-Market</FONT>
    Election&#148;</B>). You should consult your tax advisor as to
    the consequences of acquiring, owning or disposing of our common
    shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">There is
    no market for the common share purchase warrants offered under
    this prospectus.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There is no market through which the common share purchase
    warrants may be sold and purchasers may not be able to resell
    the common share purchase warrants purchased under this short
    form prospectus. This may affect the pricing of the common share
    purchase warrants in the secondary market, the transparency and
    availability of trading prices, the liquidity of such warrants,
    and the extent of issuer regulation.
</DIV>
<A name='109'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ONCOLYTICS
    BIOTECH INC.</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Oncolytics Biotech Inc. was incorporated pursuant to the
    provisions of the <I>Business Corporations Act</I> (Alberta) on
    April&#160;2, 1998 as 779738 Alberta Ltd. On April&#160;8, 1998,
    we amended our articles and changed our name to Oncolytics
    Biotech Inc. On July&#160;29, 1999, we further amended our
    articles by removing the private company restrictions and
    subdividing our issued and outstanding 2,222,222 common shares
    to create 6,750,000 common shares. Our head office and principal
    place of business is located at 210, 1167 Kensington Crescent
    N.W., Calgary, Alberta T2N 1X7. Our registered office is located
    at 4500 Bankers Hall East, 855-2nd Street S.W., Calgary, Alberta
    T2P 4K7.
</DIV>
<A name='110'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">OUR
    BUSINESS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We focus on the discovery and development of oncolytic viruses
    for the treatment of cancers that have not been successfully
    treated with conventional therapeutics. Recent scientific
    advances in oncology, virology, and molecular biology have
    created opportunities for new approaches to the treatment of
    cancer. The product we are presently developing may represent a
    novel treatment for Ras mediated cancers which can be used as an
    alternative to existing cytotoxic or cytostatic therapies, as an
    adjuvant therapy to conventional chemotherapy, radiation
    therapy, or surgical resections. It could also potentially be
    used to treat certain cellular proliferative disorders for which
    no current therapy exists.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our technologies are based primarily on discoveries in the
    Department of Microbiology and Infectious Diseases at the
    University of Calgary in the 1990&#146;s. Oncolytics was formed
    in 1998 to explore the natural oncolytic capability of the
    reovirus, a virus that preferentially replicates in cells with
    an activated Ras pathway.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The lead product being developed by us may represent a novel
    treatment for certain tumour types and some cellular
    proliferative disorders. Our lead product is a virus that is
    able to replicate specifically in, and hence kill, certain
    tumour cells both in tissue culture as well as in a number of
    animal models without damaging normal cells.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our potential product for human use,
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>,
    is developed from the reovirus. This virus has been demonstrated
    to replicate specifically in tumour cells bearing an activated
    Ras pathway. Activating mutations of Ras occur in approximately
    thirty per cent of all human tumours directly, but considering
    its central role in signal transduction, activation of the Ras
    pathway may play a role in approximately two-thirds of all
    tumours.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    11
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The functionality of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    is based upon the finding that tumours bearing an activated Ras
    pathway are deficient in their ability to activate the
    anti-viral response mediated by the host cellular protein,
    Protein Kinase R (<B>&#147;PKR&#148;</B>). Since PKR is
    responsible for preventing reovirus replication, tumour cells
    lacking the activity of PKR are susceptible to reovirus
    infections. As normal cells do not possess Ras activations,
    these cells are able to thwart reovirus infections by the
    activity of PKR. In a tumour cell with an activated Ras pathway,
    reovirus is able to freely replicate and hence kill the host
    tumour cell. The result of this replication is progeny viruses
    that are then free to infect surrounding cancer cells. This
    cycle of infection, replication and cell death is believed to be
    repeated until there are no longer any tumour cells carrying an
    activated Ras pathway available.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following schematic illustrates the molecular basis of how
    the reovirus kills cancer cells.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="o34618a1o3461801.gif" alt="(DIAGRAM)" >
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For both non-cancer cells, and cancer cells with an activated
    Ras pathway, virus binding, entry, and production of viral genes
    all proceed normally. In the case of normal cells however, the
    viral genes cause the activation of the anti-viral response that
    is mediated by the host cell&#146;s PKR, thus blocking the
    replication of the reovirus. In cells with an activated Ras
    pathway, the activation of PKR is prevented or reversed by an
    element of the Ras signal transduction pathway, thereby allowing
    the replication of the reovirus in these cancer cells. The end
    result of this replication is the death of the cancer cell. The
    action of the Ras pathway in allowing reovirus replication to
    ensue can be mimicked in non-cancerous cells by treating these
    cells with the chemical
    <FONT style="white-space: nowrap">2-aminopurine</FONT>
    <FONT style="white-space: nowrap">(2-AP)</FONT> which
    prevents the activation of PKR.
</DIV>
<A name='111'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">RECENT
    DEVELOPMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    Development</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We continue to develop our lead product
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    as a possible cancer therapy. Our goal each year is to advance
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    through the various steps and stages of development required for
    potential pharmaceutical products. In order to achieve this
    goal, we actively manage the development of our clinical trial
    program, our pre-clinical and collaborative programs, our
    manufacturing process,
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    supply, and our intellectual property.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Clinical
    Trial Program</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are directing a broad clinical trial program with the
    objective of developing
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    as a human cancer therapeutic. The clinical program includes
    human trials using
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    alone and in combination with radiation and chemotherapy, and
    delivered via local administration and/or intravenous
    administration.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Based on indications of activity in our clinical trial program
    to date, Oncolytics&#146; Phase II clinical trial program may
    include combination
    chemotherapy/REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    trials including colorectal, prostate, pancreatic and non-small
    cell lung
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    12
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    cancer, and combination radiation/
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    trials in a number of tumour types. In addition, the U.S.
    National Cancer Institute (<B>&#147;NCI&#148;</B>) has solicited
    proposals to conduct two trials using
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    as a monotherapy for melanoma and ovarian cancers.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Clinical
    Trial Chart</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following chart shows the states of clinical trials that
    have been completed or that are in progress.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="26%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="22%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="22%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="22%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <B>Trial Program and Cancer<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Delivery Method</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Indication</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Location</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Status</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Intravenous administration in
    combination with gemcitabine
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">pancreatic, lung, ovarian
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">United Kingdom
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Approval to commence
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Intravenous administration in
    combination with docetaxel
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">bladder, prostate, lung, upper
    gastro-intestinal
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">United Kingdom
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Approval to commence
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Intravenous administration in
    combination with paclitaxel and carboplatin
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">melanoma, lung, ovarian
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">United Kingdom
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Approval to commence
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Local therapy in combination with
    radiation
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Phase II various metastatic
    tumours, including head &#38; neck
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">United Kingdom
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">Ongoing
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Local therapy in combination with
    radiation
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Phase I various metastatic tumours
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">United Kingdom
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Phase Ia complete<BR>
    Phase Ib ongoing
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Infusion monotherapy
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Phase I/II recurrent malignant
    gliomas
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">United States
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">Ongoing
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Intravenous administration
    monotherapy
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Phase I various metastatic tumours
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">United Kingdom
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">Complete
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Intravenous administration
    monotherapy
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Phase I various metastatic tumours
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">United States
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">Complete
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Local monotherapy
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Phase I recurrent malignant gliomas
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">Canada
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">Complete
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Local monotherapy
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">T2 prostate cancer
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">Canada
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">Complete
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Local monotherapy
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Phase I trial for various
    subcutaneous tumours
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">Canada
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">Complete
    </FONT>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.K.
    Combination Gemcitabine and
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    Clinical Trial</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In January 2007, we received approval from the U.K. Medicines
    and Healthcare products Regulatory Agency (the
    <B>&#147;MHRA&#148;</B>) to begin a clinical trial using
    intravenous administration of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    in combination with gemcitabine
    (Gemzar<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>)
    in patients with advanced cancers including pancreatic, lung and
    ovarian. The trial has two components. The first is an
    open-label, dose-escalating, non-randomized study of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    given intravenously with gemcitabine every three weeks. A
    standard dosage of gemcitabine will be delivered with escalating
    dosages of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>.
    A maximum of three cohorts will be enrolled in the
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    dose escalation portion. The second component of the trial will
    immediately follow and will include the enrolment of a further
    12 patients at the maximum dosage of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    in combination with a standard dosage of gemcitabine. Eligible
    patients include those who have been diagnosed with advanced or
    metastatic solid tumours including pancreatic, lung and ovarian
    cancers that are refractory (have not
</DIV>

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    <BR>
    13
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    responded) to standard therapy or for which no curative standard
    therapy exists. The primary objective of the trial is to
    determine the MTD, DLT, recommended dose and dosing schedule and
    safety profile of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    when administered in combination with gemcitabine. Secondary
    objectives include the evaluation of immune response to the drug
    combination, the body&#146;s response to the drug combination
    compared to chemotherapy alone and any evidence of anti-tumour
    activity.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.K.
    Combination Docetaxel and
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    Clinical Trial</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In January 2007, we received approval from the MHRA for our
    Clinical Trial Application to begin a clinical trial using
    intravenous administration of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    in combination with docetaxel
    (Taxotere<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>)
    in patients with advanced cancers including bladder, prostate,
    lung and upper gastro-intestinal. The trial has two components.
    The first is an open-label, dose-escalating, non-randomized
    study of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    given intravenously with docetaxel every three weeks. A standard
    dosage of docetaxel will be delivered with escalating dosages of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>.
    A maximum of three cohorts will be enrolled in the
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    dose escalation portion. The second component of the trial will
    immediately follow and will include the enrolment of a further
    12 patients at the maximum dosage of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    in combination with a standard dosage of docetaxel. Eligible
    patients include those who have been diagnosed with advanced or
    metastatic solid tumours such as bladder, lung, prostate or
    upper gastro-intestinal cancers that are refractory (have not
    responded) to standard therapy or for which no curative standard
    therapy exists. The primary objective of the trial is to
    determine the Maximum Tolerated Dose (<B>&#147;MTD&#148;</B>),
    Dose-Limiting Toxicity (<B>&#147;DLT&#148;</B>), recommended
    dose and dosing schedule and safety profile of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    when administered in combination with docetaxel. Secondary
    objectives include the evaluation of immune response to the drug
    combination, the body&#146;s response to the drug combination
    compared to chemotherapy alone and any evidence of anti-tumour
    activity.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.K.
    Combination Paclitaxel and Carboplatin with
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    Clinical Trial</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In December 2006, the MHRA approved a clinical trial using
    intravenous administration of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    in combination with paclitaxel and carboplatin in patients with
    advanced cancers including melanoma, lung and ovarian. The trial
    has two components. The first is an open-label, dose-escalating,
    non-randomized study of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    given intravenously with paclitaxel and carboplatin every three
    weeks. Standard dosages of paclitaxel and carboplatin will be
    delivered with escalating dosages of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>.
    A maximum of three cohorts will be enrolled in the
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    dose escalation portion. The second component of the trial will
    immediately follow and will include the enrolment of a further
    12 patients at the maximum dosage of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    in combination with standard dosages of paclitaxel and
    carboplatin. Eligible patients include those who have been
    diagnosed with advanced or metastatic solid tumours including
    melanoma, lung and ovarian that are refractory (have not
    responded) to standard therapy or for which no curative standard
    therapy exists. The primary objective of the trial is to
    determine the MTD, DLT, recommended dose and dosing schedule and
    safety profile of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    when administered in combination with paclitaxel and
    carboplatin. Secondary objectives include the evaluation of
    immune response to the drug combination, the body&#146;s
    response to the drug combination compared to chemotherapy alone
    and any evidence of anti-tumour activity.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.K.
    Phase II Combination
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>/radiation
    Clinical Trial</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In December 2006, we commenced enrolment in our Phase II U.K.
    clinical trial to evaluate the anti-tumour effects of
    intratumoural administration of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    in combination with low-dose radiation in patients with advanced
    cancers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The trial is an open-label, single-arm, multi-centre Phase II
    study of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    delivered via intratumoural injection to patients during
    treatment with low-dose radiotherapy. Up to 40 evaluable
    patients, including approximately 20 patients with head and neck
    and esophageal cancers, and approximately 20 patients with other
    advanced cancers, will be treated with two intratumoural doses
    of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    at
    1x10<SUP style="font-size: 85%; vertical-align: text-top">10</SUP>
    TCID<SUB style="font-size: 85%; vertical-align: text-bottom">50</SUB>
    with a constant localized radiation dose of 20&#160;Gy in five
    consecutive daily fractions. Eligible patients include those who
    have been diagnosed with advanced or metastatic cancers
    including head, neck and esophageal tumours that are refractory
    (have not responded) to standard therapy or for which no
    curative standard therapy exists.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The primary objective of the trial is to assess the anti-tumour
    activity of the combination of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    and low dose radiotherapy in treated and untreated lesions.
    Secondary objectives include the evaluation of viral
    replication, immune response to the virus and to determine the
    safety and tolerability of intratumoural administration of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    in patients with advanced cancers who are receiving radiation
    treatment.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    14
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<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.K.
    Phase Ia/Ib Combination
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>/Radiation
    Clinical Trial</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During the third quarter of 2006, we commenced patient enrolment
    in our Phase Ib U.K. clinical trial investigating
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    in combination with radiation therapy as a treatment for
    patients with advanced cancers. The Phase Ib trial will treat
    patients with a range of two to six intratumoural doses of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    at
    1x10<SUP style="font-size: 85%; vertical-align: text-top">10</SUP>
    TCID<SUB style="font-size: 85%; vertical-align: text-bottom">50</SUB>
    with a constant radiation dose of 36 Gy in 12 fractions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The primary objective of our Phase Ib trial is to determine the
    maximum tolerated dose, dose limiting toxicity, and safety
    profile of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    when administered intratumourally to patients receiving
    radiation treatment. A secondary objective is to examine any
    evidence of anti-tumour activity. Eligible patients include
    those who have been diagnosed with advanced or metastatic solid
    tumours that are refractory (have not responded) to standard
    therapy or for which no curative standard therapy exists. An
    additional group of patients is planned to be treated at the
    maximum dose regimen reached in the Ib trial.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Patient enrolment in our Ia combination
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>/radiation
    trial was completed in June 2006. The Phase Ia trial tested two
    intratumoural treatments of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    at dosages of
    1x10<SUP style="font-size: 85%; vertical-align: text-top">8</SUP>,
    1x10<SUP style="font-size: 85%; vertical-align: text-top">9</SUP>,
    or
    1x10<SUP style="font-size: 85%; vertical-align: text-top">10</SUP>
    TCID<SUB style="font-size: 85%; vertical-align: text-bottom">50</SUB>
    with a constant localized radiation dose of 20 Gy given in five
    fractions. A maximum tolerated dose was not reached and the
    combination treatment appears to have been well tolerated by the
    patients.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Interim results of the Phase Ia trial were presented at the
    American Association for Cancer Research Annual Meeting in
    Washington, D.C. in April 2006. Preliminary analysis has
    demonstrated evidence of both local and systemic response.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.S.
    Phase I/II Recurrent Malignant Glioma Clinical
    Trial</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During the third quarter of 2006, we began patient enrolment in
    our clinical trial to investigate the use of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    for patients with recurrent malignant gliomas. This clinical
    trial is an open-label dose escalation Phase&#160;I/II trial in
    which a single dose of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    is administered by infusion to patients with recurrent malignant
    gliomas that are refractory to standard therapy. The
    administration involves the stereotactically-guided placement of
    a needle into the tumour, through which
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    will be administered or infused into the tumour mass and
    surrounding tissue using a pump.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The primary objective of the study is to determine the maximum
    tolerated dose, dose limiting toxicity and safety profile of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>.
    Secondary objectives include the evaluation of viral
    replication, immune response to the virus and any evidence of
    anti-tumour activity.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.K.
    Phase I Systemic Administration Clinical Trial</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Further results of our U.K. Phase I Systemic Administration
    Clinical Trial were presented at the
    18<SUP style="font-size: 85%; vertical-align: text-top">th</SUP>
    EORTC-NCI-AACR Symposium on Molecular Targets and Cancer
    Therapeutics in November 2006 in Prague, Czech Republic. A
    poster entitled &#147;A Phase I Study of Wild-Type Reovirus,
    Which Selectively Replicates in Cells Expressing Activated Ras,
    Administered Intravenously to Patients with Advanced
    Cancer&#148; was presented by Dr.&#160;Timothy Yap of The Royal
    Marsden Foundation Trust and the Institute of Cancer Research.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Results indicated that
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    can be delivered systemically to various tumour types and cause
    virus-mediated tumour responses. A total of 33 patients were
    treated in the trial to a maximum daily dose of
    1x10<SUP style="font-size: 85%; vertical-align: text-top">11</SUP>
    TCID<SUB style="font-size: 85%; vertical-align: text-bottom">50</SUB>.
    Of 32&#160;patients assessed, anti-tumour activity was noted in
    seven patients. Two patients with colorectal cancer had tumour
    stabilization (one for three months, the other classified as
    stable disease for six months) and had CEA tumour marker
    reduction of 27% and 60% respectively. One patient with
    metastatic prostate cancer had stable disease for four months,
    had a 50% decrease in PSA, and had extensive product-induced
    necrosis with associated intratumoural viral replication in
    metastatic lesions in the lymph nodes. One patient with
    metastatic bladder cancer had stable disease for four months and
    had a minor tumour response in a metastatic lesion in a lymph
    node. A patient with pancreatic cancer and a patient with NSCL
    cancer had stable disease for four months. A patient with
    endometrial cancer had stable disease for five months.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.S.
    Phase I Systemic Administration Clinical Trial</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During the third quarter of 2006, we completed patient enrolment
    in our Phase I U.S. clinical trial investigating the systemic
    delivery of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    to treat patients with advanced cancers. A total of 18 patients
    were treated in the Phase I
</DIV>

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    <BR>
    15
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    trial with
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    at escalating dosages of
    1x10<SUP style="font-size: 85%; vertical-align: text-top">8</SUP>,
    3x10<SUP style="font-size: 85%; vertical-align: text-top">8</SUP>,
    1x10<SUP style="font-size: 85%; vertical-align: text-top">9</SUP>,
    3x10<SUP style="font-size: 85%; vertical-align: text-top">9</SUP>,
    1x10<SUP style="font-size: 85%; vertical-align: text-top">10</SUP>
    or
    3x10<SUP style="font-size: 85%; vertical-align: text-top">10</SUP>
    TCID<SUB style="font-size: 85%; vertical-align: text-bottom">50</SUB>.
    A maximum tolerated dose was not reached and the treatment
    appears to have been well tolerated by the patients.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The clinical trial is an open-label, dose-escalation Phase I
    study in which a single dose of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    is administered intravenously to patients diagnosed with
    selected advanced or metastatic solid tumours that are
    refractory (have not responded) to standard therapy or for which
    no curative standard therapy exists. The primary objective of
    the study is to determine the maximum tolerated dose, dose
    limiting toxicity and safety profile of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>.
    Secondary objectives include the evaluation of viral
    replication, immune response to the virus and any evidence of
    anti-tumour activity.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Pre-Clinical
    Trial and Collaborative Program</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We perform pre-clinical studies and engage in collaborations to
    help support our clinical trial programs and expand our
    intellectual property base. We continue with studies examining
    the interaction between the immune system and the reovirus, the
    use of the reovirus as a co-therapy with chemotherapeutics and
    radiation, the use of new RAS active viruses as potential
    therapeutics, and to consider other uses for the reovirus as a
    therapeutic.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In January 2007, Dr.&#160;Sheila Fraser of St.&#160;James&#146;s
    University Hospital in Leeds, U.K. presented an abstract
    entitled &#147;Reovirus as a Potentially Immunogenic as well as
    Cytotoxic Therapy for Metastatic Colorectal Cancer&#148; at the
    Society of Academic&#160;&#38; Research Surgery Conference in
    Cambridge, U.K. The investigators tested reovirus <I>in
    vitro</I> against recently resected colorectal cancer liver
    metastases. The results showed that a significant proportion of
    tumour cell cultures showed susceptibility to death following
    reovirus infection, and also demonstrated effective replication
    of reovirus within these cells. In addition, dendritic cells
    that prime the immune system to fight cancer cells were
    activated by exposure to the reovirus. The investigators
    concluded that the data supports the development of reovirus as
    a novel therapy for colorectal cancer, with the potential to
    direct the immune system to target cancer cells.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In November 2006, Dr.&#160;Shizuko Sei of SAIC-Frederick Inc.,
    prime contractor the National Cancer Institute at Frederick
    (<B>&#147;NCI-F&#148;</B>) presented a poster at the
    18<SUP style="font-size: 85%; vertical-align: text-top">th</SUP>
    EORTC-NCI-AACR symposium on Molecular Targets and Cancer
    Therapeutics in Prague, Czech Republic. The poster was entitled
    &#147;Synergistic Antitumor Activity of Oncolytic Reovirus and
    Chemotherapeutic Agents against Non-small Cell Lung Cancer
    (NSCLC)&#148;. The research focused on work conducted by the NCI
    with reovirus in combination with a number of common
    chemotherapeutic agents. In general, the combination of reovirus
    with cisplatin, gemcitabine, mitomycin or vinblastine was
    synergistic against NSCLC cell lines sensitive to anti-cancer
    drugs. The combination of reovirus and paclitaxel was uniformly
    synergistic in all six cell lines examined, including in those
    with high-level resistance to paclitaxel or reovirus. The data
    suggest that the combination of reovirus and paclitaxel may help
    in promoting cell-death signaling, resulting in a more efficient
    and synergistic anti-cancer effect against these cell lines than
    using each agent on its own.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On September&#160;9, 2006 a poster, prepared by one of our
    collaborators, entitled &#147;Reovirus Activates Dendritic Cells
    and Promotes Innate Anti-Tumour Immunity&#148; was presented at
    the 1st Joint Meeting of European National Societies of
    Immunology. The poster highlighted the researchers&#146; use of
    isolated human cells to examine whether the use of the reovirus
    as a direct tumour killing agent might also activate the innate
    immune system to play a role in the killing of tumour cells. The
    innate immune system is the broad, short-term and non-specific
    first-line immune response to an infection. The research showed
    that the reovirus can infect and activate immature human
    dendritic cells. The reovirus-activated dendritic cells
    triggered anti-tumour cytotoxicity when co-cultured with two
    other types of immune cells, natural killer cells and autologous
    T-cells. The researchers concluded that the reovirus may support
    early innate anti-tumour immunity as well as inducing direct
    tumour cell death.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Other
    Clinical Trial Activity</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We continue to develop our Phase II clinical trial program which
    includes the assessment of different cancer indications and
    potential drug combinations, the interviewing and selection of
    investigators and clinical trial sites, and the contracting of
    Contract Research Organizations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Manufacturing
    and Process Development</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have completed the production runs that should provide us
    with sufficient product to complete our U.K. Phase II
    combination
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>/radiation
    clinical trial and our existing Phase I clinical trials. At the
    same time, our process
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    16
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    development activity helped improve virus yields from our
    manufacturing process. We completed the transfer of these
    improvements to our cGMP manufacturer at the beginning of the
    third quarter of 2006 and began production runs under this
    improved process. These production runs are expected to provide
    sufficient
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    to expand our Phase II clinical trial program. Our process
    development activity has now shifted focus to the examination of
    the potential scale up of our manufacturing process.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">New
    Patents</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth certain patent issuances in
    select jurisdictions since the filing of our AIF:
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="33%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="16%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="20%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="10%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="14%">&nbsp;</TD>	<!-- colindex=05 type=maindata -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Title</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Ownership</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Inventors</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Status of Patent</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Patent Number U.S. 6,994,858
    Reovirus Clearance of Ras-Mediated Neoplastic Cells from Mixed
    Cellular Compositions
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Oncolytics Biotech Inc.
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Dr. Don Morris<BR>
    Dr. Bradley G. Thompson<BR>
    Dr. Matthew C. Coffey
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">Filing date:<BR>
    Issued:
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">May 3, 2001<BR>
    February 7, 2006
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Patent Number U.S. 7,014,847
    Methods for Preventing Reovirus Recognition for the Treatment of
    Cellular Proliferative Disorders
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Oncolytics Biotech Inc.
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Dr. Bradley G. Thompson<BR>
    Dr. Matthew C. Coffey
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">Filing date:<BR>
    Issued:
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">March 28, 2003<BR>
    March 21, 2006
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Patent Number U.S. 7,049,127 Method
    of Producing Infectious Reovirus
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Oncolytics Biotech Inc.
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Dr. Bradley G. Thompson<BR>
    Dr. Matthew C. Coffey
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">Filing date:<BR>
    Issued:
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">December 11, 2003<BR>
    May 23, 2006
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Patent Number U.S. 7,052,832
    Methods for the Treatment of Cellular Proliferative Disorders
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Oncolytics Biotech Inc.
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Dr. Matthew C. Coffey
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">Filing date:<BR>
    Issued:
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">November 6, 2001<BR>
    May 30, 2006
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Patent Number U.S. 7,163,678
    Reovirus for the Treatment of Ral-Mediated Cellular
    Proliferative Disorders
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Oncolytics Biotech Inc.
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Dr. Patrick W.K. Lee<BR>
    Dr. Kara L. Norman
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">Filing date:<BR>
    Issued:
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">November 6, 2003<BR>
    January 16, 2007
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Canadian Patent Number 2,415,750
    Methods for Preventing Reovirus Recognition for the Treatment of
    Cellular Proliferative Disorders
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Oncolytics Biotech Inc.
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Dr. Bradley G. Thompson<BR>
    Dr. Matthew C. Coffey
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">Filing date:<BR>
    Issued:
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">July 20, 2001<BR>
    March 28, 2006
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">European Patent Number: 1,498,129
    Use of Adenoviruses Mutated in the VA Genes for Cancer Treatment
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Oncolytics Biotech Inc.
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Dr. Ramon Alemany<BR>
    Dr. Manel M. Cascallo
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">Filing date:<BR>
    Issued:
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">March 25, 2003<BR>
    November 16, 2005
    </FONT>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">New
    Directors and Officer</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Ed Levy and Ger J. van Amersfoort were appointed to our board of
    directors on May&#160;17, 2006 and June&#160;15, 2006,
    respectively. On January&#160;23, 2007, Mary Ann Dillahunty was
    appointed as our Vice President, Intellectual Property.
</DIV>
<A name='112'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">USE OF
    PROCEEDS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Assuming that the Over-allotment Option is not exercised, the
    estimated net proceeds to be received by us from the sale of the
    units will be $10,640,000&#160;after deducting the
    underwriter&#146;s fee of $960,000&#160;and the estimated
    expenses of the offering of $400,000. If the Over-allotment
    Option is exercised in full, the estimated net proceeds to be
    received by us from the sale of the units will be
    $12,296,000&#160;after deducting the underwriter&#146;s fee of
    $1,104,000&#160;and the estimated expenses of the offering of
    $400,000. The net proceeds for this offering will be used by us
    for our clinical trial program, our manufacturing activities in
    support of the program and general corporate purposes.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    17
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->
<A name='113'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CAPITALIZATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On September&#160;30, 2006, we had 36,386,748 common shares
    issued and outstanding. Since September&#160;30, 2006, we have
    issued 134,000 common shares pursuant to the exercise of stock
    options. As at February&#160;6, 2007, we have 36,520,748 common
    shares issued and outstanding. If all of our warrants and
    options outstanding as of February&#160;6, 2007 were exercised,
    we would have 42,830,698 common shares issued and outstanding.
    Following this offering, we will have 40,520,748&#160;common
    shares issued and outstanding (48,830,698&#160;common shares on
    a fully-diluted basis). Following this offering and assuming the
    Over-allotment Option is exercised in full, we will have
    41,120,748&#160;common shares issued and outstanding
    (49,730,698&#160;common shares on a fully-diluted basis).
</DIV>
<A name='114'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DETAILS
    OF THE OFFERING</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This offering consists of 4,000,000&#160;units at a price of
    $3.00&#160;per unit. Each unit consists of one common share and
    one-half of one common share purchase warrant. Each whole common
    share purchase warrant will entitle the holder to purchase one
    of our common shares upon payment of $3.50&#160;at any time
    until 5:00&#160;p.m. (Calgary time) on the date that is
    36&#160;months following the closing of this offering. The
    common shares and the common share purchase warrants comprising
    the units will separate immediately on the closing of the
    offering.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Common
    Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are authorized to issue an unlimited number of common shares.
    Each common share entitles the holder to one vote per share held
    at meetings of shareholders, to receive such dividends as
    declared by us and to receive our remaining property and assets
    upon dissolution or winding up. Our common shares are not
    subject to any future call or assessment and there are no
    pre-emptive, conversion or redemption rights attached to such
    shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Warrants</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The common share purchase warrants will be governed by an
    indenture (the <B>&#147;Warrant Indenture&#148;</B>) to be
    entered into between us and Computershare Trust&#160;Company of
    Canada, as agent for the holders of the common share purchase
    warrants. The following descriptions are subject to the detailed
    provisions of the Warrant Indenture.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each whole warrant will entitle the holder to purchase one of
    our common shares at a price of $3.50, subject to adjustment as
    summarized below. All rights under any common share purchase
    warrants that for any reason have not been exercised by
    5:00&#160;p.m. (Calgary time) on the date that is 36&#160;months
    following the closing of this offering will terminate and the
    certificate representing such common share purchase warrant will
    be void.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>There is no market through which the common share purchase
    warrants may be sold and purchasers may not be able to resell
    the common share purchase warrants purchased under this
    prospectus. This may affect the pricing of the common share
    purchase warrants in the secondary market, the transparency and
    availability of trading prices, the liquidity of such common
    share purchase warrants, and the extent of issuer regulation.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Common share purchase warrants will be evidenced by fully
    registered certificates. A register of holders will be
    maintained at the principal office of Computershare
    Trust&#160;Company of Canada in Calgary, Alberta. One or more
    certificates may be exchanged for one or more certificates of
    different denominations evidencing in the aggregate the same
    number of common share purchase warrants as the certificate or
    certificates being exchanged.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Warrant Indenture will provide that the share ratio and
    exercise price of the common share purchase warrants will be
    subject to adjustment in the event of a subdivision or
    consolidation of our common shares. The Warrant Indenture will
    also provide that if there is (a)&#160;any reclassification or
    change of our common shares into other shares, (b)&#160;any
    consolidation, amalgamation, arrangement or other business
    combination of Oncolytics resulting in any reclassification or
    change of our common shares into other shares, or (c)&#160;any
    sale, lease, exchange or transfer of our assets as an entity or
    substantially as an entirety to another entity, then each holder
    of a common share purchase warrant which is thereafter exercised
    shall receive, in lieu of common shares, the kind and number or
    amount of other securities or property which such holder would
    have been entitled to receive as a result of such event if such
    holder had exercised the common share purchase warrants prior to
    the event.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will also covenant in the Warrant Indenture that, during the
    period in which the common share purchase warrants are
    exercisable, we will give public notice of our intention to fix
    a record date for the issuance of rights, options or
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    18
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    warrants (other than the common share purchase warrants
    comprising part of the units) to all or substantially all of the
    holders of our outstanding common shares at least 14&#160;days
    prior to the record date of such event.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent that the holder of a common share purchase warrant
    would otherwise be entitled to purchase a fraction of a common
    share, Oncolytics, in lieu of issuing a fractional common share,
    shall pay to the holder thereof within five business days of
    exercise an amount in Canadian dollars equal to the difference
    between the &#147;Current Market Price&#148; of the common
    shares on the exercise date multiplied by the fractional
    interest, provided that Oncolytics shall make only one payment
    for each beneficial holder exercising such common share purchase
    warrants and shall not be required to make any payment that is
    less than $10.00. Holders of common share purchase warrants do
    not have any voting or pre-emptive rights or any other rights as
    shareholders of Oncolytics.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is a closing condition of this offering that we file and
    clear a short form base shelf prospectus with the Alberta
    Securities Commission and concurrently, pursuant to the
    multi-jurisdictional disclosure system, file and bring effective
    a registration statement on
    <FONT style="white-space: nowrap">Form&#160;F-10</FONT>
    with the SEC. Further, it is a closing condition of the closing
    of this offering that we file with the Alberta Securities
    Commission a prospectus supplement and with the SEC a
    post-effective amendment to the registration statement
    registering the offering of our common shares issuable from time
    to time on the exercise of the common share purchase warrants.
    We have agreed to use reasonable efforts to maintain the base
    shelf prospectus and the registration statement, or another
    registration statement under the United States Securities Act of
    1933, as amended (the <B>&#147;Securities Act&#148;</B>),
    relating to the common shares underlying the common share
    purchase warrants, effective until the earlier of the expiration
    date of the common share purchase warrants and the date on which
    no common share purchase warrants remain outstanding. No U.S.
    Person or person holding common share purchase warrants for the
    benefit of or for the account of a U.S. Person will be permitted
    to exercise common share purchase warrants during any period of
    time prior to the expiration date of the common share purchase
    warrants during which no registration statement under the
    Securities Act is effective. If no registration statement under
    the Securities Act is effective, we will notify the holders of
    the common share purchase warrants in the United States, in
    accordance with the Warrant Indenture.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Reference is made to the Warrant Indenture for the full text of
    the attributes of the common share purchase warrants.
</DIV>
<A name='115'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PLAN OF
    DISTRIBUTION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under an underwriting agreement dated February&#160;6, 2007 (the
    <B>&#147;Underwriting Agreement&#148;</B>) between us and the
    underwriter, we have agreed to sell and the underwriter has
    agreed to purchase on February&#160;22, 2007 or on such other
    date as we and the underwriter may mutually agree, but in any
    event not later than March&#160;22, 2007 (subject to the
    termination rights described below), all but not less than all
    of the 4,000,000 units offered hereby at a price of
    $3.00&#160;per unit for total consideration of
    $12,000,000&#160;payable in cash to us against delivery of
    certificates representing the common shares and common share
    purchase warrants comprising the units. The obligations of the
    underwriter under the Underwriting Agreement may be terminated
    at its discretion upon the occurrence of certain stated events.
    The underwriter is, however, obligated to take up and pay for
    all of the units if any of the units are purchased under the
    Underwriting Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The offering price was determined by negotiation between us and
    the underwriter. We have agreed to pay to the underwriter a fee
    equal to 8% of the gross proceeds of the offering, equal to
    $0.24&#160;per unit in consideration of services rendered by it
    in connection with this offering. All fees payable to the
    underwriter will be paid on account of services rendered in
    connection with the offering and will be paid from the proceeds
    from the offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have granted the underwriter the Over-allotment Option,
    exercisable, in whole or in part, for a period of up to
    30&#160;days after closing of the offering, to purchase up to an
    additional 600,000 units, each unit consisting of one of our
    common shares and one-half of one common share purchase warrant,
    at the offering price, to cover over-allotments, if any, and for
    market stabilization purposes. The grant of the Over-allotment
    Option and the issuance of the units upon exercise of the
    Over-allotment Option are qualified for distribution under this
    prospectus. If the Over-allotment Option is exercised in full,
    the total offering, the underwriter&#146;s fee and the net
    proceeds to the Corporation (before payment of the expenses of
    the offering) will be $13,800,000, $1,104,000&#160;and
    $12,696,000, respectively.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This offering is being made concurrently in Canada and the
    United States pursuant to the multi-jurisdictional disclosure
    system implemented by the securities regulatory authorities in
    Canada and the United States. The units will be offered in
    Canada and the United States through the underwriter either
    directly or through its U.S. or Canadian broker-dealer affiliate
    or agent registered in each jurisdiction, as applicable. Subject
    to applicable law, the underwriter may offer the units outside
    of Canada and the United States.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    19
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have agreed to indemnify the underwriter and its directors,
    officers, employees and agents against certain liabilities,
    including liabilities under the Securities Act and Canadian
    provincial securities legislation, in connection with the
    offering or to contribute to payments that the underwriter may
    be required to make in respect thereof.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have agreed not to issue or announce the issuance of any
    equity securities or any securities convertible into,
    exchangeable for or exercisable to acquire equity securities
    without the prior consent of the underwriter until a date which
    is 90&#160;days after the closing date of this offering, other
    than pursuant to: (i)&#160;presently outstanding rights, or
    agreements, including options, warrants and other convertible
    securities and any rights which have been granted, issued or
    will be issued under the offering, subject to any necessary
    regulatory approval; (ii)&#160;presently outstanding options
    granted to officers, directors, employees or consultants of the
    Corporation or any subsidiary thereof pursuant to the
    Oncolytics&#146; stock option plan (the <B>&#147;Option
    Plan&#148;</B>); (iii)&#160;the Option Plan; or
    (iv)&#160;arm&#146;s length corporate alliances, partnerships,
    mergers or acquisitions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to a rule of the Ontario Securities Commission, the
    underwriter may not, throughout the period of distribution under
    this prospectus, bid for or purchase our common shares. The
    foregoing restriction is subject to exceptions, on the condition
    that the bid or purchase is not engaged in for the purpose of
    creating actual or apparent active trading in, or raising the
    price of, our common shares. These exceptions include a bid or
    purchase permitted under the Universal Market Integrity Rules
    for Canadian Marketplaces of Market Regulation&#160;Services
    Inc. relating to market stabilization and passive market-making
    activities and a bid or purchase made for and on behalf of a
    customer where the order was not solicited during the period of
    distribution. Under the first-mentioned exception, in connection
    with the offering, the underwriter may over-allot or effect
    transactions which stabilize or maintain the market price for
    the common shares at levels other than those which might
    otherwise prevail in the open market. Those transactions, if
    commenced, may be discontinued at any time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common shares are listed on the TSX under the trading symbol
    &#147;ONC&#148; and on the NASDAQ under the trading symbol
    &#147;ONCY&#148;. On February&#160;2, 2007, the last trading day
    prior to the announcement of this offering, the closing price of
    our common shares on the TSX was $3.25 and on NASDAQ was
    U.S.$2.74 and on February&#160;5, 2007, the closing price of our
    common shares on the TSX was $3.25&#160;and on NASDAQ was
    U.S.$2.74. We have applied to list the (i)&#160;common shares
    comprising part of the units; (ii)&#160;common shares issuable
    upon exercise of the common share purchase warrants comprising
    part of the units; and (iii)&#160;the common shares to be issued
    on the exercise of the Over-allotment Option on the TSX and
    NASDAQ. Listing will be subject to the Corporation fulfilling
    the applicable listing requirements of the TSX and&#160;NASDAQ.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">United
    States Securities Law Compliance</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is a closing condition of the closing of this offering that
    we file and clear a short form base shelf prospectus with the
    Alberta Securities Commission and concurrently, pursuant to the
    multi-jurisdictional disclosure system, file and bring effective
    a registration statement on
    <FONT style="white-space: nowrap">Form&#160;F-10</FONT>
    with the SEC. Further, it is a closing condition of the closing
    of this offering that we file with the Alberta Securities
    Commission a prospectus supplement and with the SEC a
    post-effective amendment to the registration statement
    registering the offering of our common shares issuable from time
    to time on the exercise of the Warrants. No U.S. Person or
    person holding Warrants on behalf or for the account of a U.S.
    Person may exercise the Warrants during any period of time when
    a registration statement covering such common shares is not
    effective. See &#147;Details of the Offering&#160;&#151;
    Warrants&#148;.
</DIV>
<A name='116'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CANADIAN
    FEDERAL INCOME TAX CONSIDERATIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the opinion of Counsel, the following is a general summary of
    the principal Canadian federal income tax considerations
    generally applicable to an investment in units pursuant to this
    offering. This summary is based upon the current provisions of
    the Tax Act, the regulations thereunder (the
    <B>&#147;Regulations&#148;</B>), all specific proposals to amend
    the Tax Act and the Regulations publicly announced by the
    Government of Canada prior to the date hereof (the
    <B>&#147;Proposed Amendments&#148;</B>) and Counsels&#146;
    understanding of the prevailing administrative views of the
    Canada Revenue Agency (the <B>&#147;CRA&#148;</B>). This summary
    is not exhaustive of all possible Canadian federal income tax
    considerations and except for the Proposed Amendments does not
    otherwise take into account any changes in law, whether by
    legislative, governmental or judicial action, nor does it take
    into account or consider any provincial, territorial or foreign
    income tax considerations. There can be no assurance that the
    Proposed Amendments will be enacted in their current form or at
    all.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    20
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This summary is applicable only to investors who acquire such
    units pursuant to this offering and who for the purposes of the
    Tax Act and at all relevant times will hold the common shares
    and common share purchase warrants acquired under this offering
    as capital property, deal at arm&#146;s length, and are not
    affiliated with us and do not use or hold, and are not deemed to
    use or hold, their common shares and common share purchase
    warrants in, or in the course of, carrying on a business in
    Canada. Common shares and common share purchase warrants will
    generally constitute capital property to an investor provided
    that the investor does not hold such securities in the course of
    carrying on a business and has not acquired such securities in a
    transaction or transactions considered to be an adventure or
    concern in the nature of trade. This summary does not apply to
    investors who are &#147;financial institutions&#148; or
    &#147;specified financial institutions&#148; for the purposes of
    the Tax Act. Such investors should consult their own tax
    advisors for advice.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This summary is of a general nature only and is not intended to
    be, nor should it be construed to be, legal or tax advice to any
    particular investor. Accordingly, all prospective investors are
    urged to consult their own tax advisors with respect to their
    particular circumstances.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Residents
    of Canada</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This portion of the summary is applicable to an investor who,
    for the purposes of the Tax Act and at all relevant times, is
    resident or is deemed to be resident in Canada. Certain
    investors who are resident in Canada for the purposes of the Tax
    Act whose common shares might not otherwise qualify as capital
    property may be entitled to make an irrevocable election in
    accordance with subsection 39(4) of the Tax Act to have such
    common shares treated as capital property.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Allocation
    of Purchase Price</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For the purposes of the Tax Act, the purchase price of each unit
    offered hereby must be allocated, on a reasonable basis, between
    the common share and the one-half of a common share purchase
    warrant acquired on the acquisition of the unit in order to
    determine the respective cost of the common share and the
    fractional common share purchase warrant to the investor.
    Oncolytics believes that it is reasonable to allocate a nominal
    value of the purchase price of each unit to the fractional
    common share purchase warrant. Purchasers will be required to
    allocate, on a reasonable basis, the purchase price of a unit
    between the common share and the one-half of a common share
    purchase warrant. However, such allocation is not binding upon
    the CRA.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The portion of the purchase price of each unit allocated to the
    common share and to the one-half common share purchase warrant,
    respectively, will become an investor&#146;s acquisition cost of
    the common share and the one-half common share purchase warrant
    for income tax purposes. These amounts must generally be
    averaged with the adjusted cost base of all other common shares
    and common share purchase warrants, respectively, held by the
    investor as capital property to determine the adjusted cost base
    of all such common shares and common share purchase warrants to
    the investor.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Exercise
    of Common Share Purchase Warrants</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An investor will not realize a gain or a loss upon the exercise
    of a common share purchase warrant. For the purposes of the Tax
    Act, when a common share purchase warrant is exercised, the
    investor&#146;s adjusted cost base of the common share acquired
    thereby will (subject to averaging) be the aggregate of the
    investor&#146;s adjusted cost base of the common share purchase
    warrant and the exercise price paid on the exercise of the
    common share purchase warrant.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Expiry of
    Common Share Purchase Warrants</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The expiry of an unexercised common share purchase warrant will
    generally result in a capital loss to the investor equal to the
    adjusted cost base of the common share purchase warrant
    immediately prior to the expiry. The tax treatment of capital
    losses is described in greater detail below under
    &#147;Treatment of Capital Gains and Capital Losses&#148;.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Disposition
    of Common Shares or Common Share Purchase Warrants</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general, a disposition, or a deemed disposition, of a common
    share, other than to us, or a common share purchase warrant,
    other than on the exercise thereof, will give rise to a capital
    gain (or a capital loss) in the taxation year of the disposition
    equal to the amount by which the proceeds of disposition of the
    common share or common share purchase warrant, as the case may
    be, net of any reasonable costs of disposition, exceed (or are
    less than) the adjusted cost base of the common share or common
    share purchase warrant, as the case may be, to the holder
    thereof. The tax treatment of capital gains and capital losses
    are described in greater detail below under &#147;Treatment of
    Capital Gains and Capital Losses&#148;.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    21
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Treatment
    of Capital Gains and Capital Losses</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the year of disposition an investor will be required to
    include one-half of the amount of any capital gain (a
    &#147;taxable capital gain&#148;) in income, and will be
    required to deduct one-half of the amount of any capital loss
    (an &#147;allowable capital loss&#148;) against taxable capital
    gains realized by the investor. Allowable capital losses not
    deducted in the taxation year in which they are realized may be
    carried back and deducted in any of the three preceding taxation
    years or carried forward and deducted in any subsequent taxation
    year against taxable capital gains realized in such years, to
    the extent and under the circumstances specified in the Tax Act.
    A capital gain realized by an investor who is an individual
    (including certain trusts) may give rise to alternative minimum
    tax. A &#147;Canadian-controlled private corporation&#148; (as
    defined in the Tax Act) may be liable to an additional
    6<FONT style="vertical-align: top; font-size: 70&#37;">2</FONT>/<FONT style="font-size: 70&#37;">3</FONT>%
    refundable tax under the Tax Act on certain investment income,
    including taxable capital gains.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The amount of any capital loss realized on the disposition or
    deemed disposition of a common share by an investor that is a
    corporation may be reduced by the amount of dividends received
    or deemed to have been received by it on the common share to the
    extent and in the circumstances prescribed by the Tax Act.
    Similar rules may apply where an investor that is a corporation
    is a member of a partnership or is beneficiary of a trust that
    owns common shares and where common shares are owned by a
    partnership or trust of which a partnership or trust is a
    partner or beneficiary. Investors to whom these rules may be
    relevant should consult their own tax advisors.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Dividends</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Dividends (including deemed dividends) received on common shares
    will be included in computing the investor&#146;s income. On
    June&#160;29, 2006, the Government of Canada released draft
    legislation which would provide for an enhanced dividend tax
    credit for eligible dividends (as discussed in such draft
    legislation) paid by us on common shares acquired by individuals
    pursuant to this offering. In the case of an individual
    investor, such dividends will generally be subject to the
    gross-up and dividend tax credit rules normally applicable to
    dividends received from taxable Canadian corporations. In the
    case of a corporation, such dividends will generally be
    deductible in computing the corporation&#146;s taxable income.
    An investor that is a &#147;private corporation&#148;, as
    defined in the Tax Act, or any other corporation resident in
    Canada and controlled by or for the benefit of an individual
    (other than a trust) or a related group of individuals (other
    than trusts) will generally be liable to pay a refundable tax at
    the rate of
    33<FONT style="vertical-align: top; font-size: 70&#37;">1</FONT>/<FONT style="font-size: 70&#37;">3</FONT>%
    under Part&#160;IV of the Tax Act on dividends received (or
    deemed to be received) on common shares to the extent such
    dividends are deductible in computing its taxable income.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Non-Residents
    of Canada</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This portion of the summary is applicable to an investor who,
    for the purposes of the Tax Act and at all relevant times, is
    not, and has never been, resident in Canada and is not, and has
    never been, deemed to be resident in Canada, does not use or
    hold, and is not deemed to use or hold, common shares in, or in
    the course of, carrying on business in Canada, and is not an
    insurer who carries on an insurance business in Canada and
    elsewhere (a <B>&#147;Non-Resident Holder&#148;</B>).
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Allocation
    of the Purchase Price</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A Non-Resident Holder will be required to allocate the purchase
    price of each unit between the common share and the one-half of
    a common share purchase warrant in the same manner described
    above under <I>&#147;Residents of Canada &#151; Allocation of
    Purchase Price&#148;</I>.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Disposition
    of Common Shares and Common Share Purchase Warrants</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A Non-Resident Holder will be subject to tax under the Tax Act
    in respect of a disposition of common shares only to the extent
    such common shares constitute &#147;taxable Canadian
    property&#148; for purposes of the Tax Act and the Non-Resident
    Holder is not afforded relief from such tax under an applicable
    income tax treaty.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The common shares will normally not be taxable Canadian property
    at a particular time provided that: (i)&#160;the common shares
    are listed on a prescribed stock exchange at the particular time
    (which includes the TSX); (ii)&#160;the Non-Resident Holder,
    persons with whom the Non-Resident Holder does not deal at
    arm&#146;s length (within the meaning of the Tax Act), or the
    Non-Resident Holder together with such persons, did not own 25%
    or more of the issued shares of any class or series of
    Oncolytics at any time during the
    <FONT style="white-space: nowrap">60-month</FONT>
    period preceding the particular time; and (iii)&#160;such common
    shares are not otherwise deemed under the Tax Act to be taxable
    Canadian property at the particular time.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    22
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A Non-Resident Holder will not be subject to tax under the Tax
    Act on the exercise of common share purchase warrants. A
    disposition of common share purchase warrants (other than on the
    exercise thereof) will be subject to tax under the Tax Act only
    to the extent that such common share purchase warrants
    constitute &#147;taxable Canadian property&#148; for purposes of
    the Tax Act and the Non-Resident Holder is not afforded relief
    under an applicable income tax treaty.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The common share purchase warrants will normally not be taxable
    Canadian property at a particular time provided that:
    (i)&#160;the common shares are listed on a prescribed stock
    exchange at the particular time (which includes the TSX<B>)</B>;
    (ii)&#160;the common share purchase warrants held by the
    Non-Resident Holder, together with any other options or rights
    held by the Non-Resident Holder to acquire our shares , were not
    exerciseable into 25% or more of the issued shares of any class
    or series of Oncolytics at any time during the
    <FONT style="white-space: nowrap">60-month</FONT>
    period preceding the particular time; and (iii)&#160;the
    Non-Resident Holder, persons with whom the Non-Resident Holder
    does not deal at arm&#146;s length (within the meaning of the
    Tax Act), or the Non-Resident Holder together with such persons,
    did not own 25% or more of the issued shares of any class or
    series of Oncolytics at any time during the
    <FONT style="white-space: nowrap">60-month</FONT>
    period preceding the particular time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A Non-Resident Holder who is subject to tax under the Tax Act on
    a disposition of common shares or common share purchase warrants
    will generally be required to compute such gains in the same
    manner described above under <I>&#147;Residents of
    Canada&#160;&#151; Disposition of Common Shares or Common Share
    Purchase Warrants&#148;</I>.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Dividends</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Dividends paid or credited, or which are deemed to be paid or
    credited, on the common shares will be subject to a Canadian
    non-resident withholding tax of 25%, subject to reduction of
    such rate under an applicable income tax treaty. For example,
    Non-Resident Holders who are residents of the United States for
    the purposes of the <I>Canada-United States Tax Convention,
    1980</I> will generally have such rate of withholding reduced to
    15% (or 5% if such Non-Resident Holder owns at least 10% of the
    voting stock of Oncolytics).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Non-Resident Holders should consult their tax advisors with
    respect to the tax implications of acquiring shares pursuant to
    this offering in their jurisdiction of residence and the
    application of any bilateral income tax treaty between Canada
    and their jurisdiction of residence.</B>
</DIV>
<A name='117'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">U.S.
    FEDERAL INCOME TAX CONSIDERATIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is a summary of certain material anticipated U.S.
    federal income tax consequences to a U.S. Holder (as defined
    below) arising from and relating to the acquisition of units
    purchased pursuant to this U.S. Preliminary Placement
    Memorandum, the exercise, disposition, and lapse of warrants
    acquired through such units, and the acquisition, ownership, and
    disposition of common shares acquired through such units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This summary is for general information purposes only and does
    not purport to be a complete analysis or listing of all
    potential U.S. federal income tax consequences that may apply to
    a U.S. Holder as a result of the acquisition of units purchased
    pursuant to this U.S. Preliminary Placement Memorandum, the
    exercise, disposition, and lapse of warrants, or the
    acquisition, ownership, and disposition of common shares. In
    addition, this summary does not take into account the individual
    facts and circumstances of any particular U.S. Holder that may
    affect the U.S. federal income tax consequences to such U.S.
    Holder. Accordingly, this summary is not intended to be, and
    should not be construed as, legal or U.S. federal income tax
    advice with respect to any U.S. Holder. Each U.S. Holder should
    consult its own financial advisor, legal counsel, or accountant
    regarding the U.S. federal income, U.S. state and local, and
    foreign tax consequences of the acquisition of units purchased
    pursuant to this U.S. Preliminary Placement Memorandum, the
    exercise, disposition, and lapse of warrants, and the
    acquisition, ownership, and disposition of common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    No legal opinion from U.S. legal counsel or ruling from the
    Internal Revenue Service (the <B>&#147;IRS&#148;</B>) has been
    requested, or will be obtained, regarding the U.S. federal
    income tax consequences of the acquisition of units purchased
    pursuant to this U.S. Preliminary Placement Memorandum, the
    exercise, disposition, and lapse of warrants, or the
    acquisition, ownership, and disposition of common shares. This
    summary is not binding on the IRS, and the IRS is not precluded
    from taking a position that is different from, and contrary to,
    the positions taken in this summary. In addition, because the
    authorities on which this summary is based are subject to
    various interpretations, the IRS and the U.S. courts could
    disagree with one or more of the positions taken in this summary.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    23
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Notice Pursuant To IRS Circular 230:</B>&#160;&#160;Anything
    contained in this summary concerning any U.S. federal tax issue
    is not intended or written to be used, and it cannot be used by
    a U.S. Holder, for the purpose of avoiding federal tax penalties
    under the Internal Revenue Code. This summary was written to
    support the promotion or marketing of the transactions or
    matters addressed by this U.S. Preliminary Placement Memorandum.
    Each U.S. Holder should seek U.S. federal tax advice, based on
    such U.S. Holder&#146;s particular circumstances, from an
    independent tax advisor.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Scope of
    this Summary</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Authorities</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This summary is based on the Internal Revenue Code of 1986, as
    amended (the <B>&#147;Code&#148;</B>), Treasury Regulations
    (whether final, temporary, or proposed), published rulings of
    the IRS, published administrative positions of the IRS, the
    Convention Between Canada and the United States of America with
    Respect to Taxes on Income and on Capital, signed
    September&#160;26, 1980, as amended (the <B>&#147;Canada-U.S.
    Tax Convention&#148;</B>), and U.S. court decisions that are
    applicable and, in each case, as in effect and available, as of
    the date of this U.S. Preliminary Placement Memorandum. Any of
    the authorities on which this summary is based could be changed
    in a material and adverse manner at any time, and any such
    change could be applied on a retroactive basis. This summary
    does not discuss the potential effects, whether adverse or
    beneficial, of any proposed legislation that, if enacted, could
    be applied on a retroactive basis.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.S.
    Holders</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of this summary, a &#147;U.S. Holder&#148; is a
    beneficial owner of units, warrants, or common shares acquired
    through such units, as the case may be, that, for U.S. federal
    income tax purposes, is (a)&#160;an individual who is a citizen
    or resident of the U.S., (b)&#160;a corporation, or any other
    entity classified as a corporation for U.S. federal income tax
    purposes, that is created or organized in or under the laws of
    the U.S., any state in the U.S., or the District of Columbia,
    (c)&#160;an estate if the income of such estate is subject to
    U.S. federal income tax regardless of the source of such income,
    or (d)&#160;a trust if (i)&#160;such trust has validly elected
    to be treated as a U.S. person for U.S. federal income tax
    purposes or (ii)&#160;a U.S. court is able to exercise primary
    supervision over the administration of such trust and one or
    more U.S. persons have the authority to control all substantial
    decisions of such trust.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Non-U.S.
    Holders</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of this summary, a &#147;non-U.S. Holder&#148; is a
    beneficial owner of units, warrants, or common shares other than
    a U.S. Holder. This summary does not address the U.S. federal
    income tax consequences to non-U.S. Holders of the acquisition
    of units purchased pursuant to this U.S. Preliminary Placement
    Memorandum, the exercise, disposition, and lapse of warrants, or
    the acquisition, ownership, and disposition of common shares.
    Accordingly, a non-U.S. Holder should consult its own financial
    advisor, legal counsel, or accountant regarding the U.S. federal
    income, U.S. state and local, and foreign tax consequences
    (including the potential application of and operation of any
    income tax treaties) of the acquisition of units purchased
    pursuant to this U.S. Preliminary Placement Memorandum, the
    exercise, disposition, and lapse of warrants, and the
    acquisition, ownership, and disposition of common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.S.
    Holders Subject to Special U.S. Federal Income Tax
    Rules&#160;Not Addressed</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This summary does not address the U.S. federal income tax
    consequences applicable to U.S. Holders that are subject to
    special provisions under the Code, including the following U.S.
    Holders: (a)&#160;U.S. Holders that are tax-exempt
    organizations, qualified retirement plans, individual retirement
    accounts, or other tax-deferred accounts; (b)&#160;U.S. Holders
    that are financial institutions, insurance companies, real
    estate investment trusts, or regulated investment companies;
    (c)&#160;U.S. Holders that are dealers in securities or
    currencies or U.S. Holders that are traders in securities that
    elect to apply a
    <FONT style="white-space: nowrap">mark-to-market</FONT>
    accounting method; (d)&#160;U.S. Holders that have a
    &#147;functional currency&#148; other than the U.S. dollar;
    (e)&#160;U.S.&#160;Holders that are liable for the alternative
    minimum tax under the Code; (f)&#160;U.S. Holders that own
    units, warrants, or common shares as part of a straddle, hedging
    transaction, conversion transaction, constructive sale, or other
    arrangement involving more than one position; (g)&#160;U.S.
    Holders that acquired units, warrants, or common shares in
    connection with the exercise of employee stock options or
    otherwise as compensation for services; (h)&#160;U.S. Holders
    that hold units, warrants, or common shares other than as a
    capital asset within the meaning of Section&#160;1221 of the
    Code; or (i)&#160;U.S. Holders that own (directly, indirectly,
    or constructively) 10% or more of the total combined voting
    power of the outstanding shares of the Corporation.
    U.S.&#160;Holders that are subject to special provisions under
    the Code, including
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    24
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    U.S.&#160;Holders described immediately above, should consult
    their own financial advisor, legal counsel or accountant
    regarding the U.S. federal income tax consequences of the
    acquisition of units purchased pursuant to this U.S. Preliminary
    Placement Memorandum, the exercise, disposition, and lapse of
    warrants, and the acquisition, ownership, and disposition of
    common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If an entity that is classified as a partnership for U.S.
    federal income tax purposes holds units, warrants, or common
    shares, the U.S. federal income tax consequences to such
    partnership and the partners of such partnership generally will
    depend on the activities of the partnership and the status of
    such partners. Partners of entities that are classified as
    partnerships for U.S. federal income tax purposes should consult
    their own financial advisor, legal counsel or accountant
    regarding the U.S. federal income tax consequences of the
    acquisition of units purchased pursuant to this U.S. Preliminary
    Placement Memorandum, the exercise, disposition, and lapse of
    warrants, and the acquisition, ownership, and disposition of
    common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Tax
    Consequences Other than U.S. Federal Income Tax Consequences Not
    Addressed</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This summary does not address the U.S. state and local, U.S.
    federal estate and gift, or foreign tax consequences to
    U.S.&#160;Holders of the acquisition of units purchased pursuant
    to this U.S. Preliminary Placement Memorandum, the exercise,
    disposition, and lapse of warrants, or the acquisition,
    ownership, and disposition of common shares. Each
    U.S.&#160;Holder should consult its own financial advisor, legal
    counsel, or accountant regarding the U.S.&#160;state and
    local,&#160;U.S.&#160;federal estate and gift, and foreign tax
    consequences of the acquisition of units purchased pursuant to
    this U.S.&#160;Preliminary Placement Memorandum, the exercise,
    disposition, and lapse of warrants, and the acquisition,
    ownership, and disposition of common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.S.
    Federal Income Tax Consequences of the Acquisition of
    Units</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For U.S. federal income tax purposes, the acquisition of a unit
    by a U.S. Holder will be treated as the acquisition of an
    &#147;investment unit&#148; consisting of two components: one
    common share and one-half of one warrant. The purchase price for
    each unit will be allocated between these two components in
    proportion to their relative fair market values on the date that
    the unit is purchased by the U.S. Holder. This allocation of the
    purchase price for each unit will establish a U.S. Holder&#146;s
    initial tax basis in the common share and the one-half of one
    warrant that comprise each unit for U.S. federal income tax
    purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For this purpose, the Corporation will allocate U.S.$2.09 of the
    purchase price for each unit to the common share and U.S.$0.45
    of the purchase price for each unit to the one-half of one
    warrant. The IRS will not be bound by the Corporation&#146;s
    allocation of the purchase price for each unit between the
    common share and the one-half of one warrant, and accordingly,
    the IRS may allocate the purchase price for each unit between
    the common share and the one-half of one warrant in a manner
    that is different than the allocation set forth above. Each U.S.
    Holder should consult its own financial advisor, legal counsel,
    or accountant regarding the allocation of the purchase price for
    each unit between the common share and the one-half of one
    warrant.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.S.
    Federal Income Tax Consequences of the Exercise and Disposition
    of Warrants</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Exercise
    of Warrants</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder should not recognize gain or loss on the exercise
    of a warrant and related receipt of a common share (except if
    cash is received in lieu of the issuance of a fractional common
    share). A U.S. Holder&#146;s initial tax basis in the common
    share received on the exercise of a warrant should be equal to
    the sum of (a)&#160;such U.S. Holder&#146;s tax basis in such
    warrant plus (b)&#160;the exercise price paid by such U.S.
    Holder on the exercise of such warrant. A U.S. Holder&#146;s
    holding period for the common share received on the exercise of
    a warrant should begin on the date that such warrant is
    exercised by such U.S. Holder.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Disposition
    of Warrants</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder will recognize gain or loss on the sale or other
    taxable disposition of a warrant in an amount equal to the
    difference, if any, between (a)&#160;the amount of cash plus the
    fair market value of any property received and (b)&#160;such
    U.S.&#160;Holder&#146;s tax basis in the warrant sold or
    otherwise disposed of. Subject to the &#147;passive foreign
    investment company&#148; rules discussed below, any such gain or
    loss generally will be a capital gain or loss (provided that the
    common share to be issued on the exercise of such warrant would
    have been a capital asset within the meaning of
    Section&#160;1221 of the Code if acquired by the U.S. Holder),
    which will be long-term capital gain or loss if the warrant is
    held for more than one year.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    25
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Expiration
    of Warrants Without Exercise</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon the lapse or expiration of a warrant, a U.S.&#160;Holder
    will recognize a loss in an amount equal to such
    U.S.&#160;Holder&#146;s tax basis in the warrant. Any such loss
    generally will be a capital loss (provided that the common share
    to be issued on the exercise of such warrant would have been a
    capital asset if acquired by the U.S. Holder). Any such capital
    loss will be short-term capital loss or long-term capital loss,
    depending on whether the warrants are held for more than one
    year. Deductions for capital losses are subject to complex
    limitations under the Code.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Certain
    Adjustments to the Warrants</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under Section&#160;305 of the Code, an adjustment to the number
    of common shares that will be issued on the exercise of the
    warrants, or an adjustment to the exercise price of the
    warrants, may be treated as a constructive distribution to a
    U.S.&#160;Holder of the warrants if, and to the extent that,
    such adjustment has the effect of increasing such
    U.S.&#160;Holder&#146;s proportionate interest in the
    &#147;earnings and profits&#148; or assets of the Corporation,
    depending on the circumstances of such adjustment (for example,
    if such adjustment is to compensate for a distribution of cash
    or other property to shareholders of the Corporation). (See more
    detailed discussion of the rules applicable to distributions
    made by the Corporation at &#147;Distributions on Common
    Shares&#148; below).
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.S.
    Federal Income Tax Consequences of the Acquisition, Ownership,
    and Disposition of Common Shares</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Distributions
    on Common Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">General
    Taxation of Distributions</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subject to the &#147;passive foreign investment company&#148;
    rules discussed below, a U.S. Holder that receives a
    distribution, including a constructive distribution, with
    respect to the common shares will be required to include the
    amount of such distribution in gross income as a dividend
    (without reduction for any Canadian income tax withheld from
    such distribution) to the extent of the current or accumulated
    &#147;earnings and profits&#148; of the Corporation. To the
    extent that a distribution exceeds the current and accumulated
    &#147;earnings and profits&#148; of the Corporation, such
    distribution will be treated (a)&#160;first, as a tax-free
    return of capital to the extent of a U.S. Holder&#146;s tax
    basis in the common shares and, (b)&#160;thereafter, as gain
    from the sale or exchange of such common shares. (See more
    detailed discussion at &#147;Disposition of Common Shares&#148;
    below). Dividends paid on the common shares generally will not
    be eligible for the &#147;dividends received deduction.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Reduced
    Tax Rates for Certain Dividends</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For taxable years beginning before January&#160;1, 2011, a
    dividend paid by the Corporation generally will be taxed at the
    preferential tax rates applicable to long-term capital gains if
    (a)&#160;the Corporation is a &#147;qualified foreign
    corporation&#148; (as defined below), (b)&#160;the U.S. Holder
    receiving such dividend is an individual, estate, or trust, and
    (c)&#160;such dividend is paid on common shares that have been
    held by such U.S. Holder for at least 61&#160;days during the
    <FONT style="white-space: nowrap">121-day</FONT>
    period beginning 60&#160;days before the &#147;ex-dividend
    date.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Corporation generally will be a &#147;qualified foreign
    corporation&#148; under Section&#160;1(h)(11) of the Code (a
    <B>&#147;QFC&#148;</B>) if (a)&#160;the Corporation is eligible
    for the benefits of the Canada-U.S. Tax Convention, or
    (b)&#160;the common shares are readily tradable on an
    established securities market in the U.S. However, even if the
    Corporation satisfies one or more of such requirements, the
    Corporation will not be treated as a QFC if the Corporation is a
    &#147;passive foreign investment company&#148; (as defined
    below) for the taxable year during which the Corporation pays a
    dividend or for the preceding taxable year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As discussed below, the Corporation anticipates that it may
    qualify as a &#147;passive foreign investment company&#148; for
    the taxable year ending December&#160;31, 2007 and subsequent
    taxable years, depending on the assets and income of the
    Corporation over the course of the taxable year ending
    December&#160;31, 2007. (See more detailed discussion at
    &#147;Additional Rules that May Apply to U.S.
    Holders&#160;&#151; Passive Foreign Investment Corporation&#148;
    below). Accordingly, there can be no assurances that the
    Corporation will be a QFC for the current or any future taxable
    year or that the Corporation will be able to certify that it is
    a QFC in accordance with the certification procedures issued by
    the Treasury and the IRS.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Corporation is not a QFC, a dividend paid by the
    Corporation to a U.S. Holder, including a U.S. Holder that is an
    individual, estate, or trust, generally will be taxed at
    ordinary income tax rates (and not at the preferential tax rates
    applicable to long-term capital gains). The dividend rules are
    complex, and each U.S. Holder should consult its own financial
    advisor, legal counsel, or accountant regarding the dividend
    rules.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    26
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Distributions
    Paid in Foreign Currency</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The amount of a distribution paid to a U.S. Holder in foreign
    currency generally will be equal to the U.S. dollar value of
    such distribution based on the exchange rate applicable on the
    date of receipt. A U.S. Holder that does not convert foreign
    currency received as a distribution into U.S. dollars on the
    date of receipt generally will have a tax basis in such foreign
    currency equal to the U.S. dollar value of such foreign currency
    on the date of receipt. Such a U.S. Holder generally will
    recognize ordinary income or loss on the subsequent sale or
    other taxable disposition of such foreign currency (including an
    exchange for U.S. dollars).
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Disposition
    of Common Shares</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder will recognize gain or loss on the sale or other
    taxable disposition of common shares in an amount equal to the
    difference, if any, between (a)&#160;the amount of cash plus the
    fair market value of any property received and (b)&#160;such
    U.S. Holder&#146;s tax basis in the common shares sold or
    otherwise disposed of. Subject to the &#147;passive foreign
    investment company&#148; rules discussed below, any such gain or
    loss generally will be capital gain or loss, which will be
    long-term capital gain or loss if the common shares are held for
    more than one year. Gain or loss recognized by a
    U.S.&#160;Holder on the sale or other taxable disposition of
    common shares generally will be treated as &#147;U.S.
    source&#148; for purposes of applying the U.S. foreign tax
    credit rules. (See more detailed discussion at &#147;Foreign Tax
    Credit&#148; below).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Preferential tax rates apply to long-term capital gains of a
    U.S. Holder that is an individual, estate, or trust. There are
    currently no preferential tax rates for long-term capital gains
    of a U.S. Holder that is a corporation. Deductions for capital
    losses are subject to significant limitations under the Code.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Foreign
    Tax Credit</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder that pays (whether directly or through
    withholding) Canadian income tax with respect to dividends
    received on the common shares generally will be entitled, at the
    election of such U.S. Holder, to receive either a deduction or a
    credit for such Canadian income tax paid. Generally, a credit
    will reduce a U.S. Holder&#146;s U.S. federal income tax
    liability on a
    <FONT style="white-space: nowrap">dollar-for-dollar</FONT>
    basis, whereas a deduction will reduce a U.S. Holder&#146;s
    income subject to U.S. federal income tax. This election is made
    on a
    <FONT style="white-space: nowrap">year-by-year</FONT>
    basis and applies to all foreign taxes paid (whether directly or
    through withholding) by a U.S. Holder during a taxable year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Complex limitations apply to the foreign tax credit, including
    the general limitation that the credit cannot exceed the
    proportionate share of a U.S. Holder&#146;s U.S. federal income
    tax liability that such U.S. Holder&#146;s &#147;foreign
    source&#148; taxable income bears to such U.S. Holder&#146;s
    worldwide taxable income. In applying this limitation, a U.S.
    Holder&#146;s various items of income and deduction must be
    classified, under complex rules, as either &#147;foreign
    source&#148; or &#147;U.S. source.&#148; In addition, this
    limitation is calculated separately with respect to specific
    categories of income. Dividends received on the common shares
    generally will constitute &#147;foreign source&#148; income and
    generally will be categorized as &#147;passive income.&#148; The
    foreign tax credit rules are complex, and each U.S. Holder
    should consult its own financial advisor, legal counsel, or
    accountant regarding the foreign tax credit rules.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Information
    Reporting; Backup Withholding Tax</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Payments made within the U.S., or by a U.S. payor or U.S.
    middleman, of dividends on, or proceeds arising from the sale or
    other taxable disposition of, common shares generally will be
    subject to information reporting and backup withholding tax, at
    the rate of 28%, if a U.S. Holder (a)&#160;fails to furnish such
    U.S. Holder&#146;s correct U.S. taxpayer identification number
    (generally on
    <FONT style="white-space: nowrap">Form&#160;W-9),</FONT>
    (b)&#160;furnishes an incorrect U.S. taxpayer identification
    number, (c)&#160;is notified by the IRS that such U.S. Holder
    has previously failed to properly report items subject to backup
    withholding tax, or (d)&#160;fails to certify, under penalty of
    perjury, that such U.S. Holder has furnished its correct
    U.S.&#160;taxpayer identification number and that the IRS has
    not notified such U.S.&#160;Holder that it is subject to backup
    withholding tax. However, U.S.&#160;Holders that are
    corporations generally are excluded from these information
    reporting and backup withholding tax rules. Any amounts withheld
    under the U.S. backup withholding tax rules will be allowed as a
    credit against a U.S.&#160;Holder&#146;s U.S.&#160;federal
    income tax liability, if any, or will be refunded, if such U.S.
    Holder furnishes required information to the IRS. Each U.S.
    Holder should consult its own financial advisor, legal counsel,
    or accountant regarding the information reporting and backup
    withholding tax rules.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    27
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Information
    Filing Required by Certain U.S. Holders</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder may be required to file Form&#160;926 with the IRS
    if (a)&#160;immediately after acquiring the units pursuant to
    this U.S. Preliminary Placement Memorandum, such U.S. Holder
    owns, directly or indirectly, at least 10% of the total voting
    power or the total value of the outstanding shares of the
    Corporation or (b)&#160;the purchase price of the units, when
    aggregated with all other transfers of cash by such U.S. Holder
    (or any person related to such U.S. Holder) to the Corporation
    within the preceding 12&#160;month period, exceeds U.S.$100,000.
    A U.S. Holder that fails to properly and timely file
    Form&#160;926 with the IRS generally will be subject to a
    penalty equal to 10% of the purchase price for the units
    (subject to a maximum penalty of U.S.$100,000, unless the
    failure to file is due to intentional disregard). Each U.S.
    Holder should consult its own financial advisor, legal counsel,
    or accountant regarding the information reporting requirements
    that may apply with respect to the acquisition of the units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Additional
    Rules that May Apply to U.S. Holders</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Corporation is a &#147;passive foreign investment
    company&#148; (as defined below), the preceding sections of this
    summary may not describe the U.S. federal income tax
    consequences to U.S. Holders of the acquisition, ownership, and
    disposition of common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Passive
    Foreign Investment Corporation</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Corporation generally will be a &#147;passive foreign
    investment company&#148; under Section&#160;1297 of the Code (a
    <B>&#147;PFIC&#148;</B>) if, for a taxable year, (a)&#160;75% or
    more of the gross income of the Corporation for such taxable
    year is passive income or (b)&#160;on average, 50% or more of
    the assets held by the Corporation either produce passive income
    or are held for the production of passive income, based on the
    fair market value of such assets (or on the adjusted tax basis
    of such assets, if the Corporation is not publicly traded and
    either is a &#147;controlled foreign corporation&#148; or makes
    an election). &#147;Passive income&#148; includes, for example,
    dividends, interest, certain rents and royalties, certain gains
    from the sale of stock and securities, and certain gains from
    commodities transactions. Active business gains arising from the
    sale of commodities generally are excluded from passive income
    if substantially all of a foreign corporation&#146;s commodities
    are (a)&#160;stock in trade of such foreign corporation or other
    property of a kind which would properly be included in inventory
    of such foreign corporation, or property held by such foreign
    corporation primarily for sale to customers in the ordinary
    course of business, (b)&#160;property used in the trade or
    business of such foreign corporation that would be subject to
    the allowance for depreciation under Section&#160;167 of the
    Code, or (c)&#160;supplies of a type regularly used or consumed
    by such foreign corporation in the ordinary course of its trade
    or business.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of the PFIC income test and asset test described
    above, if the Corporation owns, directly or indirectly, 25% or
    more of the total value of the outstanding shares of another
    corporation, the Corporation will be treated as if it
    (a)&#160;held a proportionate share of the assets of such other
    corporation and (b)&#160;received directly a proportionate share
    of the income of such other corporation. In addition, for
    purposes of the PFIC income test and asset test described above,
    &#147;passive income&#148; does not include any interest,
    dividends, rents, or royalties that are received or accrued by
    the Corporation from a &#147;related person&#148; (as defined in
    Section&#160;954(d)(3) of the Code), to the extent such items
    are properly allocable to the income of such related person that
    is not passive income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, if the Corporation is a PFIC and owns shares of
    another foreign corporation that also is a PFIC, under certain
    indirect ownership rules, a disposition of the shares of such
    other foreign corporation or a distribution received from such
    other foreign corporation generally will be treated as an
    indirect disposition by a U.S. Holder or an indirect
    distribution received by a U.S. Holder, subject to the rules of
    Section&#160;1291 of the Code discussed below. To the extent
    that gain recognized on the actual disposition by a U.S. Holder
    of the common shares or income recognized by a U.S. Holder on an
    actual distribution received on the common shares was previously
    subject to U.S. federal income tax under these indirect
    ownership rules, such amount generally should not be subject to
    U.S. federal income tax.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Corporation anticipates that it may qualify as a PFIC for
    the taxable year ending December&#160;31, 2007 and for
    subsequent taxable years. Whether the Corporation will, in fact,
    qualify as a PFIC for the taxable year ending December&#160;31,
    2007 will depend on the assets and income of the Corporation
    over the course of the taxable year ending December&#160;31,
    2007 and, as a result, cannot be predicted with certainty as of
    the date of this U.S. Preliminary Private Placement Memorandum.
    Each U.S. Holder should consult its own financial advisor, legal
    counsel, or accountant regarding whether the Corporation will
    qualify as a PFIC for the taxable year ending December&#160;31,
    2007 and in subsequent taxable years.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    28
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Default
    PFIC Rules&#160;Under Section&#160;1291 of the
    Code</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Corporation is a PFIC, the U.S. federal income tax
    consequences to a U.S. Holder of the acquisition, ownership, and
    disposition of common shares will depend on whether such U.S.
    Holder makes an election to treat the Corporation as a
    &#147;qualified electing fund&#148; or &#147;QEF&#148; under
    Section&#160;1295 of the Code (a <B>&#147;QEF
    Election&#148;</B>) or a
    <FONT style="white-space: nowrap">mark-to-market</FONT>
    election under Section&#160;1296 of the Code (a
    <B><FONT style="white-space: nowrap">&#147;Mark-to-Market</FONT>
    Election&#148;</B>). A U.S. Holder that does not make either a
    QEF Election or a
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election will be referred to in this summary as a
    &#147;Non-Electing U.S.&#160;Holder.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A Non-Electing U.S. Holder will be subject to the rules of
    Section&#160;1291 of the Code with respect to (a)&#160;any gain
    recognized on the sale or other taxable disposition of common
    shares and (b)&#160;any excess distribution paid on the common
    shares. A distribution generally will be an &#147;excess
    distribution&#148; to the extent that such distribution
    (together with all other distributions received in the current
    taxable year) exceeds 125% of the average distributions received
    during the three preceding taxable years (or during a U.S.
    Holder&#146;s holding period for the common shares, if shorter).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under Section&#160;1291 of the Code, any gain recognized on the
    sale or other taxable disposition of common shares, and any
    excess distribution paid on the common shares, must be ratably
    allocated to each day in a Non-Electing U.S. Holder&#146;s
    holding period for the common shares. The amount of any such
    gain or excess distribution allocated to prior years of such
    Non-Electing U.S. Holder&#146;s holding period for the common
    shares (other than years prior to the first taxable year of the
    Corporation beginning after December&#160;31, 1986 for which the
    Corporation was not a PFIC) will be subject to U.S. federal
    income tax at the highest tax applicable to ordinary income in
    each such prior year. A Non-Electing U.S. Holder will be
    required to pay interest on the resulting tax liability for each
    such prior year, calculated as if such tax liability had been
    due in each such prior year. Such a Non-Electing U.S. Holder
    that is not a corporation must treat any such interest paid as
    &#147;personal interest,&#148; which is not deductible. The
    amount of any such gain or excess distribution allocated to the
    current year of such Non-Electing U.S. Holder&#146;s holding
    period for the common shares will be treated as ordinary income
    in the current year, and no interest charge will be incurred
    with respect to the resulting tax liability for the current year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Corporation is a PFIC for any taxable year during which a
    Non-Electing U.S. Holder holds common shares, the Corporation
    will continue to be treated as a PFIC with respect to such
    Non-Electing U.S. Holder, regardless of whether the Corporation
    ceases to be a PFIC in one or more subsequent years. A
    Non-Electing U.S. Holder may terminate this deemed PFIC status
    by electing to recognize gain (which will be taxed under the
    rules of Section&#160;1291 of the Code discussed above) as if
    such common shares were sold on the last day of the last taxable
    year for which the Corporation was a PFIC.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">QEF
    Election</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder that makes a QEF Election generally will not be
    subject to the rules of Section&#160;1291 of the Code discussed
    above. However, a U.S. Holder that makes a QEF Election will be
    subject to U.S. federal income tax on such U.S. Holder&#146;s
    pro rata share of (a)&#160;the net capital gain of the
    Corporation, which will be taxed as long-term capital gain to
    such U.S. Holder, and (b)&#160;the ordinary earnings of the
    Corporation, which will be taxed as ordinary income to such U.S.
    Holder. Generally, &#147;net capital gain&#148; is the excess of
    (a)&#160;net long-term capital gain over (b)&#160;net short-term
    capital loss, and &#147;ordinary earnings&#148; are the excess
    of (a)&#160;&#147;earnings and profits&#148; over (b)&#160;net
    capital gain. A U.S. Holder that makes a QEF Election will be
    subject to U.S. federal income tax on such amounts for each
    taxable year in which the Corporation is a PFIC, regardless of
    whether such amounts are actually distributed to such U.S.
    Holder by the Corporation. However, a U.S. Holder that makes a
    QEF Election may, subject to certain limitations, elect to defer
    payment of current U.S. federal income tax on such amounts,
    subject to an interest charge. If such U.S. Holder is not a
    corporation, any such interest paid will be treated as
    &#147;personal interest,&#148; which is not deductible.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder that makes a QEF Election generally (a)&#160;may
    receive a tax-free distribution from the Corporation to the
    extent that such distribution represents &#147;earnings and
    profits&#148; of the Corporation that were previously included
    in income by the U.S. Holder because of such QEF Election and
    (b)&#160;will adjust such U.S. Holder&#146;s tax basis in the
    common shares to reflect the amount included in income or
    allowed as a tax-free distribution because of such QEF Election.
    In addition, a U.S. Holder that makes a QEF Election generally
    will recognize capital gain or loss on the sale or other taxable
    disposition of common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The procedure for making a QEF Election, and the U.S. federal
    income tax consequences of making a QEF Election, will depend on
    whether such QEF Election is timely. A QEF Election will be
    treated as &#147;timely&#148; if such QEF Election is made for
    the first year in the U.S. Holder&#146;s holding period for the
    common shares in which the Corporation was a PFIC.
</DIV>

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    <BR>
    29
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A&#160;U.S. Holder may make a timely QEF Election by filing the
    appropriate QEF Election documents at the time such
    U.S.&#160;Holder files a U.S. federal income tax return for such
    first year. However, if the Corporation was a PFIC in a prior
    year, then in addition to filing the QEF Election documents, a
    U.S. Holder must elect to recognize (a)&#160;gain (which will be
    taxed under the rules of Section&#160;1291 of the Code discussed
    above) as if the common shares were sold on the qualification
    date or (b)&#160;if the Corporation was also a CFC, such U.S.
    Holder&#146;s pro rata share of the post-1986 &#147;earnings and
    profits&#148; of the Corporation as of the qualification date.
    The &#147;qualification date&#148; is the first day of the first
    taxable year in which the Corporation was a QEF with respect to
    such U.S. Holder. The election to recognize such gain or
    &#147;earnings and profits&#148; can only be made if such U.S.
    Holder&#146;s holding period for the common shares includes the
    qualification date. By electing to recognize such gain or
    &#147;earnings and profits,&#148; such U.S. Holder will be
    deemed to have made a timely QEF Election. In addition, under
    very limited circumstances, a U.S. Holder may make a retroactive
    QEF Election if such U.S. Holder failed to file the QEF Election
    documents in a timely manner.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A QEF Election will apply to the taxable year for which such QEF
    Election is made and to all subsequent taxable years, unless
    such QEF Election is invalidated or terminated or the IRS
    consents to revocation of such QEF Election. If a U.S. Holder
    makes a QEF Election and, in a subsequent taxable year, the
    Corporation ceases to be a PFIC, the QEF&#160;Election will
    remain in effect (although it will not be applicable) during
    those taxable years in which the Corporation is not a PFIC.
    Accordingly, if the Corporation becomes a PFIC in another
    subsequent taxable year, the QEF Election will be effective and
    the U.S. Holder will be subject to the QEF rules described above
    during any such subsequent taxable year in which the Corporation
    qualifies as a PFIC. In addition, the QEF Election will remain
    in effect (although it will not be applicable) with respect to a
    U.S. Holder even after such U.S. Holder disposes of all of such
    U.S. Holder&#146;s direct and indirect interest in the common
    shares. Accordingly, if such U.S. Holder reacquires an interest
    in the Corporation, such U.S. Holder will be subject to the QEF
    rules described above for each taxable year in which the
    Corporation is a PFIC.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each U.S. Holder should consult its own financial advisor, legal
    counsel, or accountant regarding the availability of, and
    procedure for making, a QEF Election. The Corporation will make
    available to U.S. Holders, upon their request, timely and
    accurate information as to its status as a PFIC and will use
    commercially reasonable efforts to provide to a purchaser
    acquiring common shares pursuant to this Private Placement
    Memorandum that is a U.S. Holder all information that a U.S.
    Holder making a QEF Election is required to obtain for U.S.
    federal income tax purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under applicable Treasury Regulations, a person that holds an
    option, warrant, or other right to acquire shares of a PFIC may
    not make a QEF Election that will apply to either (a)&#160;the
    option, warrant, or other right or (b)&#160;the shares of the
    PFIC subject to the option, warrant, or other right. In
    addition, under Treasury Regulations, if a person holds an
    option, warrant, or other right to acquire shares of a PFIC, the
    holding period with respect to the shares of the PFIC acquired
    on the exercise of such option, warrant, or other right will
    include the period that the option, warrant, or other right was
    held.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Accordingly, a U.S. Holder of the warrants may not make a QEF
    Election that will apply to either the warrants or the common
    shares subject to the warrants. The general effect of these
    special rules is that (a)&#160;excess distributions paid on
    common shares acquired on exercise of the warrants, and gains
    recognized on the sale or other taxable disposition of common
    shares acquired on exercise of the warrants, will be spread over
    a U.S. Holder&#146;s entire holding period for such warrants and
    common shares (pursuant to the rules of Section&#160;1291 of the
    Code discussed above) and (b)&#160;if a U.S. Holder makes a QEF
    Election on the exercise of the warrants and receipt of the
    common shares, that election generally will not be a timely QEF
    Election with respect to such common shares (and the rules of
    Section&#160;1291 of the Code discussed above will continue to
    apply). It appears, however, that a U.S. Holder receiving common
    shares on the exercise of the warrants should be eligible to
    make an effective QEF Election as of the first day of the
    taxable year of such U.S. Holder beginning after the receipt of
    such common shares if such U.S. Holder also makes an election to
    recognize gain (which will be taxed under the rules of
    Section&#160;1291 of the Code discussed above) as if such common
    shares were sold on such date at fair market value. In addition,
    gain recognized on the sale or other taxable disposition (other
    than by exercise) of the warrants by a U.S. Holder will be
    subject to the rules of Section&#160;1291 of the Code discussed
    above. Each U.S. Holder should consult its own financial
    advisor, legal counsel, or accountant regarding the application
    of the PFIC rules to the warrants and the common shares.
    received on exercise of the warrants.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times"><FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder may make a
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election only if the common shares are marketable stock. The
    common shares generally will be &#147;marketable stock&#148; if
    the common shares are regularly traded on a qualified exchange
    or other market. For this purpose, a &#147;qualified exchange or
    other market&#148; includes (a)&#160;a national securities
    exchange that is
</DIV>

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    <BR>
    30
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    registered with the Securities and Exchange Commission,
    (b)&#160;the national market system established pursuant to
    section&#160;11A of the Securities and Exchange Act of 1934, or
    (c)&#160;a foreign securities exchange that is regulated or
    supervised by a governmental authority of the country in which
    the market is located, provided that (i)&#160;such foreign
    exchange has trading volume, listing, financial disclosure,
    surveillance, and other requirements designed to prevent
    fraudulent and manipulative acts and practices, remove
    impediments to and perfect the mechanism of a free, open, fair,
    and orderly market, and protect investors (and the laws of the
    country in which the foreign exchange is located and the rules
    of the foreign exchange ensure that such requirements are
    actually enforced) and (ii)&#160;the rules of such foreign
    exchange effectively promote active trading of listed stocks. If
    the common shares are traded on such a qualified exchange or
    other market, the common shares generally will be
    &#147;regularly traded&#148; for any calendar year during which
    the common shares are traded, other than in de minimis
    quantities, on at least 15&#160;days during each calendar
    quarter.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder that makes a
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election generally will not be subject to the rules of
    Section&#160;1291 of the Code discussed above. However, if a
    U.S.&#160;Holder makes a
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election after the beginning of such U.S.&#160;Holder&#146;s
    holding period for the common shares and such U.S. Holder has
    not made a timely QEF Election, the rules of Section&#160;1291
    of the Code discussed above will apply to certain dispositions
    of, and distributions on, the common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder that makes a
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election will include in ordinary income, for each taxable year
    in which the Corporation is a PFIC, an amount equal to the
    excess, if any, of (a)&#160;the fair market value of the common
    shares as of the close of such taxable year over (b)&#160;such
    U.S. Holder&#146;s adjusted tax basis in such common shares. A
    U.S. Holder that makes a
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election will be allowed a deduction in an amount equal to the
    lesser of (a)&#160;the excess, if any, of (i)&#160;such U.S.
    Holder&#146;s adjusted tax basis in the common shares over
    (ii)&#160;the fair market value of such common shares as of the
    close of such taxable year or (b)&#160;the excess, if any, of
    (i)&#160;the amount included in ordinary income because of such
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election for prior taxable years over (ii)&#160;the amount
    allowed as a deduction because of such
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election for prior taxable years.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder that makes a
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election generally also will adjust such U.S. Holder&#146;s tax
    basis in the common shares to reflect the amount included in
    gross income or allowed as a deduction because of such
    Mark-to-Market Election. In addition, upon a sale or other
    taxable disposition of common shares, a U.S. Holder that makes a
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election will recognize ordinary income or loss (not to exceed
    the excess, if any, of (a)&#160;the amount included in ordinary
    income because of such
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election for prior taxable years over (b)&#160;the amount
    allowed as a deduction because of such
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election for prior taxable years).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election applies to the taxable year in which such
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election is made and to each subsequent taxable year, unless the
    common shares cease to be &#147;marketable stock&#148; or the
    IRS consents to revocation of such election. Each U.S. Holder
    should consult its own financial advisor, legal counsel, or
    accountant regarding the availability of, and procedure for
    making, a
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Other
    PFIC Rules</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under Section&#160;1291(f) of the Code, the IRS has issued
    proposed Treasury Regulations that, subject to certain
    exceptions, would cause a U.S. Holder that had not made a timely
    QEF Election to recognize gain (but not loss) upon certain
    transfers of common shares that would otherwise be tax-deferred
    (e.g., gifts and exchanges pursuant to corporate
    reorganizations). However, the specific U.S. federal income tax
    consequences to a U.S. Holder may vary based on the manner in
    which common shares are transferred.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain additional adverse rules will apply with respect to a
    U.S. Holder if the Corporation is a PFIC, regardless of whether
    such U.S. Holder makes a QEF Election. For example under
    Section&#160;1298(b)(6) of the Code, a U.S. Holder that uses
    common shares as security for a loan will, except as may be
    provided in Treasury Regulations, be treated as having made a
    taxable disposition of such common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The PFIC rules are complex, and each U.S. Holder should consult
    its own financial advisor, legal counsel, or accountant
    regarding the PFIC rules and how the PFIC rules may affect the
    U.S. federal income tax consequences of the acquisition,
    ownership, and disposition of common shares.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    31
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->
<A name='118'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">LEGAL
    MATTERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain legal matters relating to the securities offered hereby
    will be passed upon on behalf of us by Bennett Jones LLP and
    Dorsey&#160;&#38; Whitney LLP and on behalf of the underwriter
    by Fasken Martineau DuMoulin LLP and White&#160;&#38; Case LLP.
    The partners and associates of each of Bennett Jones LLP and
    Fasken Martineau DuMoulin LLP, as a group, beneficially own,
    directly or indirectly, less than 1% of our securities.
</DIV>
<A name='119'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">LEGAL
    PROCEEDINGS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are not involved in or aware of any present or pending legal
    proceedings against us involving us jointly or separately as a
    party.
</DIV>
<A name='120'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">AUDITORS,
    TRANSFER AGENT AND REGISTRAR</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our auditors are Ernst&#160;&#38; Young LLP, Chartered
    Accountants, 1000, 440-2nd Avenue S.W., Calgary, Alberta
    T2P&#160;5E9.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The transfer agent and registrar for our common shares is
    Computershare Trust&#160;Company of Canada at its principal
    offices in the cities of Calgary, Alberta and Toronto, Ontario.
</DIV>
<A name='121'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">STATUTORY
    RIGHTS OF WITHDRAWAL AND RESCISSION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Securities legislation in certain of the provinces of Canada
    provides purchasers with the right to withdraw from an agreement
    to purchase securities. This right may be exercised within two
    business days after receipt or deemed receipt of a prospectus
    and any amendment. In several of the provinces, securities
    legislation further provides a purchaser with remedies for
    rescission or, in some jurisdictions, damages if the prospectus
    and any amendment contains a misrepresentation or is not
    delivered to the purchaser, provided that the remedies for
    rescission or damages are exercised by the purchaser within the
    time limit prescribed by the securities legislation of the
    purchaser&#146;s province. The purchaser should refer to any
    applicable provisions of the securities legislation of the
    purchaser&#146;s province for the particulars of these rights or
    consult with a legal adviser.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    32
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->
<A name='122'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">AUDITORS&#146;
    CONSENT</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We consent to the use of our report dated February&#160;8, 2006
    to the shareholders of Oncolytics Biotech Inc.
    (&#147;Oncolytics&#148;) incorporated by reference in the short
    form prospectus dated
    February&#160;&#160;<FONT face="wingdings">&#108;</FONT>&#160;,
    2007 of Oncolytics relating to the sale and issuance of
    4,000,000&#160;units.
</DIV>

<DIV style="margin-top: 48pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">    <FONT style="font-family: 'Times New Roman', Times">Calgary,
    Canada
    </FONT></TD>
    <TD nowrap align="right">    <FONT style="font-family: 'Times New Roman', Times">(signed)&#160;&#160;&#160;&#160;<FONT face="wingdings">&#108;</FONT>&#160;&#160;&#160;&#160;
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">    <FONT style="font-family: 'Times New Roman', Times">February&#160;&#160;<FONT face="wingdings">&#108;</FONT>&#160;,
    2007
    </FONT></TD>
    <TD nowrap align="right">    <FONT style="font-family: 'Times New Roman', Times">Chartered
    Accountants
    </FONT></TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    33
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="center" style="font-size: 12pt; margin-top: 18pt"><B>PART II<BR>
INFORMATION NOT REQUIRED TO BE DELIVERED TO<BR>
OFFEREES OR PURCHASERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under the <I>Business Corporations Act </I>(Alberta), Oncolytics Biotech Inc. (the &#147;Corporation&#148;) may
indemnify a director or officer, a former director or officer, or a person who acts or acted at the
Corporation&#146;s request as a director or officer or a body corporate of which the Corporation is or
was a shareholder or creditor, and the director&#146;s or
officer&#146;s heirs and legal representatives,
against all costs, charges and expenses, including an amount paid to settle an action or satisfy a
judgment, reasonably incurred by the individual in respect of any civil, criminal or administrative
action or proceeding to which the individual is involved because of that association with the
Corporation or other entity, and the Corporation may advance moneys to such an individual for the
costs, charges and expenses of such a proceeding. The Corporation may not indemnify such an
individual unless the individual acted honestly and in good faith with a view to the best interests
of the Corporation, or, as the case may be, to the best interests of the other entity for which the
individual acted as a director or officer or in a similar capacity at the Corporation&#146;s request,
and, in the case of a criminal or administrative action or proceeding that is enforced by a
monetary penalty, the individual had reasonable grounds for believing that the individual&#146;s conduct
was lawful. In addition, the individual must repay any moneys advanced by the Corporation if the
individual has not fulfilled the conditions set out in the preceding sentence. Such indemnification
or advance of moneys may be made in connection with a derivative action only with court approval.
Such an individual is entitled to indemnification from the Corporation as a matter of right if the
individual was not judged by the court or other competent authority to have committed any fault or
omitted to do anything that the individual ought to have done, and the individual fulfilled the
conditions set forth above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In accordance with and subject to the <I>Business Corporations Act </I>(Alberta), the by-laws of the
Corporation provide that the Corporation shall indemnify a director or officer, a former director
or officer, or a person who acts or acted at the Corporation&#146;s request as a director or officer, or
a body corporate of which the Corporation is or was a shareholder or creditor, and the director&#146;s
or officer&#146;s heirs and legal representatives, against all costs, charges and expenses, including an
amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any
civil, criminal or administrative action or proceeding to which he is made a party by reason of
being or having been a director or officer of the Corporation or other entity if he acted honestly
and in good faith with a view to the best interests of the Corporation or, as the case may be, to
the best interests of the other entity for which he acted as a director or officer at the
Corporation&#146;s request, and, in the case of a criminal or administrative action or proceeding that
is enforced by monetary penalty, he had reasonable grounds for believing that his conduct was
lawful. The Corporation shall also indemnify such person in such other circumstances as the
<I>Business Corporations Act </I>(Alberta) permits or requires.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Corporation maintains a directors&#146; &#038; officers&#146; insurance policy for the benefit of the
directors and officers of the Corporation and its subsidiaries against liability incurred by them
in their official capacities for which they become obligated to pay to the extent permitted by
applicable law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Insofar as indemnification for liabilities arising under the U.S. Securities Act of 1933, as
amended, may be permitted to directors, officers or persons controlling the Corporation pursuant to
the foregoing provisions, the Corporation has been informed that, in the opinion of the U.S.
Securities and Exchange Commission, such indemnification is against public policy as expressed in
the Securities Act and is therefore unenforceable.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->II-1<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 12pt; margin-top: 18pt"><B>EXHIBITS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="center"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Description</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="line-height: 5pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>3.1</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Underwriting Agreement dated as of February&nbsp;6, 2007*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>4.1</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Renewal Annual Information Form dated March&nbsp;2, 2006, for the year ended December
31, 2005, incorporated by reference to the Corporation&#146;s Annual Report of Form
40-F, filed with the Commission on March&nbsp;3, 2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>4.2</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Audited financial statements, together with the accompanying notes to the
financial statements, for the fiscal years ended December&nbsp;31, 2005 and 2004 and
the auditors&#146; report thereon addressed to the Corporation&#146;s shareholders,
incorporated by reference to the Corporation&#146;s Annual Report on Form&nbsp;40-F, filed
with the Commission on March&nbsp;3, 2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>4.3</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Management Proxy Circular dated March&nbsp;24, 2006 relating to the annual and special
meeting of shareholders held on April&nbsp;26, 2006, excluding those portions which are
not prescribed by Canadian securities law to be included in the Canadian
Prospectus, incorporated by reference to the Corporation&#146;s Current Report on Form
6-K, furnished to the Commission on March&nbsp;31, 2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>4.4</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Management&#146;s discussion and analysis of financial condition and results of
operations dated March&nbsp;2, 2006, for the year ended December&nbsp;31, 2005, incorporated
by reference to the Corporation&#146;s Annual Report on Form&nbsp;40-F, filed with the
Commission on March&nbsp;3, 2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>4.5</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Unaudited interim financial statements as at September&nbsp;30, 2006 and for the three
and nine months ended September&nbsp;30, 2006, together with the notes thereto,
incorporated by reference to the Corporation&#146;s Current Report on Form&nbsp;6-K,
furnished to the Commission on November&nbsp;3, 2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>4.6</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Management&#146;s discussion and analysis of financial condition and results of
operations dated November&nbsp;2, 2006, for the three and nine months ended September
30, 2006, incorporated by reference to the Corporation&#146;s Current Report on Form
6-K, furnished to the Commission on November&nbsp;3, 2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>4.7</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Reconciliation of financial statements as at September&nbsp;30, 2006 and for the three
and nine months ended September&nbsp;30, 2006, incorporated by reference to the
Corporation&#146;s Current Report on Form&nbsp;6-K, furnished to the Commission on February
5, 2007</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>5.1</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Ernst &#038; Young LLP dated February&nbsp;5, 2007</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>5.2</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Bennett Jones LLP dated February&nbsp;5, 2007</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>5.3</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Fasken Martineau DuMoulin LLP dated February&nbsp;5, 2007</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>6.1</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Powers of Attorney (included on the signature pages of this Registration Statement)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>7.1</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Warrant Indenture, dated as of February &#95;&#95;&#95;, 2007, between the Corporation and
Computershare Trust Company of Canada, as trustee*</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 12pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>To be filed by amendment</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt"><!-- Folio -->II-2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 12pt; margin-top: 18pt"><B>PART III<BR>
UNDERTAKING AND CONSENT TO SERVICE OF PROCESS</B>
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 12pt"><B>Item&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Undertaking</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Registrant undertakes to make available, in person or by telephone, representatives to respond
to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the
Commission staff, information relating to the securities registered pursuant to this Form F-10 or
to transactions in said securities.
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt"><B>Item&nbsp;2.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Consent to Service of Process</B><BR>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Concurrently with the filing of this Registration Statement on Form F-10, the Registrant is
filing with the Commission a written irrevocable consent and power of attorney on Form F-X.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Any change to the name and address of the agent for service of the Registrant will be communicated
promptly to the Commission by amendment to Form F-X referencing the file number of this
Registration Statement.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->III-1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 12pt; margin-top: 18pt"><B>Signatures</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of the Securities Act, the Registrant certifies that it has
reasonable grounds to believe that it meets all of the requirements for filing on Form F-10 and has
duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Calgary, Province of Alberta, Canada, on February&nbsp;6, 2007.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>ONCOLYTICS BIOTECH INC.</B><BR><BR><BR></TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Bradley G. Thompson</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Bradley G. Thompson&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Chief Executive Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by
or on behalf of the following persons in the capacities indicated on February&nbsp;6, 2007:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="38%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="center"><B><U>Signature</U></B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B><U>Title</U></B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 24pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">/s/ Bradley G. Thompson*<DIV style="font-size: 1pt; border-top: 1px solid #000000"></DIV>Bradley G. Thompson</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="2">President, Chief Executive Officer and<BR>Chairman of the Board<BR>(Principal Executive Officer)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">/s/ Douglas A. Ball*<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>Douglas A. Ball</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="2">Chief Financial Officer and Director<BR>(Principal Financial and Accounting Officer)</TD>
</TR>
<TR valign="bottom" style="font-size: 20pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">/s/ William A. Cochrane*<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>William A. Cochrane</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="2">Director</TD>
</TR>
<TR valign="bottom" style="font-size: 20pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">/s/ Ger J. van Amersfoort*<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>Ger J. van Amersfoort</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="2">Director</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->III-2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="38%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="center"><B><U>Signature</U></B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B><U>Title</U></B></TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 24pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">/s/ Robert B. Schultz*<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>Robert B. Schultz</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="2">Director</TD>
</TR>
<TR valign="bottom" style="font-size: 20pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">/s/ Fred A. Stewart*<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>Fred A. Stewart</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="2">Director</TD>
</TR>
<TR valign="bottom" style="font-size: 20pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">/s/ Ed Levy*<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>Ed Levy</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="2">Director</TD>
</TR>
<TR valign="bottom" style="font-size: 20pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">/s/ J. Mark Lievonen*<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>J. Mark Lievonen</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="2">Director</TD>
</TR>
<TR valign="bottom" style="font-size: 20pt"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">/s/ Jim Dinning*<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>Jim Dinning</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="2">Director</TD>
</TR>
<TR valign="bottom" style="font-size: 20pt"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ Douglas A. Ball*<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;Douglas A. Ball</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="2">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to powers of attorney executed by the persons named above whose signatures are marked by an
asterisk, Douglas A. Ball, as attorney-in-fact, does hereby sign this amendment to the registration statement on behalf of each such person, in each case in the
capacity indicated, on the date indicated. Such powers of attorney were filed as a part of the signature block of the Registrant&#146;s form F-10, filed with the
Commission on February&nbsp;5, 2007.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->III-3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 12pt; margin-top: 18pt"><B>Authorized representative</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, the Authorized
Representative has signed this Registration Statement, solely in his capacity as the duly
authorized representative of Oncolytics Biotech Inc. in the United States, in the State of
California, on February&nbsp;6, 2007.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;<BR><BR><BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/  Karl Mettinger</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Karl Mettinger&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Chief Medical Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->III-4<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>2
<FILENAME>o34618a1exv5w1.htm
<DESCRIPTION>EXHIBIT 5.1
<TEXT>
<HTML>
<HEAD>
<TITLE>exv5w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="right" style="font-size: 10pt; margin-top: 2pt"><B>Exhibit 5.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 18pt">We
consent to the incorporation by reference therein of our report,
dated February&nbsp;8, 2006, in the Amended Registration Statement on
Form&nbsp;F-10 of Oncolytics Biotech Inc. (&#147;Oncolytics&#148;)
filed with the Securities and Exchange Commission (the
&#147;Commission&#148;) on February&nbsp;6, 2007 (the
&#147;Registration Statement&#148;), with respect to the audited
balance sheets of Oncolytics as at December&nbsp;31, 2005 and 2004
and the statements of loss and deficit and cash flows for the three
years ended December&nbsp;31, 2005 and the cumulative period from
inception on April&nbsp;2, 1998, filed with the Commission as
Exhibit&nbsp;2 to the Form&nbsp;40-F of Oncolytics and included as
Exhibit&nbsp;4.2 to the Registration Statement.
</DIV>

<DIV align="left" style="margin-top: 12pt">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="98%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="75%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">Calgary, Alberta <BR>
February 6, 2007</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>[signed]</I><BR>
Ernst &#38; Young LLP</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.2
<SEQUENCE>3
<FILENAME>o34618a1exv5w2.htm
<DESCRIPTION>EXHIBIT 5.2
<TEXT>
<HTML>
<HEAD>
<TITLE>exv5w2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="right" style="font-size: 10pt; margin-top: 2pt"><B>Exhibit&nbsp;5.2</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 18pt">February&nbsp;6, 2007
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 18pt">Oncolytics Biotech Inc.<BR>
210, 1167 Kensington Crescent N.W.<BR>
Calgary, AB T2N 1X7
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">United States Securities and Exchange Commission
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Ladies and Gentlemen:
</DIV>


<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>Re:</B>&nbsp;&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Registration Statement on Form&nbsp;F-10</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 12pt">We hereby consent to the reference to us in the registration statement on Form F-10 (the
&#147;<B>Registration Statement</B>&#148;) and the related preliminary short form prospectus (the &#147;<B>Prospectus</B>&#148;) of
Oncolytics Biotech Inc. relating to the offering of units. We also consent to the use of our firm
name on the cover page of the Prospectus and under the headings &#147;Eligibility for Investment&#148;,
&#147;Enforceability of Civil Liabilities&#148;, &#147;Documents Filed As Part&nbsp;Of The Registration Statement,
&#147;Canadian Federal Income Tax Considerations&#148; and &#147;Legal Matters&#148;. We also consent to the reference
to our opinions under the headings &#147;Eligibility for Investment&#148; and &#147;Canadian Federal Income Tax
Considerations, all as contained in the Prospectus included in the Registration Statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In giving this consent, we do not thereby admit that we come within the category of persons whose
consent is required by the Securities Act of 1933 or the rules and regulations promulgated
thereunder.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Yours truly,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>BENNETT JONES LLP</B><BR>&nbsp;<BR>
(Signed)
&#147;<I>Bennett Jones LLP</I>&nbsp;&#148;

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.3
<SEQUENCE>4
<FILENAME>o34618a1exv5w3.htm
<DESCRIPTION>EXHIBIT 5.3
<TEXT>
<HTML>
<HEAD>
<TITLE>exv5w3</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="right" style="font-size: 10pt; margin-top: 2pt"><B>Exhibit&nbsp;5.3</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 18pt">February&nbsp;6, 2007
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 18pt">Oncolytics Biotech Inc.<BR>
210, 1167 Kensington Crescent N.W.<BR>
Calgary, AB T2N 1X7

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">United States Securities and Exchange Commission
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Ladies and Gentlemen:
</DIV>


<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>Re:</B>&nbsp;&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Registration Statement on Form&nbsp;F-10</B></TD>
</TR>
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We hereby consent to the reference to us in the registration statement on Form F-10 (the
&#147;<B>Registration Statement</B>&#148;) and the related preliminary short form prospectus (the &#147;<B>Prospectus</B>&#148;) of
Oncolytics Biotech Inc. relating to the offering of units. We also consent to the use of our firm
name on the cover page of the Prospectus and under the heading &#147;Legal Matters&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In giving this consent, we do not thereby admit that we come within the category of persons whose
consent is required by the Securities Act of 1933 or the rules and regulations promulgated
thereunder.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Yours truly,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>FASKEN MARTINEAU DUMOULIN LLP</B><BR>&nbsp;<BR>
(Signed)
&#147;<I>FASKEN MARTINEAU DUMOULIN LLP</I>&nbsp;&#148;

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>5
<FILENAME>o34618a1o3461800.gif
<DESCRIPTION>GRAPHIC
<TEXT>
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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
