-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 PglaYcR7dFMcfkfvNhVlWVNG+uO80cejlDdX2THp1Qt6elu+/mXanC9gYGOWAwQR
 VRCEY0BgsXIGk4B81JpyBg==

<SEC-DOCUMENT>0000912282-07-000286.txt : 20070302
<SEC-HEADER>0000912282-07-000286.hdr.sgml : 20070302
<ACCEPTANCE-DATETIME>20070302170022
ACCESSION NUMBER:		0000912282-07-000286
CONFORMED SUBMISSION TYPE:	40-F
PUBLIC DOCUMENT COUNT:		16
CONFORMED PERIOD OF REPORT:	20061231
FILED AS OF DATE:		20070302
DATE AS OF CHANGE:		20070302

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:		40-F
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-31062
		FILM NUMBER:		07668553

	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>40-F
<SEQUENCE>1
<FILENAME>oncolytic40f_2006.htm
<TEXT>
<HTML>
<HEAD>
<TITLE> </TITLE>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>




<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>UNITED STATES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>SECURITIES AND EXCHANGE COMMISSION</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Washington, D.C. 20549</font></b></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:center;'><B><font SIZE=2>FORM 40-F</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>(Check one)</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="634" style=' border-collapse:collapse'>
    <tr>
        <td width="41" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2> <img src="ballot.jpg"> </font></b></p> </td>
        <td  colspan="4" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><B><font SIZE=2>REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934</font></B></p>
<p style='margin-left:0pt;text-indent:207.75pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><B><font SIZE=2>OR</font></B></p> </td> </tr>
    <tr>
        <td width="41" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2> <img src="ballotx.jpg"> </font></b></p> </td>
        <td  colspan="4" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><B><font SIZE=2>ANNUAL REPORT PURSUANT TO SECTION 13(A) OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934</font></B><u></u></p> </td> </tr>
    <tr>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>For the fiscal year ended: December 31, 2006</font></b></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Commission file number 000-31062</font></b></p> </td> </tr>
    <tr>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td  colspan="5" valign=top style=' border-bottom:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><B><font SIZE=2>ONCOLYTICS BIOTECH INC.</font></B></p> </td> </tr>
    <tr>
        <td  colspan="5" valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(Exact name of Registrant as specified in its charter)</font></p> </td> </tr>

    <tr>
        <td  colspan="5" valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style=' border-bottom:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Not Applicable</font></b></p> </td>
        <td  colspan="2" valign=top style=' border-bottom:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Province of Alberta, Canada</font></b><u></u></p> </td>
        <td width="213" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Not Applicable</font></b></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(Translation of Registrant&#146;s name into English (if applicable))</font><u></u></p> </td>
        <td  colspan="2" valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(Province of other jurisdiction of incorporation or organization)</font><u></u></p> </td>
        <td width="213" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(I.R.S. Employer Identification Number (if applicable))</font><u></u></p> </td> </tr>
    <tr>
        <td  colspan="5" valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td> </tr>

    <tr>
        <td  colspan="2" valign=top style=' border-bottom:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style=' border-bottom:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>2834</font></b></p> </td>
        <td width="213" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td  colspan="5" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(Primary Standard Industrial Classification Code Number (if applicable))</font></p> </td> </tr>
    <tr>
        <td  colspan="5" valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td> </tr>

    <tr>
        <td  colspan="5" valign=top style=' border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Suite #210, 1167 Kensington Crescent N.W., Calgary, Alberta, Canada, T2N 1X7</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>(403) 670-7377</font></b></p> </td> </tr>
    <tr>
        <td  colspan="5" valign=top>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(Address and telephone number of Registrant&#146;s principal executive offices)</font></p> </td> </tr>
    <tr>
        <td  colspan="5" valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td> </tr>

    <tr>
        <td  colspan="5" valign=top style=' border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>DL Services, Inc.,</font></b><font size=2> </font><b><font size=2>1420 Fifth Avenue, Suite 3400, Seattle, Washington 98101</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>(206) 903-8800</font></b><font size=2>, </font></p> </td> </tr>
    <tr>
        <td  colspan="5" valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Name, address (including zip code) and telephone number (including area code) of agent for service <BR>
in the United States)</font></p> </td> </tr>
    <tr>
        <td width="41" ></td>

        <td width="160" ></td>

        <td width="148" ></td>

        <td width="72" ></td>

        <td width="213" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>Securities registered or to be registered pursuant to Section 12(b) of the Act. </font></p>


<table border="0" cellspacing=0 cellpadding=0 width="634" style=' border-collapse:collapse'>
    <tr>
        <td width="296" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:12pt;margin-bottom:0pt'><font size=2>Title of each class</font><br> <b><font size=2>Common Shares</font></b></p> </td>
        <td width="338" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:12pt;margin-bottom:0pt'><font size=2>Name of each exchange on which registered</font><br> <b><font size=2>NASDAQ SmallCap</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>Securities registered or to be registered pursuant to Section 12(g) of the Act. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><FONT SIZE="2"><U><B>None</B></U> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>(Title of Class)</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><FONT SIZE="2"><U><B>None</B></U> </FONT><BR>
</p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>(Title of Class)</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>For annual reports, indicate by check mark the information filed with this Form: </font></p>


<table border="0" cellspacing=0 cellpadding=0 width="574" style=' border-collapse:collapse'>
    <tr>
        <td width="312" nowrap valign=top style='padding:12.0pt 0in 0in 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2> <img src="ballotx.jpg">&nbsp;&nbsp;  Annual information form </font></p> </td>
        <td width="262" nowrap valign=top style='padding:12.0pt 0in 0in 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2> <img src="ballotx.jpg">&nbsp;&nbsp; Audited annual financial statements</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>Indicate the number of outstanding shares of each of the issuer&#146;s classes of capital or common stock as of the close of the period covered by the annual report. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>As at December 31, 2006, 36,520,748 Common Shares without par value were issued and outstanding.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>Indicate by check mark whether the Registrant by filing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934 (the &#147;Exchange Act&#148;). If &#147;Yes&#148; is marked, indicate the filing number assigned to the Registrant in connection with such Rule. </font></p>


<table border="0" cellspacing=0 cellpadding=0 width="382" style=' border-collapse:collapse'>
    <tr>
        <td colspan=2 nowrap valign=top style='padding:12.0pt 0in 0in 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2> <img src="ballot.jpg">&nbsp;&nbsp; Yes: 82-____________</font></p> </td>
        <td width="69" nowrap valign=top style='padding:12.0pt 0in 0in 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2> <img src="ballotx.jpg">&nbsp;&nbsp; No</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. </font></p>


<table border="0" cellspacing=0 cellpadding=0 width="375" style=' border-collapse:collapse'>
    <tr>
        <td width="312" nowrap valign=top style='padding:12.0pt 0in 0in 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2> <img src="ballotx.jpg">&nbsp;&nbsp; Yes </font></p> </td>
        <td width="17" nowrap valign=top style='padding:12.0pt 0in 0in 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>  </font></p> </td>
        <td width="45" nowrap valign=top style='padding:12.0pt 0in 0in 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2> <img src="ballot.jpg">&nbsp;&nbsp; No</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>Explanatory Note: Oncolytics Biotech Inc. is a Canadian issuer eligible to file our annual report pursuant to Section&nbsp;13 of the Securities Exchange Act of 1934 (the &#147;Exchange Act&#148;) on Form&nbsp;40-F. We are a &#147;foreign private issuer&#148; as defined in Rule&nbsp;3b-4 under the Exchange Act and in Rule&nbsp;405 under the Securities Act of 1933. Our equity securities are accordingly exempt from Sections&nbsp;14(a), 14(b), 14(c), 14(f) and 16 of the 1934 Act pursuant to Rule&nbsp;3a12-3. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:10pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>N</font><font SIZE=2>OTE REGARDING FORWARD LOOKING STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Certain statements in this document and the documents attached as exhibits hereto constitute &#147;forward-looking statements&#148; within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Oncolytics Biotech Inc., or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are statements that are not historical facts, and include but are not limited to, estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to the efficacy of our technologies; the timing and results of clinical studies related to our technologies; future operations, products and
services; the impact of regulatory initiatives on our operations; the size of and opportunities related to the markets for our technologies; general industry and macroeconomic growth rates; expectations related to possible joint and/or strategic ventures and statements regarding future performance. Forward-looking statements generally, but not always, are identified by the words &#147;expects,&#148; &#147;anticipates,&#148; &#147;believes,&#148; &#147;intends,&#148; &#147;estimates,&#148; &#147;projects&#148;, &#147;potential&#148;, &#147;possible&#148; and similar expressions, or that events or conditions &#147;will,&#148; &#147;may,&#148; &#147;could&#148; or &#147;should&#148; occur.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The forward-looking statements in this Annual Report are subject to various risks and uncertainties, most of which are difficult to predict and generally beyond our control, including without limitation:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font size=2>uncertainty as to our ability to achieve the goals and satisfy assumptions of management;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font size=2>the uncertainties related to the outcome of clinical studies and the long process related to such studies;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font size=2>the need for regulatory approvals to market REOLYSIN&reg; and other products;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font size=2>our need for additional financing which may not be available on acceptable terms or at all;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font size=2>uncertainty as to whether we will be able to complete any licensing, partnering or marketing arrangements for our technologies; </font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font size=2>uncertainty as to the market acceptance of our products and our ability to generate sufficient revenues to make our products and technologies commercially viable;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font size=2>the intense competition in the biotechnology industry and risks related to changing technology that may render our technology obsolete; and</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font size=2>other factors identified under the heading &#147;Risk Factors&#148; in our Renewal Annual Information Form, and those that are discussed or identified in our other public filings with the SEC.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Our actual results, performance or achievement could differ significantly from those expressed in, or implied by, our forward-looking statements. Accordingly, we cannot assure that any of the events anticipated by our forward-looking statements will occur, or if they do, what impact they will have on our results of operations and financial condition.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Forward-looking statements are based on our beliefs, opinions and expectations at the time they are made, and we do not assume any obligation to update our forward-looking statements if those beliefs, opinions, or expectations, or other circumstances, should change.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>-3- </FONT></P>
 <BR><BR>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>
<p style='page-break-before:always'></p>



<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>For all of the reasons set forth above, investors should not place undue reliance on forward-looking statements.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>DIFFERENCES IN UNITED STATES AND CANADIAN REPORTING PRACTICES</font></B></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>We are permitted, under a multi-jurisdictional disclosure system adopted by the United States, to prepare this annual report in accordance with Canadian disclosure requirements, which are different from those of the United States. We prepare our financial statements, which are filed with this report on Form 40-F, in accordance with Canadian generally accepted accounting practices (&#147;GAAP&#148;), and, as such, our financial statements may be subject to Canadian auditing and auditor independence standards and may not be comparable to financial statements of United States companies. Significant differences between Canadian GAAP and United States GAAP are described in Note 19 of the Audited Financial Statements included herein by reference. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>CURRENCY</font></B></p>

<p style=' margin-bottom:12pt; margin-top:12pt;text-align:justify;'><font size=2>Unless otherwise indicated, all dollar amounts in this report are Canadian dollars. The exchange rate of Canadian dollars into United States dollars, on December 29, 2006, based upon the noon buying rate in New York City for cable transfers payable in Canadian dollars as certified for customs purposes by the Federal Reserve Bank of New York, was U.S.$1.00 = CDN $1.1652. </font></p>

<p style=' margin-bottom:12pt; margin-top:12pt;text-align:center;'><B><font SIZE=2>ANNUAL INFORMATION FORM</font></B></p>

<p style=' margin-bottom:12pt; margin-top:12pt;text-align:justify;'><font size=2>Our Renewal Annual Information Form (&#147;AIF&#148;) for the fiscal year ended December 31, 2006 is filed as part of this report and incorporated by reference herein.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:5pt;text-align:center;'><B><font SIZE=2>AUDITED ANNUAL FINANCIAL STATEMENTS AND</font></B></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><b><font size=2>MANAGEMENT&#146;S DISCUSSION AND ANALYSIS</font></b><font size=2> </font></p>

<p style=' margin-bottom:12pt; margin-top:5pt;text-align:left;'><i><font size=2>Audited Annual Financial Statements </font></i></p>

<p style=' margin-bottom:12pt; margin-top:5pt;text-align:left;'><font size=2>The audited financial statements, including the report of the auditors with respect thereto are included herein by reference. For a reconciliation of important differences between Canadian and United States generally accepted accounting principles, see Note 19 &#151; Reconciliation of Canadian GAAP to US GAAP of the Notes to Audited Financial Statements included herein by reference. </font></p>

<p style=' margin-bottom:12pt; margin-top:5pt;text-align:left;'><i><font size=2>Management&#146;s Discussion and Analysis </font></i></p>

<p style=' margin-bottom:12pt; margin-top:5pt;text-align:left;'><font size=2>Our management discussion and analysis of financial conditions and results of operations (&#147;MD&amp;A&#148;) is included herein by reference. </font></p>

<p style=' margin-bottom:12pt; margin-top:5pt;text-align:center;'><B><font SIZE=2>DISCLOSURE CONTROLS AND PROCEDURES</font></B><font size=2> </font></p>

<p style=' margin-bottom:12pt; margin-top:5pt;text-align:left;'><font size=2>At the end of the period covered by this report, an evaluation was carried out under the supervision of and with the participation of our management, including our Chief Executive Officer (&#147;CEO&#148;) and Chief Financial Officer (&#147;CFO&#148;), of the effectiveness of the design and operations of our disclosure controls and procedures (as defined by Rule 13a &#150; 15(e) and Rule 15d &#150; 15(e) under the Exchange Act. Based on that evaluation, the CEO and the CFO have concluded that, as of the end of the period covered by the report, </font></p>

<p style=' margin-bottom:0pt; margin-top:5pt;text-align:left;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P align =center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 4 - </FONT></P>
<BR><BR>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>
<BR>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:5pt;text-align:left;'><font size=2>our disclosure controls and procedures were adequately designed and effective in ensuring that information required to be disclosed by us in reports that we file of submit to the Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms.</font></p>

<p style=' margin-bottom:12pt; margin-top:5pt;text-align:left;'><font size=2>In addition, our CEO and CFO have determined that the disclosure controls and procedures are effective to ensure that material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow for accurate, required disclosure to be made on a timely basis.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><b><font size=2>MANAGEMENT&#146;S REPORT ON INTERNAL CONTROL OVER</font></b><font size=2> </font><B><font SIZE=2>FINANCIAL REPORTING</font></B></p>



<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Our management is responsible for establishing and maintaining adequate internal control over financial reporting, and has designed such internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of financial statements for external purposes in accordance with Canadian generally accepted accounting principles (GAAP), including a reconciliation to U.S. GAAP. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:5pt; margin-top:5pt;text-align:left;'><font size=2>Management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our internal controls and procedures over financial reporting will prevent all error and all fraud. A control system can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Oncolytics Biotech Inc. have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in
part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. </font></p>

<p style=' margin-bottom:12pt; margin-top:5pt;text-align:left;'><font size=2>Management has evaluated the design and operation of our internal control over financial reporting as of December 31, 2006, and has concluded that such internal control over financial reporting is effective as of December 31, 2006. There are no material weaknesses that have been identified by management in this regard. This assessment was based on criteria for effective internal control over financial reporting described in Internal Control &#150; Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As this report is required for U.S. reporting purposes, and we are a &#147;foreign private issuer&#148; as defined in Rule 3b-4 of the U.S. Securities and Exchange Act of 1934, as amended, and we are not a &#147;large accelerated filer&#148;, our auditors have not attested to management&#146;s evaluation of internal controls over financial reporting for the year ended
December 31, 2006.</font></p>

<p style=' margin-bottom:12pt; margin-top:5pt;text-align:center;'><B><font SIZE=2>CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING</font></B><font size=2> </font></p>

<p style=' margin-bottom:5pt; margin-top:5pt;text-align:left;'><font size=2>During the period covered by this Annual Report on Form 40-F, no changes occurred in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P align =center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 5 - </FONT></P>
<BR><BR>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>
<BR>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:5pt;text-align:center;'><B><font SIZE=2>CODE OF ETHICS FOR CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER AND CONTROLLER</font></B><font size=2> </font></p>

<p style=' margin-bottom:12pt; margin-top:5pt;text-align:left;'><font size=2>We have adopted a Code of Ethics for Chief Executive Officer, Chief Financial Officer and Controller. This code applies to our President and Chief Executive Officer, Chief Financial Officer and Controller. A copy of the Code of Ethics for Chief Executive Officer, Chief Financial Officer and Controller is attached to this annual report as Exhibit F, and is available in print to any shareholder who requests it by writing to Oncolytics Biotech Inc. at Suite #210, 1167 Kensington Crescent N.W., Calgary, Alberta, Canada, T2N 1X7, Attention:  Doug Ball. All amendments to the code, and all waivers of the code with respect to any of the officers covered by it, will be disclosed in our annual report on Form 40-F or in current reports on Form 6-K and provided in print to any shareholder upon written request. </font></p>

<p style=' margin-bottom:12pt; margin-top:5pt;text-align:left;'><font size=2>We have a separate Code of Ethics applicable to all of our employees, officers and directors, a copy of which is available in print to any shareholder who requests it by writing to Oncolytics Biotech Inc. at Suite #210, 1167 Kensington Crescent N.W., Calgary, Alberta, Canada, T2N 1X7, Attention:  Doug Ball. All amendments to the Code of Ethics applicable to our employees, officers and directors, and all waivers of the code with respect to any of the officers covered by it, will be disclosed in our annual report on Form 40-F or in current reports on Form 6-K and provided in print to any shareholder upon written request. </font></p>

<p style=' margin-bottom:12pt; margin-top:5pt;text-align:center;'><B><font SIZE=2>AUDIT COMMITTEE </font></B></p>

<p style=' margin-bottom:12pt; margin-top:5pt;text-align:left;'><font size=2>Our Board of Directors has a separately-designated standing Audit Committee for the purpose of overseeing our accounting and financial reporting processes and audits of our annual financial statements. We have adopted a formal written Audit Committee Charter and our Audit Committee reviews and reassesses the adequacy of the Charter on an annual basis. As at the review of the 2006 Annual Report, and as at the date of this report, the following individuals comprise the entire membership of our Audit Committee, which have been established in accordance with Section 3(a)(58)(A) of the Exchange Act: </font></p>


<table border="0" cellspacing=0 cellpadding=0 width="155" style=' border-collapse:collapse'>
    <tr >
        <td width="48" nowrap valign=top style='padding:5.0pt 0in 0in 0in; '>
            <p><font size=1>&nbsp;</font></p> </td>
        <td  nowrap colspan="2" valign=top style='padding:5.0pt 0in 0in 0in; '>
            <p><font size=2>Fred Stewart<BR>
Robert Schultz<BR>
Jim Dinning</font></p> </td>
        <td  width="11">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" ></td>

        <td width="92" ></td>

        <td width="4" ></td>

        <td width="11" ></td> </tr> </table>

<p style=' margin-bottom:12pt; margin-top:5pt;text-align:left;'><i><font size=2>Independence </font></i></p>

<p style=' margin-bottom:12pt; margin-top:5pt;text-align:left;'><font size=2>We have adopted the criteria for director independence and unrelatedness prescribed by the Sarbanes-Oxley Act of 2002, Section&nbsp;10A(m)(3) of the Exchange Act and Rule&nbsp;10A-3(b)(1) promulgated thereunder, for members of public company audit committees and in accordance with the rules of the NASDAQ marktet. </font></p>

<p style=' margin-bottom:12pt; margin-top:5pt;text-align:left;'><i><font size=2>Audit Committee Financial Expert </font></i></p>

<p style=' margin-bottom:12pt; margin-top:5pt;text-align:left;'><font size=2>Mr.&nbsp;Robert Schultz has been determined by us to meet the audit committee financial expert criteria prescribed by the Securities and Exchange Commission and has been designated as an audit committee financial expert for the Audit Committee. Each of the previously mentioned directors have also been determined by our board of directors to be independent within the criteria referred to above under the subheading &#147;Independence&#148;. Mr.&nbsp;Schultz is not deemed to be an expert for any purpose, including without limitation, Section 11 of the Securities Act of 1933, as amended, as a result of having been designated or identified as an audit committee financial expert.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>



<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P align =center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 6 - </FONT></P>
<BR><BR>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>
<BR>


<p style='page-break-before:always'></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'>
<b><font size=2>PRINCIPAL ACCOUNTING FEES AND SERVICES &#150; INDEPENDENT AUDITORS</font></b><font size=2> </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>The table setting forth our fees paid to our independent auditor, Ernst &amp; Young LLP for the years ended December 31, 2006 and December 31, 2005 are set forth under the heading </font><i><font size=2>&#147;Additional Information &#150; External Auditor Service Fees&#148;</font></i><font size=2> of our 2006 Annual Information Form included herein by reference. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES PROVIDED BY<BR>
INDEPENDENT AUDITORS</font></B><font size=2> </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>The Audit Committee pre-approves all audit services to be provided to us by our independent auditors. The Audit Committee&#146;s policy regarding the pre-approval of non-audit services to be provided to us by our independent auditors is that all such services shall be pre-approved by the Audit Committee or by the Chairman of the Audit Committee, who must report all such pre-approvals to the Audit Committee at their next meeting following the granting thereof. Non-audit services that are prohibited to be provided to us by our independent auditors may not be pre-approved. In addition, prior to the granting of any pre-approval, the Audit Committee or the Chairman, as the case may be, must be satisfied that the performance of the services in question will not compromise the independence of the independent auditors. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>OFF-BALANCE SHEET ARRANGEMENTS</font></B><font size=2> </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>As disclosed in our MD&amp;A included herein by reference, under the heading </font><i><font size=2>&#147;Liquidity and Capital Resources &#150; Off-Balance Sheet Arrangements&#148;</font></i><font size=2>, we have not entered into any off-balance sheet arrangements. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>TABLE OF CONTRACTUAL COMMITMENTS</font></B><font size=2> </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>As disclosed in our MD&amp;A included herein by reference, under the heading </font><i><font size=2>&#147;Liquidity and Capital Resources &#150; Capital Expenditures and Commitments&#148;,</font></i><font size=2> we have set forth our contractual commitments. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NASDAQ CORPORATE GOVERNANCE</font></B></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.04in;text-align:left;'><font size=2>Our common shares are quoted for trading on the Nasdaq SmallCap Market (&#147;Nasdaq&#148;). Section 4350 of the Nasdaq Marketplace Rules permits Nasdaq to grant exemptions to a foreign private issuer when provisions of Section 4350 related to qualitative listing requirements are contrary to a law, rule or regulation of any public authority exercising jurisdiction over such issuer or contrary to generally accepted business practices in the issuer&#146;s country of domicile. We are organized under the laws of the Province of Alberta and our common shares are listed for trading on The Toronto Stock Exchange. We comply with the laws of the Province of Alberta and rules and regulations of The Toronto Stock Exchange, including rules related to corporate governance practices. A description of the significant ways in which our governance practices differ from those followed by domestic companies
pursuant to Section 4350 of the Nasdaq Marketplace Rules is as follows:</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><i><font size=2>Shareholder Meeting Quorum Requirement</font></i><font size=2>:  The Nasdaq minimum quorum requirement for a shareholder meeting under Section 4350(f) of the Nasdaq Marketplace Rules is one-third of the outstanding shares of common stock. In addition, a company listed on Nasdaq is required to state our quorum requirement in our bylaws. Our quorum requirement is set forth in our corporate bylaws. A quorum for our shareholder meeting is two persons present and being, or representing by proxy, members holding not less than 5% of the issued shares entitled to be voted at such meeting.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P align =center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 7 - </FONT></P>
<BR><BR>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>
<BR>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>The foregoing is consistent with the laws, customs and practices in Canada and the rules of The Toronto Stock Exchange.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>UNDERTAKING AND CONSENT TO SERVICE OF PROCESS</font></B><font size=2> </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><i><font size=2>Undertaking </font></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>We undertake 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 Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><i><font size=2>Consent to Service of Process </font></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>We previously filed an Amended Appointment of Agent for Service of Process and Undertaking on Form F-X signed by Oncolytics Biotech Inc. and our agent for service of process on November 10, 2003 with respect to the class of securities in relation to which the obligation to file the Form 40-F arises, which Form F-X is incorporated herein by reference. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.04in;text-align:center;'><BR>
<b><font size=2>SIGNATURES</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.04in;text-align:justify;'><font size=2>Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on our behalf by the undersigned, thereto duly authorized. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Registrant </font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Oncolytics Biotech Inc. </font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.24in; text-indent:-0.24in;text-align:left;'><font size=2>By </font><u><font size=2>&nbsp;&nbsp;</font><i><font size=2>/s/Doug Ball</font></i><font size=2>&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;</font></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.24in;text-align:left;'><font size=2>Chief Financial Officer</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:5pt; margin-top:5pt;text-align:left;'><font size=2>Date: March 2, 2007</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>



<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P align =center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 8 - </FONT></P>
<BR><BR>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>
<BR>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>



<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="79" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:12pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="559" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:12pt;margin-bottom:0pt'><B><font SIZE=2>DOCUMENTS FILED AS PART OF THIS REPORT</font></B></p> </td> </tr>
    <tr>
        <td width="79" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td width="559" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font size=2>Renewal Annual Information Form of the Registrant for the year ended December 31, 2006</font></p> </td> </tr>
    <tr>
        <td width="79" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td width="559" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font size=2>The following audited financial statements of the Registrant, are exhibits to and form a part of this Annual Report:</font></p> </td> </tr>
    <tr>
        <td width="79" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:.4in;text-indent:0pt;text-align:justify;margin-top:12pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="559" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:.4in;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font size=2>Auditors&#146; Report on Financial Statements </font></p> </td> </tr>
    <tr>
        <td width="79" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:.4in;text-indent:0pt;text-align:justify;margin-top:12pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="559" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:.4in;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font size=2>Balance Sheets as of December 31, 2006 and 2005; </font></p> </td> </tr>
    <tr>
        <td width="79" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:.4in;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="559" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:.4in;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font size=2>Statements of Loss and Deficit for the years ended December&nbsp;31, 2006, 2005, 2004, and cumulative from inception on April 2, 1998 to December 31, 2005; </font></p> </td> </tr>
    <tr>
        <td width="79" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:.4in;text-indent:0pt;text-align:justify;margin-top:12pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="559" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:.4in;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font size=2>Statements of Cash Flows for the years ended December&nbsp;31, 2006, 2005, 2004, and cumulative from inception on April 2, 1998 to December 31, 2005; </font></p> </td> </tr>
    <tr>
        <td width="79" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:.4in;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="559" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:.4in;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font size=2>Notes to Financial Statements (which include reconciliation with United States generally accepted accounting principles). </font></p> </td> </tr>
    <tr>
        <td width="79" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td width="559" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font size=2>Management Discussion and Analysis of Financial Conditions and Results of Operations </font></p> </td> </tr>
    <tr>
        <td width="79" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:12pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="559" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:12pt;margin-bottom:0pt'><B><font SIZE=2>EXHIBITS</font></B></p> </td> </tr>
    <tr>
        <td width="79" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font SIZE=2>99.A</font></p> </td>
        <td width="559" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font size=2>Certifications by our Chief Executive Officer pursuant to Rule&nbsp;13a-14(a) of the Exchange Act, as adopted pursuant to Section&nbsp;302 of the Sarbanes-Oxley Act of 2002.</font></p> </td> </tr>
    <tr>
        <td width="79" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font SIZE=2>99.B</font></p> </td>
        <td width="559" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font size=2>Certifications by our Chief Financial Officer pursuant to Rule&nbsp;13a-14(a) of the Exchange Act, as adopted pursuant to Section&nbsp;302 of the Sarbanes-Oxley Act of 2002.</font></p> </td> </tr>
    <tr>
        <td width="79" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font SIZE=2>99.C</font></p> </td>
        <td width="559" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font size=2>Certificate of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</font></p> </td> </tr>
    <tr>
        <td width="79" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font SIZE=2>99.D</font></p> </td>
        <td width="559" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font size=2>Certificate of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</font></p> </td> </tr>
    <tr>
        <td width="79" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font SIZE=2>99.E</font></p> </td>
        <td width="559" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font size=2>Consent of Ernst &amp; Young LLP, Independent Accountants</font></p> </td> </tr>
    <tr>
        <td width="79" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font SIZE=2>99.F</font></p> </td>
        <td width="559" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font size=2>Code of Ethics for Chief Executive Officer, Chief Financial Officer and Controller</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:5pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P align =center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 9 - </FONT></P>
<BR><BR>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>
<BR>




</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>2
<FILENAME>ballot.jpg
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 ballot.jpg
M_]C_X``02D9)1@`!`0$!+`$L``#_VP!#``@&!@<&!0@'!P<)"0@*#!0-#`L+
M#!D2$P\4'1H?'AT:'!P@)"XG("(L(QP<*#<I+#`Q-#0T'R<Y/3@R/"XS-#+_
MVP!#`0D)"0P+#!@-#1@R(1PA,C(R,C(R,C(R,C(R,C(R,C(R,C(R,C(R,C(R
M,C(R,C(R,C(R,C(R,C(R,C(R,C(R,C+_P``1"``,``L#`2(``A$!`Q$!_\0`
M'P```04!`0$!`0$```````````$"`P0%!@<("0H+_\0`M1```@$#`P($`P4%
M!`0```%]`0(#``01!1(A,4$&$U%A!R)Q%#*!D:$((T*QP152T?`D,V)R@@D*
M%A<8&1HE)B<H*2HT-38W.#DZ0T1%1D=(24I35%565UA96F-D969G:&EJ<W1U
M=G=X>7J#A(6&AXB)BI*3E)66EYB9FJ*CI*6FIZBIJK*SM+6VM[BYNL+#Q,7&
MQ\C)RM+3U-76U]C9VN'BX^3EYN?HZ>KQ\O/T]?;W^/GZ_\0`'P$``P$!`0$!
M`0$!`0````````$"`P0%!@<("0H+_\0`M1$``@$"!`0#!`<%!`0``0)W``$"
M`Q$$!2$Q!A)!40=A<1,B,H$(%$*1H;'!"2,S4O`58G+1"A8D-.$E\1<8&1HF
M)R@I*C4V-S@Y.D-$149'2$E*4U155E=865IC9&5F9VAI:G-T=79W>'EZ@H.$
MA8:'B(F*DI.4E9:7F)F:HJ.DI::GJ*FJLK.TM;:WN+FZPL/$Q<;'R,G*TM/4
MU=;7V-G:XN/DY>;GZ.GJ\O/T]?;W^/GZ_]H`#`,!``(1`Q$`/P#U."#5-9UW
M7U'B/4K&"SO4MX8+6*V*A3;0R$DR0LQ):1N_I6KX5OKC4_!^B7]W()+FZL()
MI7``W.T:EC@<#DGI3+GPKI=S>W5V6U"&:Z=9)C;:G<P*[!50';'(`#M11D#M
?6G8V5OINGVUC:1^5;6T2PPQ@D[44`*,GG@`=:`/_V3\_
`
end
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>3
<FILENAME>ballotx.jpg
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 ballotx.jpg
M_]C_X``02D9)1@`!`0$!+`$L``#_VP!#``@&!@<&!0@'!P<)"0@*#!0-#`L+
M#!D2$P\4'1H?'AT:'!P@)"XG("(L(QP<*#<I+#`Q-#0T'R<Y/3@R/"XS-#+_
MVP!#`0D)"0P+#!@-#1@R(1PA,C(R,C(R,C(R,C(R,C(R,C(R,C(R,C(R,C(R
M,C(R,C(R,C(R,C(R,C(R,C(R,C(R,C+_P``1"``,``L#`2(``A$!`Q$!_\0`
M'P```04!`0$!`0$```````````$"`P0%!@<("0H+_\0`M1```@$#`P($`P4%
M!`0```%]`0(#``01!1(A,4$&$U%A!R)Q%#*!D:$((T*QP152T?`D,V)R@@D*
M%A<8&1HE)B<H*2HT-38W.#DZ0T1%1D=(24I35%565UA96F-D969G:&EJ<W1U
M=G=X>7J#A(6&AXB)BI*3E)66EYB9FJ*CI*6FIZBIJK*SM+6VM[BYNL+#Q,7&
MQ\C)RM+3U-76U]C9VN'BX^3EYN?HZ>KQ\O/T]?;W^/GZ_\0`'P$``P$!`0$!
M`0$!`0````````$"`P0%!@<("0H+_\0`M1$``@$"!`0#!`<%!`0``0)W``$"
M`Q$$!2$Q!A)!40=A<1,B,H$(%$*1H;'!"2,S4O`58G+1"A8D-.$E\1<8&1HF
M)R@I*C4V-S@Y.D-$149'2$E*4U155E=865IC9&5F9VAI:G-T=79W>'EZ@H.$
MA8:'B(F*DI.4E9:7F)F:HJ.DI::GJ*FJLK.TM;:WN+FZPL/$Q<;'R,G*TM/4
MU=;7V-G:XN/DY>;GZ.GJ\O/T]?;W^/GZ_]H`#`,!``(1`Q$`/P#<\6>.]4TK
MQOJ>F+JEW'"MQ%%"MO/;1QVJE+7,EP9+>1HXBT[8DR<D;=HQFO2_"=]<:GX-
MT._O)/,NKK3[>:9]H&YVC4L<#@9)/2H[GPEI5UJ%S?,VI0SW3AYC:ZI<P*[!
J%0$K'(JYVJHSCL*U+"QM],TZVL+./R[6UB2&%-Q.U%`"C)Y.`!UH`__9
`
end
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1
<SEQUENCE>4
<FILENAME>ex_1.htm
<DESCRIPTION>AIF FOR THE YEAR ENDED DECEMBER 31, 2006
<TEXT>
<HTML>
<HEAD>
<TITLE> </TITLE>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>


<!-- MARKER FORMAT-SHEET="Para Right" FSL="Default" -->
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>EXHIBIT 1</B> </FONT> </P>
<BR><BR>


<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:center;'><font size=5>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:center;'><font size=5>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><img src="img3.jpg"><br> </p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:center;'><font size=5>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:center;'><font size=5>&nbsp;</font></p>

<p style=' margin-bottom:6pt; margin-top:0pt; text-indent:0.5in;text-align:center;'><B><font SIZE=5>RENEWAL ANNUAL INFORMATION FORM</font></B></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:center;'><font size=5>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:center;'><b><font size=5>for the Year Ended December 31, 2006</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:center;'><font size=5>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:center;'><font size=5>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=5>March 2, 2007</font></b></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<BR><BR><BR><BR>

<!-- MARKER FORMAT-SHEET="Para Right" FSL="Default" -->
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 7A (1/46) </FONT></P>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>TABLE OF CONTENTS</font></B></p>
<BR>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN=4 align=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Page</FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=93% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR><B>CORPORATE STRUCTURE</B> </FONT></TD>
     <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>&nbsp;</B> </FONT></TD>
     <TD WIDTH=2% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR><B>4</B> </FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=4><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>GENERAL DEVELOPMENT OF THE BUSINESS</B> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>&nbsp;</B> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>4</B> </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;General</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Clinical Trials</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Manufacturing</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Financings and Other Distributions</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Shareholdings in Other Issuers</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Publications and Presentations</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Patents</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Recent Developments</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Future Developments</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=4><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>NARRATIVE DESCRIPTION OF THE BUSINESS</B> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>&nbsp;</B> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>13</B> </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Our Business</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>13</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Scientific Background</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>14</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;The Potential Cancer Product</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>15</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Repayable Grants</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Business Strategy</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>15</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Regulatory Requirements</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Market and Competition</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>17</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Product Marketing Strategy</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>17</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Third Party Advisor, Collaborators and Scientific Advisory Board</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>18</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Intellectual Property Policy</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>18</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Patent and Patent Application Summary</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Acquisition of all of the Shares of Oncolytics Biotech Inc by SYNSORB</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Employees</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Research and Development Expenditures</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Dividend Policy</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=4><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>MARKET FOR SECURITIES</B> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>&nbsp;</B> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>23</B> </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Market for Common Shares</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>23</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Description of Common Shares</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>23</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=4><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>DIRECTORS AND OFFICERS</B> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>&nbsp;</B> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>23</B> </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=4><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>AUDIT COMMITTEE MATTERS</B> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>&nbsp;</B> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>27</B> </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Mandate of the Audit Committee</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>27</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Composition of the Audit Committee</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>33</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=4><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>RISK FACTORS</B> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>&nbsp;</B> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>34</B> </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=4><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>ADDITIONAL INFORMATION</B> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>&nbsp;</B> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>41</B> </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Legal Proceedings</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>41</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Interest of Management and Others in Material Transactions</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>41</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Transfer Agent and Registrar</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>41</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
</TABLE>
<BR><BR>




<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 1; page: 1" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>
<BR><BR>



<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>-2- </FONT></P>
<BR><BR>





<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN=4 align=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Page</FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=93% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>&nbsp;</B> </FONT></TD>
     <TD WIDTH=2% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Material Contracts</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>41</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Interests of Experts</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>41</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;External Auditor Service Fees</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>41</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit Fees</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>42</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit-Related Fees</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>42</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax Fees</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>42</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All Other Fees</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>42</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Other Additional Information</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>42</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=4><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>GLOSSARY</B> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>&nbsp;</B> </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>44</B> </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
</TABLE>
<BR><BR>




<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><i><b><font size=2>This Annual Information Form contains forward-looking statements, including statements that may contain words such as &#147;anticipate,&#148; &#147;estimate,&#148; expect,&#148; &#147;project,&#148; &#147;intend,&#148; &#147;plan,&#148; &#147;believe&#148; and similar expressions and statements relating to matters that are not historical facts. Forward-looking statements, including our belief as to the potential of REOLYSIN<sup>&reg;</sup> as a cancer therapeutic and our expectations as to the success of our research and development and manufacturing programs in 2007 and beyond, future financial position, business strategy and plans for future operations, and statements that are not historical facts, involve known and unknown risks and uncertainties, which could cause our actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, among
others, the need for and availability of funds and resources to pursue research and development projects, the efficacy of REOLYSIN<sup>&reg;</sup> as a cancer treatment, the success and timely completion of clinical studies and trials, our ability to successfully commercialize REOLYSIN<sup>&reg;</sup>, uncertainties related to the research, development and manufacturing of pharmaceuticals, uncertainties related to competition, changes in technology, the regulatory process and general changes to the economic environment. Investors should consult our quarterly and annual filings with the Canadian and U.S. securities commissions for additional information on risks and uncertainties relating to the forward-looking statements. Forward-looking statements are based on assumptions, projections, estimates and expectations of management at the time such forward-looking statements are made, and such assumptions, projections, estimates and/or expectations could change or prove to be incorrect or
inaccurate. Investors are cautioned against placing undue reliance on forward-looking statements. We do not undertake to update these forward-looking statements.</font></b></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>CORPORATE STRUCTURE</font></B></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Oncolytics Biotech Inc. was incorporated pursuant to the provisions of the ABCA on April 2, 1998 as 779738 Alberta Ltd. On April 8, 1998, we amended our articles and changed our name to Oncolytics Biotech Inc. On July 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 &#150; 2<sup>nd</sup> Street S.W., Calgary, Alberta T2P 4K7.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>GENERAL DEVELOPMENT OF THE BUSINESS</font></B></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>General</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>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 or 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.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Our technologies are based primarily on discoveries in the Department of Microbiology and Infectious Diseases at the University of Calgary in the 1990s. Oncolytics Biotech Inc. 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.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>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. See </font><i><font size=2>&#147;Narrative Description of the Business &#150; Our Business; Scientific Background.&#148;</font></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>We are also assessing the potential opportunities for product candidates resulting from issued patents received for Ras-targeted adenovirus and herpes virus. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Para Right" FSL="Default" -->
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 7A (4/46)  </FONT></P>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<BR>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>
<BR>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-5-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Clinical Trials</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>On December 22, 2006, we reported that we had received a letter of approval from the U.K. Medicines and Healthcare products Regulatory Agency (&#147;MHRA&#148;) for our Clinical Trial Application to begin a clinical trial using intravenous administration of REOLYSIN<sup>&reg;</sup> in combination with paclitaxel and carboplatin in patients with advanced cancers including melanoma, lung, and ovarian. The combination of paclitaxel and carboplatin chemotherapy is used in cancer patients with ovarian and lung cancers, and is also used widely in the treatment of many other types of cancer.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>In studies conducted by the U.S. National Cancer Institute (&#147;NCI&#148;), the combination of REOLYSIN<sup>&reg;</sup> and paclitaxel was uniformly synergistic against six non-small cell lung cancer cell lines examined, including cell lines resistant to paclitaxel or REOLYSIN<sup>&reg;</sup>. Preclinical studies conducted at Cornell University also found that REOLYSIN<sup>&reg;</sup> in combination with platinum drugs enhanced the cytotoxicity of the chemotherapeutic agents.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>This trial has two components. The first is an open-label, dose-escalating, non-randomized study of REOLYSIN<sup>&reg;</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>&reg;</sup> intravenously. A maximum of three cohorts will be enrolled in the REOLYSIN<sup>&reg;</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>&reg;</sup> in combination with standard dosages of paclitaxel and carboplatin. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Eligible patients include those who have been diagnosed with advanced or metastatic solid tumours such as melanoma, lung and ovarian 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 (&#147;MTD&#148;), dose limiting toxicity (&#147;DLT&#148;), recommended dose and dosing schedule and safety profile of REOLYSIN<sup>&reg;</sup> when administered in combination with carboplatin and paclitaxel. 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.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>On December 22, 2006, we commenced patient enrolment in our U.K. Phase II clinical trial to evaluate the anti-tumour effects of direct injection of REOLYSIN<sup>&reg;</sup> in combination with low-dose radiation in patients with advanced cancers. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>On November 9, 2006, we reported additional clinical results from our first systemic administration study. Results of our UK Phase I systemic administration clinical trial investigating the use of REOLYSIN<sup>&reg;</sup> to treat patients with advanced cancers indicated that REOLYSIN<sup>&reg;</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>11</sup> TCID<sub>50</sub>. A maximum tolerated dose was not reached and the treatment appears to have been well tolerated by the patients. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Toxicities possibly related to REOLYSIN<sup>&reg;</sup> treatment in this trial have generally been mild (grade 1 or 2) and have included chills, fever, headache, cough, runny nose, sore throat and fatigue. Transient grade 3 toxicities include lymphopenia, neutropenia and troponin I. These symptoms were more frequently observed from day two of treatment and usually lasted less than six hours.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Of the patients assessed, anti-tumour activity was noted in seven patients. Patients were assessed with CT scans, and where possible tumour marker assessment, and histopathology of tumour biopsies. 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 </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>
<BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-6-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>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 (reduction from 2.5 to 1.9 cm). A patient with pancreatic cancer and a patient with lung cancer had stable disease for four months. A patient with endometrial cancer had stable disease for five months</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>On August 23, 2006, we reported that we had completed patient enrolment in our Phase I U.S. clinical trial investigating the systemic delivery of REOLYSIN<sup>&reg;</sup> to treat patients with advanced cancers. A total of 18 patients were treated in the Phase I trial with REOLYSIN<sup>&reg;</sup> at escalating dosages of 1x10<sup>8</sup>, 3x10<sup>8</sup>, 1x10<sup>9</sup>, 3x10<sup>9</sup>, 1x10<sup>10</sup> or 3x10<sup>10</sup> TCID<sub>50</sub>. A maximum tolerated dose was not reached and the treatment appears to have been well tolerated by the patients. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>On July 18, 2006, we reported that we had received a letter of approval from the MHRA for our Clinical Trial Application to begin a Phase II clinical trial to evaluate the anti-tumour effects of intratumoural administration of REOLYSIN<sup>&reg;</sup> in combination with low-dose radiation in patients with advanced cancers. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>The trial is an open-label, single-arm, multi-centre Phase II study of REOLYSIN<sup>&reg;</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>&reg;</sup> at 1x10<sup>10</sup> TCID<sub>50</sub> with a constant localized radiation dose of 20 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.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>The primary objective of this trial is to assess the anti-tumour activity of the combination of REOLYSIN<sup>&reg;</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>&reg;</sup> in patients with advanced cancers who are receiving radiation treatment.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>On July 11, 2006, we began patient enrolment in our clinical trial to investigate the use of REOLYSIN<sup>&reg;</sup> for patients with recurrent malignant gliomas in the U.S. This clinical trial is an open-label dose escalation Phase I/II trial in which a single dose of REOLYSIN<sup>&reg;</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>&reg;</sup> is administered or infused into the tumour mass and surrounding tissue using a pump. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>The primary objective of the study is to determine the MTD, DLT and safety profile of REOLYSIN<sup>&reg;</sup>. Secondary objectives include the evaluation of viral replication, immune response to the virus and any evidence of anti-tumour activity.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>On July 10, 2006, we commenced patient enrolment in our Phase Ib U.K. clinical trial investigating REOLYSIN<sup>&reg;</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>&reg;</sup> at 1x10<sup>10</sup> TCID<sub>50</sub> with a constant radiation dose of 36 Gy in 12 fractions.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>The primary objective of the Phase Ib trial is to determine the MTD, DLT, and safety profile of REOLYSIN<sup>&reg;</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 </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>
<BR>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-7-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>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.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>On June 20, 2006, we reported that we had completed patient enrolment in our Phase Ia U.K. clinical trial investigating the use of REOLYSIN<sup>&reg;</sup> in combination with radiation to treat patients with advanced cancers. A total of 11 patients were treated in the Phase Ia trial with two intratumoural treatments of REOLYSIN<sup>&reg;</sup> at dosages of 1x10<sup>8</sup>, 1x10<sup>9</sup>, or 1x10<sup>10</sup> TCID<sub>50</sub> with a constant localized radiation dose of 20 Gy in five fractions. A maximum tolerated dose was not reached and the combination treatment appears to have been well tolerated by the patients.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>On June 5, 2006, positive interim and final results for two Phase I clinical trials were reported at poster sessions at the American Society of Clinical Oncology (&#147;ASCO&#148;) Annual Meeting in Atlanta, Georgia. The data covered interim results of our Phase I systemic administration trial being conducted in the U.K. and final results of our Phase I recurrent malignant glioma trial conducted in Canada. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Interim results of our UK Phase I systemic administration clinical trial investigating the use of REOLYSIN<sup>&reg;</sup> to treat patients with advanced cancers indicated that REOLYSIN<sup>&reg;</sup> can be delivered systemically to various tumour types and cause virus-mediated tumour responses. A total of 30 patients had been treated in the escalating frequency and dosage portion of the trial to a maximum daily dose of 1x10<sup>11</sup> TCID<sub>50</sub>. A maximum tolerated dose was not reached and the treatment appears to have been well tolerated by the patients. Toxicities possibly related to the REOLYSIN<sup>&reg;</sup> treatment in this trial were generally mild (grade 1 or 2) and included chills, fever, headache, cough, runny nose, sore throat and fatigue. Transient grade 3 toxicities included lymphopenia, neutropenia and troponin I. These symptoms were more frequently observed from day two of
treatment and usually lasted less than six hours.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Of the cohorts whose patients had completed treatment (seven), anti-tumour activity was noted in patients with colorectal, prostate, pancreatic, bladder, and lung cancer. Patients were assessed with CTR scans, and where possible tumour marker assessment, and histopathology of tumour biopsies. Two patients with colorectal cancer had tumour stabilization (one for three months, the other classified as stable disease at six months) and had CEA tumour marker reduction of 27% and 60% respectively. One patient with metastatic prostate cancer had stable disease at 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 at four months and had a minor tumour response in a metastatic lesion in a lymph node (reduction from 2.5 to 1.9 cm). A
patient with pancreatic cancer and a patient with lung cancer had stable disease at four months.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>As well, final results of our Canadian Phase I trial for recurrent malignant glioma indicated that intratumoural administration of REOLYSIN<sup>&reg;</sup> was well tolerated by the patients and a maximum tolerated dose was not reached. A total of 12 patients were treated with a single, intratumoural injection of REOLYSIN<sup>&reg;</sup> at dosages of 1x10<sup>7</sup>, 1x10<sup>8</sup>, and 1x10<sup>9</sup> TCID<sub>50</sub> in a delivery volume of 0.9 ml. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Toxicities possibly related to the REOLYSIN<sup>&reg;</sup> treatment in this trial were generally mild (grade 1 and 2) and included fever, headache and neutropenia. A transient grade 3 elevation in GGT was noted. Three patients lived longer than one year and one of these patients was still alive approximately 45 months post-treatment.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>On April 4, 2006, we reported interim results of our Phase I combination REOLYSIN<sup>&reg;</sup>/radiation clinical trial. The interim results indicated that the combination of intratumoural REOLYSIN<sup>&reg;</sup> and radiation was well tolerated and that both local clinical responses and early indications of systemic effects were observed. Preliminary observations in the first seven patients showed that the combination of intratumoural REOLYSIN<sup>&reg;</sup> and radiation have been well-tolerated. Most toxicities have been mild, generally grade 1 and 2, and include fever, sweating and skin erythema. One patient in the second cohort developed grade 3 fatigue and grade 2 flu-like symptoms and could not receive the second REOLYSIN<sup>&reg;</sup> </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-8-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>injection. There has been no evidence that the REOLYSIN<sup>&reg;</sup> injections exacerbated the acute reactions expected from the radiation. There was also no evidence of viral shedding in the blood, urine, stool or sputum on day eight post-REOLYSIN<sup>&reg;</sup> injection. Interim analysis also showed evidence of local responses and an indication of systemic effects. Amongst the first five patients that completed treatment, three patients had partial tumour responses. At the time of these interim results, there was one case of progressive disease at one month, one case of stable disease at one month, two cases of partial responses at one, two and three months and one case of stable disease at one and two months, which became a pathological partial response at three months. CT scans from the treated lymph node tumour in the first patient in the trial clearly show the partial response, which as of date
of the interim results, had lasted for over eight months. A metastatic tumour in this patient that was outside the radiation field also showed a partial response.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>On January 18, 2006, we reported that the Cancer Therapy Evaluation Program (&#147;CTEP&#148;), part of the U.S. NCI, had issued a solicitation for Letters of Intent with respect to the conduct of two human clinical trials using REOLYSIN<sup>&reg;</sup>. The first trial is a Phase II study of REOLYSIN<sup>&reg;</sup> administered systemically in patients with melanoma and the second is a Phase I/II study of REOLYSIN<sup>&reg;</sup> co-administered both systemically and intraperitoneally in patients with ovarian cancer. The NCI initially approved REOLYSIN<sup>&reg;</sup> for collaborative development after an analysis of preclinical, GLP toxicology and clinical data. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>On January 17, 2006, we reported that the six-month follow up period had concluded for patients in our Phase I Canadian recurrent malignant glioma clinical trial. As reported in October 2005, intratumoural administration of reovirus was well tolerated by the patients and a maximum tolerated dose was not reached. The study examined the use of a single, intratumoural injection of REOLYSIN<sup>&reg;</sup>, delivered using imaging-guided surgery, in patients with malignant gliomas that had recurred despite other treatments, including surgery and radiation therapy. A total of 12 patients were treated in the study at dosages of 10<sup>7</sup>, 10<sup>8</sup>, and 10<sup>9</sup> TCID<sub>50</sub> in a delivery volume of 0.9 ml.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>On November 14, 2005, we reported results in conjunction with a poster presentation at the AACR-NCI-EORTC conference in the U.S. by our principal investigator for our Phase I systemic delivery clinical trial in the U.K. We reported on 22 patients who made up seven of nine potential cohorts with each cohort receiving escalating dose levels of REOLSYIN<sup>&reg;</sup>. Our principal investigator reported that REOLYSIN<sup>&reg;</sup> is well tolerated when administered intravenously with minimal toxicity observed and that reovirus replication in tumours has been identified with evidence of tumor necrosis. The principal investigator also reported that there have been encouraging hints of activity in prostate and colorectal cancer. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>On October 19, 2005, we announced that we had ended patient treatment in our Canadian Phase I clinical trial investigating the use of REOLYSIN<sup>&reg;</sup> to treat patients with recurrent malignant glioma. A total of twelve patients were treated in the study at dosages of 10<sup>7</sup>, 10<sup>8</sup>, and 10<sup>9</sup> TCID<sub>50</sub>. A maximum tolerated dose was not reached over this dosage range and REOLYSIN<sup>&reg;</sup> appears to have been well tolerated by the patients. Determination of the safety of REOLYSIN<sup>&reg;</sup> was the primary purpose of this Canadian Phase I study. The study examined the use of a single, intratumoural injection of REOLYSIN<sup>&reg;</sup>, delivered using imaging-guided surgery, in patients with malignant gliomas that had recurred despite other treatments, including surgery and radiation therapy. After treatment with REOLYSIN<sup>&reg;</sup>, the Phase I
patients were monitored and evaluated for safety for a period of six months. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>
On April 7, 2005,  we announced  that we received  clearance  from the US FDA to
begin  a Phase  I  clinical  trial  to  investigate  the  systemic  delivery  of
REOLYSIN<sup>&reg;</sup> as a treatment for patients with advanced or metastatic
solid tumours.  This clinical trial is an  open-label,  dose-escalation  Phase I
study  in  which a  single  dose of  REOLYSIN<sup>&reg;</sup>  was  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  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-9-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>
curative  standard  therapy  exists.  The primary  objective of the study was to
determine the MTD, DLT and safety profile of REOLYSIN<sup>&reg;</sup>. Secondary
objectives included the evaluation of viral replication,  immune response to the
virus and any evidence of  anti-tumour  activity.  The  enrolment in this study,
which  commenced  on September  28, 2005,  was expected to be up to 36 evaluable
patients and depended in part upon the number of cohorts tested.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>On February 28, 2005, we announced that we had received clearance from the US FDA to begin a Phase I/II clinical trial to investigate the use of REOLYSIN<sup>&reg;</sup> to treat patients with recurrent malignant gliomas. This clinical trial is an open-label dose escalation Phase I/II study in which a single dose of REOLYSIN<sup>&reg;</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>&reg;</sup> is administered or infused into the tumour mass and surrounding tissue using a pump. The primary objective of the study is to determine the MTD, DLT and safety profile of REOLYSIN<sup>&reg;</sup>. Secondary objectives include the evaluation of viral replication, immune response to the virus and any evidence of antitumour
activity. The enrolment in this study is expected to be up to 30 evaluable patients in the dose escalation phase with up to an additional 14 patients added at the MTD.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>On February 18, 2005, we announced that we received a letter of approval from the U.K. MHRA for our Clinical Trial Application (&#147;CTA&#148;) to begin a Phase I clinical trial to evaluate the feasibility, safety and anti-tumour effects of intratumoural administration of REOLYSIN<sup>&reg;</sup> in combination with radiation in patients with advanced cancers. The trial is a Phase I open-label, dose-escalation study of REOLYSIN<sup>&reg;</sup> combined with two different radiation dosages/schedules. The enrolment in this study is expected to be approximately 30 evaluable patients and will depend upon the number of dose levels tested. Up to an additional 15 patients are expected to be treated at the MTD. The primary objective of the study is to determine the MTD, DLT, and safety profile of REOLYSIN<sup>&reg;</sup> when administered intratumourally to patients receiving radiation treatment. A secondary
objective is to examine any evidence of anti-tumour activity. Patients 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 will be eligible. Patient enrolment commenced on July 26, 2005.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>On February 27, 2004, we announced that we received approval to commence a Phase I clinical trial to investigate the systemic delivery of REOLYSIN<sup>&reg;</sup> as a treatment for patients with advanced or metastatic solid tumours from the MHRA in the United Kingdom. The principal investigator for the study is Dr.&nbsp;J. de Bono of the Royal Marsden Hospital in London, England. This clinical trial is the first to examine the systemic delivery of REOLYSIN<sup>&reg;</sup>, which is expected to result in delivery of the virus throughout the body to both the primary tumour and metastatic disease sites. The trial is an open-label, dose escalation Phase I study in which REOLYSIN<sup>&reg;</sup> is administered intravenously to patients diagnosed with 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 MTD, DLT and safety profile of REOLYSIN<sup>&reg;</sup>. Secondary objectives include the evaluation of viral replication, immune response to the virus and any evidence of anti-tumour activity. The enrolment in this study is expected to be up to 40 evaluable patients and will depend upon the number of dose levels tested.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>
On February 27, 2004, we announced  the final update on our  technical  clinical
study for T2 prostate cancer. On March 23, 2003, we previously  reported results
from an interim  assessment of this clinical trial. These results were presented
by  Dr.&nbsp;Don   Morris,   from  the  Alberta  Cancer  Board,   the  principal
investigator for the trial.  Dr.&nbsp;Morris reported that there was evidence of
viral activity in five of six patients and there were no safety  concerns,  from
either a clinical or histopathological perspective, in all six patients reported
upon.  The  data in four of the six  patients,  showed  clear  histopathological
evidence of apoptotic  tumour cell death (one measure of viral  activity).  In a
fifth patient, the PSA level dropped by 53% and the prostate gland shrunk by 67%
from the  period of time prior to  treatment  to the time of  surgical  removal.
There  was no  evidence  of viral  activity  in the  sixth  patient.  In all six
patients, there was </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-10-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>
no  histopathological  evidence of any viral effect on healthy  prostate tissue.
This  trial,  which was  approved  by Health  Canada on October  11,  2001,  was
primarily  a technical  study  designed  to allow us to measure  overall  tumour
response  and examine  changes or effects  inside the tumour and in  surrounding
normal tissue, as part of a human clinical trial. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Manufacturing</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>We engage a toll manufacturer, Cobra Biomanufacturing Plc for the production of reovirus for human clinical trials and animal toxicology studies. The product is produced in compliance with current regulatory requirements and the manufacturer will confirm biosafety testing. See </font><i><font size=2>&#147;Risk Factors &#150; Manufacturing.&#148;</font></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Financings and Other Distributions</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Since inception we have raised net cash proceeds of $84,139,357 through public offerings, private placements and the exercise of warrants and options. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Shareholdings in Other Issuers</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>During 2006, we sold no common shares of BCY LifeSciences Inc. (2005 &#150; 120,000; 2004 &#150; 697,945) receiving no cash proceeds (2005 &#150; $7,965; 2004 &#150; $133,609) with no reported gain on sale of shares in 2006 (2005 &#150; $765; 2004 &#150; $34,185). As at December 31, 2006, our remaining ownership in BCY LifeSciences Inc. was 80,000 common shares. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Publications and Presentations</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>During 2006, in conjunction with our various collaborators, we reported the results of a number of research collaborations. A poster at the British Society of Gene Therapy 3rd annual conference in London U.K was presented. Our investigator concluded that immune interventions which prolong local viral replication, and/or enhance levels of tumour specific T cells, should have significant therapeutic impacts both against the local, injected tumour and against systemic metastatic disease not accessible to direct viral injection.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>As well, a poster by Dr.&nbsp;E. Anders Kolb was presented at the AACR annual meeting in Washington D.C. The investigators tested reovirus against various pediatric sarcoma cell lines in vitro and in vivo. In all tumour lines evaluated, the reovirus exhibited significant antitumour activity. The investigators concluded that REOLYSIN<sup>&reg;</sup> demonstrates excellent anti-tumor activity in vitro and in vivo in childhood sarcoma cell lines, and that these promising results suggest that a clinical trial of systemic reovirus in pediatric solid tumours is warranted. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Finally, in the fourth quarter of 2006, Dr.&nbsp;Shizuko Sei of SAIC-Frederick, Inc., prime contractor to the U.S. NCI at Frederick presented a poster at the 18th EORTC-NCI-AACR symposium on Molecular Targets and Cancer Therapeutics. 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 lung cancer cell lines sensitive to anti-cancer drugs. Of particular interest to the researchers, 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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-11-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>On November 15, 2005, a poster entitled &#147;Reovirus enhances radiation cytotoxicity </font><i><font size=2>in vitro</font></i><font size=2> and </font><i><font size=2>in vivo</font></i><font size=2>&#148; was presented by Dr.&nbsp;Kevin J. Harrington of the Targeted Therapy Laboratory, The Institute of Cancer Research, Cancer Research UK Centre for Cell and Molecular Biology, UK. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>On April 20, 2005, a poster by Errington et al. entitled &#147;Potential role for reovirus in the treatment of melanoma: Targeted killing and immune stimulation&#148; was presented at the 96th Annual Meeting of the American Association for Cancer Research in Anaheim, CA. USA. This research supports the use of reovirus as a targeted therapy for melanomas. The research also showed that activation of certain classes of immune cells by the reovirus may enable additional anti-tumour activity beyond that of tumour cell death caused directly by the reovirus.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>On December 15, 2004, &#147;Efficacy and Safety Evaluation of Human Reovirus Type 3 in Immunocompetent Animals&#148; was published in Clinical Cancer Research Vol. 10. This publication concluded that the data showed the efficacy and safety of reovirus when it is used in the treatment of gliomas in immunocompetent hosts. As well, inoculation of reovirus into the brain of nonhuman primates did not produce significant toxicities.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>On September 30, 2004, a poster was presented at the 16th EORTC-NCI-AACR 2004 Symposium on &#145;Molecular Targets and Cancer Therapeutics&#146; in Geneva, Switzerland entitled &#147;The oncolytic reovirus, Reolysin, augments the anticancer effects of cytotoxic agents in vitro against the ras-mutated human colon cancer cell line HCT 116.&#148; The researchers were able to show that REOLYSIN<sup>&reg;</sup> enhances the cytotoxicity of chemotherapeutic agents including 5-FU, gemcitabine, doxorubicin and cisplatin.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Patents</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We secured four U.S. patents and two Canadian patents in 2006. These patents enhance and expand intellectual property coverage in several areas, including manufacturing, methods of identifying patients who may respond well to reovirus treatment, using additional molecular mechanisms that can lead to reovirus susceptibility in cancer cells, and manipulation of the immune system that may enhance the effectiveness of REOLYSIN<sup>&reg;</sup> treatment. Currently, our patent portfolio includes 18 U.S. patents, five Canadian patents and three European patents. In addition, we have a number of other patents under application, both in the United States, and through filings under the Patent Cooperation Treaty. See &#147;</font><i><font size=2>Narrative Description of the Business &#150; Patent and Patent Application Summary.</font></i><font size=2>&#148;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Recent Developments</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><I><B><font SIZE=2>U.K. REOLYSIN</font></B></I><font size=2><sup>&reg;</sup></font><i><b><font size=2> in Combination with Docetaxel </font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>On January 3, 2007, we received a letter of approval from the U.K. MHRA for our CTA to begin a clinical trial using intravenous administration of REOLYSIN<sup>&reg;</sup> in combination with docetaxel (Taxotere<sup>&reg;</sup>) in patients with advanced cancers including bladder, prostate, lung and upper gastro-intestinal. The principal investigator is Professor Hardev Pandha of The Royal Surrey Hospital, U.K. Docetaxel is used in patients with lung, breast and prostate cancers, and is also used widely in the treatment of many other types of cancers.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The trial has two components. The first is an open-label, dose-escalating, non-randomized study of REOLYSIN<sup>&reg;</sup> given intravenously with docetaxel every three weeks. A standard dosage of docetaxel will be delivered with escalating dosages of REOLYSIN<sup>&reg;</sup> intravenously. A maximum of three cohorts will be enrolled in the REOLYSIN<sup>&reg;</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>&reg;</sup> in combination with a standard dosage of docetaxel.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-12-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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 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>&reg;</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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><I><B><font SIZE=2>U.K. REOLYSIN</font></B></I><font size=2><sup>&reg;</sup></font><i><b><font size=2> in Combination with Gemcitabine</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>On January 3, 2007, we received a letter of approval from the U.K. MHRA for our CTA to begin a clinical trial using intravenous administration of REOLYSIN<sup>&reg;</sup> in combination with gemcitabine (Gemzar<sup>&reg;</sup>) in patients with advanced cancers including pancreatic, lung and ovarian. The principal investigators are Dr.&nbsp;Johann de Bono of The Royal Marsden NHS Foundation Trust and The Institute of Cancer Research, London and Professor Jeff Evans of the University of Glasgow and the Beatson Oncology Centre in Glasgow, Scotland. Gemcitabine is used in patients with lung, pancreatic and ovarian cancers and is also used widely in the treatment of many other types of cancers. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>This trial has two components. The first is an open-label, dose-escalating, non-randomized study of REOLYSIN<sup>&reg;</sup> given intravenously with gemcitabine every three weeks. A standard dosage of gemcitabine will be delivered with escalating dosages of REOLYSIN<sup>&reg;</sup> intravenously. A maximum of three cohorts will be enrolled in the REOLYSIN<sup>&reg;</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>&reg;</sup> in combination with a standard dosage of gemcitabine.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Eligible patients include those who have been diagnosed with advanced or metastatic solid tumours including pancreatic, lung and ovarian cancers that are refractory 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>&reg;</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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><i><b><font size=2>Financing Activity</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>On February 22, 2007, we issued 4,000,000 units at a price of $3.00 per unit for net proceeds of approximately $10,590,000. Each whole common share purchase warrant shall entitle the holder thereof to acquire one common share upon payment of $3.50 expiring on February 22, 2010. As well, we granted an over-allotment option of 600,000 units which can be exercised, in whole or in part, prior to March 24, 2007 for additional cash proceeds of $1,800,000. The net proceeds from this offering will be used for our clinical trial program, manufacturing activities in support of the clinical trial program and for general corporate purposes. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Future Developments</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>We anticipate that many important activities related to our clinical trial program, our product manufacturing and our intellectual property development and protection will occur in 2007 and beyond. We presently intend to continue to focus our clinical trial program on the evaluation of the effectiveness of REOLYSIN<sup>&reg;</sup> as a potential treatment for various cancer indications. This will include continuing our clinical trial program presently underway, expanding into other areas including utilizing our association with the NCI to broaden our clinical trial program. We also intend to expand human clinical trials to determine the safety and effectiveness of systemic delivery of REOLYSIN<sup>&reg;</sup> as a cancer therapeutic. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-13-</font></p>
<BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Various forms of cancer are being assessed and we intend to evaluate and select one or more forms of cancer that appear to provide the best opportunity for timely approval. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>We plan to continue our focus on establishing strategic relationships with potential partners who can provide expertise in marketing and distribution, as well as assistance with research and development. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Except for historical information, this review contains statements which by their nature are forward-looking and which involve known and unknown risks, delays, uncertainties and other factors not under our control. Any of these factors may cause our actual results, performance or achievement to be materially different from the results, performance or expectations implied by these forward-looking statements. These factors include, but are not limited to, results of current or pending clinical trials, actions by regulatory authorities such as the FDA in the United States, the HPB in Canada, or MHRA in the UK as well as those factors detailed in our regulatory filings.</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NARRATIVE DESCRIPTION OF THE BUSINESS</font></B></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Our Business </font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Our potential product for human use, REOLYSIN<sup>&reg;</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 30% of all human tumours directly, but considering its central role in signal transduction, activation of the Ras pathway has been shown to play a role in approximately two-thirds of all tumours.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>The functionality of the product 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, PKR. 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.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>The following schematic illustrates the molecular basis of how the reovirus kills cancer cells.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-14-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><img src="img2.gif"><br> </p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Scientific Background</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>The Ras protein is a key regulator of cell growth and differentiation. It transmits signals from the cell&#146;s surface, via growth factor receptors, to downstream elements, which are in turn relayed to the nucleus. This transmission of signals from the cell surface to the cell&#146;s nucleus is collectively referred to as &#147;signal transduction.&#148;  The transmission of these signals results in cell growth, division, and in some instances cellular differentiation. In normal cells, cell growth occurs only in the presence of factors stimulating the cells to grow. Mutations in Ras itself, or any of the elements along the Ras pathway, often lead to activation of the pathway in the absence of the appropriate growth stimuli, leading to the uncontrolled growth of these cells and ultimately to the development of a cancerous state. In fact, approximately 30% of all cancers are known to be due to mutations in
Ras itself. The frequency of these Ras mutations, as well as their etiology in a given tumour is however, tissue specific. Activating mutations in Ras are found in many types of human malignancies but are highly represented in pancreatic (90%), sporadic colorectal (50%), lung carcinomas (40%), and myeloid leukemia (30%). Because Ras is a regulator of key mitogenic signals, aberrant function of upstream elements such as receptor tyrosine kinases (RTKs) can also result in Ras activation in the absence of mutations in Ras itself. Indeed, over-expression of these RTKs such as HER2/neu/ErbB2 or the epidermal growth factor receptor is common in breast cancer (25-30%), and over-expression of the platelet-derived growth factor receptor (&#147;PDGFR&#148;) is common in glioblastomas and gliomas, all of which are tumour types in which Ras mutations are relatively rare. Although activating mutations of Ras itself are thought to occur in only about 30% of all tumours it is expected that
approximately two-thirds of all tumours have activated Ras signaling pathways as a result of mutations in genes that lie upstream of Ras. With this in mind, Ras becomes a significant therapeutic target in oncology.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>All available scientific evidence developed or reviewed by us to date supports the premise that the reovirus only actively infects and replicates in cells with an activated Ras pathway. This naturally occurring virus is believed to cause only mild infections of the respiratory and gastrointestinal tract and in general, reovirus infections in humans are asymptomatic and usually sub-clinical. Research has indicated this virus replicates in, and therefore kills, only cancer cells (i.e. cancer cells with an activated Ras pathway), but does not replicate in normal cells. It has been demonstrated that reovirus replication is restricted in &#147;normal&#148; cells due to the activation of the double stranded RNA-activated protein kinase (&#147;PKR&#148;). PKR is a crucial element in protecting cells from reovirus infection and is capable of blocking viral protein translation. Activated Ras (or an activated
element of the Ras pathway) prevents PKR </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>
<BR>



<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-15-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>activation, and thus allows viral replication to ensue only in this subset of cancer cells. To prove that reovirus could be used as a potential cancer therapeutic, a number of animal models were developed. Experiments using this virus to treat mouse tumours, expanded animal models as well as human brain, breast, and prostate tumours implanted in immuno-compromised mice have yielded promising results. In animals where tumour regression was noted, a single injection of reovirus is often enough to cause complete tumour regression. More importantly, it was demonstrated that this treatment is effective in causing tumour regression in immune competent animals. We believe that the nature of this virus, combined with its selective replication makes it an attractive candidate as a cancer therapy.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>We also believe that this research may have broad utility in the treatment of tumours with an activated Ras pathway as well as a potential use as an adjuvant therapy following surgical tumour resection or as an adjuvant therapy to conventional chemotherapeutic or radiation therapies.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>The Potential Cancer Product</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Cancer is a group of related diseases characterized by the aberrant or uncontrolled growth of cells and the spread of these cells to other sites in the body. These cancer cells eventually accumulate and form tumours that can disrupt and impinge on normal tissue and organ function. In many instances, cells from these tumours can break away from the original tumour and travel through the body to form new tumours through a process referred to as metastasis. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Our cancer product is a potential therapeutic for tumours possessing an activated Ras pathway. In tumour cells with this type of activation, the virus is cytotoxic but may have no effect on the surrounding normal tissue. Activating mutations of Ras are believed to account for approximately 30% of all human tumours directly. It is also possible to activate Ras through mutation of proteins that control its activity rather than through direct mutations of Ras itself. This suggests that approximately two thirds of tumours may respond to this treatment.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Repayable Grants</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Pursuant to the Technology Commercialization Agreement with the Alberta Heritage Foundation, we received $150,000 to offset the REOLYSIN<sup>&reg;</sup> development costs. Under the Technology Commercialization Agreement, we agreed to repay the amount of the grant from our gross sales. We agreed to repay the Alberta Heritage Foundation in annual installments in an amount equal to the lesser of: (a) 5% of gross sales; or (b) $15,000 per annum until the entire grant has been paid in full.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>In accordance with the Clinical Trial Agreement with the ACB, we received funding and overhead support from the ACB to offset the REOLYSIN<sup>&reg;</sup> clinical trial expenditures. Under the Clinical Trial Agreement, we agreed to repay the amount of the grant together with a royalty, to a combined maximum amount of $400,000 plus an overhead repayment of $100,000, upon sales of product. We agreed to repay the ACB in annual installments from the date of commencement of sales in an amount equal to the lesser of: (a) 5% of gross sales of REOLYSIN<sup>&reg;</sup>; or (b) $100,000 per annum.</font><i><font size=2> </font></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Business Strategy </font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Our business strategy is to develop and market REOLYSIN<sup>&reg;</sup> in an effective and timely manner, and access additional technologies at a time and in a manner that we believe is best for our development. We intend to achieve our business strategy by focusing on these key areas:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Develop REOLYSIN<sup>&reg;</sup> by initiating toxicology and manufacturing programs and progress the product through a clinical setting to assess its safety and efficacy in human subjects.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-16-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Establish collaborations with experts to assist us with scientific and clinical developments of this new potential pharmaceutical product.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Implement strategic alliances with selected pharmaceutical and biotechnology companies and selected laboratories, at a time and in a manner where such alliances may complement and expand our research and development efforts on the product and provide sales and marketing capabilities.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Utilize our broadening patent base and collaborator network as a mechanism to meet our strategic objectives.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Develop relationships with companies that could be instrumental in assisting us to access other innovative therapeutics.</font></p> </td> </tr></table>


<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Our business strategy is based on attaining a number of commercial objectives, which, in turn, are supported by a number of product development goals. Our new product development presently being conducted is primarily of a research and development nature. In the context of this Annual Information Form, statements of our &#147;belief&#148; are based primarily upon our results derived to date from our research and development program with animals, and early stage human trials, and upon which we believe that 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 trials, whether a new therapeutic will ultimately prove to be safe and effective in humans. There are no assurances that the particular result expected by us will occur. See </font><i><font size=2>&#147;Risk Factors.&#148;</font></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>At this time we do not intend to become a fully integrated pharmaceutical company with substantial in-house research and development, marketing and distribution or manufacturing capabilities. We are pursuing a strategy of establishing relationships with larger companies as strategic partners. We intend to partner or joint venture with larger pharmaceutical companies that have existing and relevant marketing capability for our products. It is anticipated that future clinical development into large international or pivotal trials would generally occur in conjunction with a strategic partner or partners, who would contribute expertise and financial assistance. In exchange for certain product rights and commitments to market our products, the strategic partners would be expected to share in gross proceeds from the sale of our product or products. The proceeds generated from partnering or joint venturing
projects are expected to be distributed on the basis of relative risk taken and resources contributed by each party to the partnership or joint venture.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Regulatory Requirements</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>The development of new pharmaceuticals is strongly influenced by a country&#146;s regulatory environment. The drug approval process in Canada is regulated by Health Canada. The primary regulatory body in the United States is the FDA and in the UK is the MHRA. Similar processes are conducted in other countries by equivalent regulatory bodies. Regulations in each jurisdiction require the licensing of manufacturing facilities and mandate strict research and product testing standards. Companies must establish the safety and efficacy of their products, comply with current Good Manufacturing Practices and submit marketing materials before being allowed to market pharmaceutical products. While we plan to pursue or support the pursuit of the approval of our product, success in acquiring regulatory approval for any product is not assured.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>In order to market our pharmaceutical product in Canada, the United States, Europe and other jurisdictions, we must successfully meet the requirements of those jurisdictions. The requirements of the Appropriate Regulatory Authority will generally include the following stages as part of the regulatory process:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-17-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><i><b><font size=2>Pre-Pharmacological Studies</font></b></i><b><font size=2> </font></b><font size=2>- Pre-Pharmacological studies involve extensive testing on laboratory animals to determine if a potential therapeutic product has utility in an </font><i><font size=2>in vivo</font></i><font size=2> disease model and has any adverse toxicology in a disease model.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><i><b><font size=2>Investigational New Drug Application</font></b></i><font size=2> - An Investigational New Drug (&#147;IND&#148;) Submission, or the equivalent, must be submitted to the appropriate regulatory authority prior to conducting Pharmacological Studies.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><i><b><font size=2>Pharmacological Studies</font></b></i><b><font size=2> </font></b><font size=2>(or Phase I Clinical Trials) - Pharmacological studies are designed to assess the potential harmful or other side effects that an individual receiving the therapeutic compound may experience. These studies, usually short in duration, are often conducted with healthy volunteers or actual patients and use up to the maximum expected therapeutic dose.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><i><b><font size=2>Therapeutic Studies</font></b></i><b><font size=2> </font></b><font size=2>(or Phase II and III Clinical Trials) - Therapeutic studies are designed primarily to determine the appropriate manner for administering a drug to produce a preventive action or a significant beneficial effect against a disease. These studies are conducted using actual patients with the condition that the therapeutic is designed to remedy.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Prior to initiating these studies, the organization sponsoring the program is required to satisfy a number of requirements via the submission of documentation to support the approval for a clinical trial.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><i><b><font size=2>New Drug Submission</font></b></i><font size=2> - After all three phases of a clinical trial have been completed, the results are submitted with the original IND Submission to the appropriate regulatory authority for marketing approval. Once marketing approval is granted, the product is approved for commercial sales. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Market and Competition</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>According to estimates for 2006 from the American Cancer Society, 1.4 million Americans are expected to be diagnosed with cancer in the year, and 565,000 Americans are forecast to die of cancer. In the United States cancer accounts for 25% of all deaths, second only to heart disease. In the United States, the relative lifetime risk of a male developing cancer is 1 in 2, while for women, this risk is 1 in 3.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>The costs of this disease state are also significant. In the United States, the National Institute of Health estimates that the overall annual costs for cancer treatment are $263.3 billion. Of this figure, $78.2 billion can be attributed to direct patient costs.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>It has been estimated that approximately 30% of all tumours are a result of activating mutations of Ras itself. Since Ras can be activated by mechanisms other than direct mutations it is believed that the number of tumours with activated Ras (either through direct activating mutation or mutation or over-expression of elements upstream of Ras) is approximately two thirds.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>We are aware of large pharmaceutical companies developing small molecule programs for the development of therapeutics to treat Ras mediated tumours. In addition, there are numerous companies, both big and small, that are working in the field of cancer therapeutics including some companies developing other oncolytic viruses. See </font><i><font size=2>&#147;Risk Factors.&#148;</font></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Product Marketing Strategy</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>The markets for the cancer product being developed by us may be large and could require substantial sales and marketing capability. Before or upon successful completion of the development of a cancer product, we intend to enter into one or more strategic partnerships or other collaborative arrangements with a pharmaceutical company or other company with marketing and distribution expertise to address this need. If necessary, we will establish arrangements with various partners for different geographical </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-18-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>areas or specific applications at various times in the development process. Our management and consultants have relevant experience with the partnering process.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Third Party Advisor, Collaborators and Scientific Advisory Board</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>We use various third party advisors, scientific collaborators and our scientific advisory board to assist us with the advancement of REOLYSIN<sup>&reg;</sup>. We typically report on the activity of these groups once their work is completed. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Scientific Advisory Board</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Our Scientific Advisory Board is comprised of Ramon Alemany, Ph.D., Richard Gorlick, M.D., Alan Tuchman, M.D., and Frank Tufaro, Ph.D.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.25in;text-align:justify;'><font size=2>Ramon Alemany, Ph.D., is a recognized expert on the development of antitumoural agents based on the adenovirus. During an eight year period in the United States he held progressively more senior positions in gene therapy laboratories at the MD Anderson Cancer Center, Baxter Healthcare Corporation and the University of Alabama at Birmingham. In 2001, he was appointed Director of the Gene and Viral Therapy Group at the Institut Catala d&#146;Oncologia in Barcelona. Dr.&nbsp;Alemany is currently collaborating with us to develop modified adenoviruses that are selective for Ras mediated cancers.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.25in;text-align:justify;'><font size=2>Richard Gorlick, M.D., is the Section Chief of Hematology/Oncology in the department of pediatrics at the Children&#146;s Hospital at Montefiore in New York. He is actively involved in the national pediatric cooperative group, the Children&#146;s Oncology Group, for which he serves as the Chairman of the subcommittee on Bone Tumour Biology. Dr.&nbsp;Gorlick is known for his research work on molecular pharmacology of antifolate resistance and developing new therapeutic approaches for osteosarcoma.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.25in;text-align:justify;'><font size=2>Alan Tuchman, M.D., works in private practice and is Clinical Professor of Neurology at New York Medical College. He is also the Principal of NeuroPhysics Corporation, a healthcare and neuroscience consulting firm. From 1997 to 2001 Dr.&nbsp;Tuchman was the Senior Vice President of Equity Research for Oscar Gruss &amp; Son, where he conducted investment research and helped develop marketing strategies for healthcare companies. He also held senior neurology positions at New York Medical College and Lincoln Medical and Mental Health Center.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.25in;text-align:justify;'><font size=2>Frank Tufaro, Ph.D., has extensive experience with biotech firms and was one of the founders of NeuroVir Inc., a Vancouver-based biotech company, which is now merged with MediGene AG to develop Herpes Simplex virus-based oncolytic vectors for cancer therapy. Under Dr.&nbsp;Tufaro&#146;s direction, NeuroVir and then MediGene Inc. were able to initiate and complete the first Phase I/II U.S. clinical trials of two herpes-based oncolytic viruses for the treatment of malignant brain tumours, and the treatment of colorectal cancer metastatic to the liver. He currently serves on scientific advisory boards for several biotech companies.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Intellectual Property Policy</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>
At the end of 2006, we had 17 patents issued in the United  States,  five issued
in Canadian and three issued in Europe with additional  applications in process.
In addition, we have numerous patent issuances in other jurisdictions throughout
the world. All potentially valuable  intellectual  property is identified by the
inventory,  and  classified  by us in terms of its  sensitivity.  All  sensitive
documentation  related to the  intellectual  property is  protected  and kept in
secure  areas.  All  employees  execute  agreements  containing  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-19-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>
confidentiality  clauses,  which assign any new intellectual  property to us. We
believe that we apply our intellectual  property protection policy consistently.
Where appropriate,  and consistent with management&#146;s objective, patents are
pursued  as  soon  as the  concepts  have  been  validated  through  appropriate
laboratory  work. To that end,  patents will continue to be sought on components
or concepts that we perceive to be essential.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>We believe that one of the best intellectual property control policies is a strong human resources policy to ensure that technical leaders with access to proprietary intellectual property do not consider leaving us for other employment. We intend that all staff be compensated through competitive salaries and participation in our stock option program.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Patent and Patent Application Summary</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Where a patent is filed in the United States there is an option to file a Patent Cooperation Treaty (&#147;PCT&#148;) application. The PCT application process is a means for technology patented in one of the PCT signatory countries to receive protection in other PCT countries. The PCT includes over 100 countries. Within one year of filing a patent in the United States, the applicant files for PCT coverage in all PCT countries. Approximately 18 months after the PCT filing, the applicant must pay individual filing fees in designated PCT countries and at that time the applicant may wish to restrict coverage to a subset of countries which have potential for the technology. At the time of filing the PCT application the applicant designates which of the member countries are to be covered by the application. The PCT application allows the applicant to defer national filings in the various designated countries for
a period of up to 30 months from the original PCT application filing date. After the PCT application deferral period, the applicant must file for separate national or regional patents in one or more designated countries, depending on which specific markets the applicant intends to target.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>The following table sets forth certain select patent issuances:</font></p>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=650>
<TR VALIGN=Bottom>
     <TH COLSPAN=2 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>
Title</FONT></TH>
     <TH COLSPAN=2 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>
Ownership</FONT></TH>
     <TH COLSPAN=2 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>
Inventors</FONT></TH>
     <TH COLSPAN=2 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>
Status of Patent</FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=30% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Patent Number U.S. 6,110,461</FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD WIDTH=19% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD WIDTH=19% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Patrick W.K. Lee</FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD WIDTH=10% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD WIDTH=12% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Aug. 13, 1997</FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Reovirus for the Treatment of</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. James E. Strong</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Aug. 29, 2000</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Neoplasia</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Patent Number U.S. 6,136,307</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Patrick W.K. Lee</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Feb. 24, 1999</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Reovirus for the Treatment of</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. James E. Strong</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oct. 24, 2000</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>cellular proliferative disorders</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Patent Number U.S. 6,261,555</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Patrick W .K. Lee</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Aug. 12, 1998</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Reovirus for the treatment of</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. James Strong</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>July 17, 2001</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Neoplasia</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Patent Number U.S. 6,344,195</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Patrick W. K. Lee</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>May 12, 2000</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Reovirus for the treatment of</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. James Strong</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Feb. 5, 2002</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Neoplasia</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>European Patent Number 1003534</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Patrick W. K. Lee</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Aug 12, 1998</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Reovirus for the treatment of</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. James Strong</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>March 6, 2002</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Neoplasia</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH></TR>
</TABLE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>
<BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-20-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=650>
<TR VALIGN=Bottom>
     <TH COLSPAN=2 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>
Title</FONT></TH>
     <TH COLSPAN=2 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>
Ownership</FONT></TH>
     <TH COLSPAN=2 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>
Inventors</FONT></TH>
     <TH COLSPAN=2 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>
Status of Patent</FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=30% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD WIDTH=19% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD WIDTH=19% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD WIDTH=10% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD WIDTH=12% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Patent Number U.S. 6,455,038</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Patrick L. Lee</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>June 15, 2000</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Reovirus for the treatment of</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. James E. Strong</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Sept. 24, 2002</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Cellular Proliferative Disorders</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Patent Number U.S. 6,528,305</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Bradley G. Thompson</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Aug. 2, 2001</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Method of Producing Infectious</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued :</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>March 4, 2003</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Reovirus</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Patent Number U.S. 6,565,831</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Aug. 10, 2000</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Methods of Preventing Reovirus</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Bradley G. Thompson</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>May 20, 2003</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Recognition for the Treatment</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>for Cellular Proliferative</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Disorders</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Patent Number U.S. 6,576,234</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Patrick L. Lee</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>May 10, 2001</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Reovirus for the Treatment of</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. James E. Strong</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>June 10, 2003</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Neoplasia</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Patent Number U.S. 6,596,268</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Nov. 9, 2000</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Viruses for the Treatment of</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Bradley G. Thompson</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>July 22, 2003</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Cellular Proliferative</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Disorders (1)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Patent Number U.S. 6,649,157</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Sept. 28, 2001</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Viruses for the Treatment of</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Bradley G. Thompson</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Nov 18, 2003</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Cellular Proliferative</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Disorders (2)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Patent Number U.S. 6,703,232</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>January 8, 2003</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Methods of Producing Infectious</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Bradley G. Thompson</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>March 9, 2004</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Reovirus</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Patent Number U.S. 6,808,916</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>March 14, 2002</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Method of Extracting Virus from</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Bradley G. Thompson</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oct. 26, 2004</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Cell Culture</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Patent Number U.S. 6,811,775</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Patrick L. Lee</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>August 15, 2002</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Reovirus for the Treatment of</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. James E. Strong</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Nov. 2, 2004</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Cellular Proliferative Disorders</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>European patent number 1,309,672</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>July 20, 2001</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Method of Producing Infectious</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Bradley G. Thompson</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>June 29, 2005</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Reovirus</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Canadian patent number 2,374,388</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>March 4, 2002</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>The use of Ribozymes in the</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>July 12, 2005</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Detection of Adventitious Agents</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
</TABLE>



<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-21-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=650>
<TR VALIGN=Bottom>
     <TH COLSPAN=2 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>
Title</FONT></TH>
     <TH COLSPAN=2 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>
Ownership</FONT></TH>
     <TH COLSPAN=2 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>
Inventors</FONT></TH>
     <TH COLSPAN=2 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>
Status of Patent</FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=30% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD WIDTH=19% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD WIDTH=19% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD WIDTH=10% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD WIDTH=12% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Canadian patent number 2,428,206</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oct 26, 2001</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Methods for the Treatment of</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Sept. 27, 2005</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Cellular Proliferative Disorders</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Canadian patent number 2,283,280</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Patrick L. Lee</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Aug. 12, 1998</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Reovirus for the Treatment of</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. James E. Strong</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oct. 18, 2005</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Neoplasia</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Canadian patent number 2,437,962</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Mar 11, 2002</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Method of Extracting Virus From</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Bradley G. Thompson</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Nov. 15, 2005</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Cell Culture</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>U.S. patent number 6,994,858</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Don Morris</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>May 3, 2001</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Reovirus Clearance of Ras-Mediated</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Bradley G. Thompson</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Feb. 7, 2006</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Neoplastic Cells from Mixed</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Cellular Compositions</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>U.S. patent number 7,014,847</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Bradley G. Thompson</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Mar. 28, 2003</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Methods for Preventing Reovirus</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Mar. 21, 2006</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Recognition for the Treatment of</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Cellular Proliferative</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>U.S. patent number 7,049,127</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Bradley G. Thompson</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dec. 11, 2003</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Method of Producing Infectious</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>May 23, 2006</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Reovirus</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>U.S. patent number 7,052,832</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Nov. 6, 2001</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Methods for the Treatment of</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>May 30, 2006</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Cellular Proliferative Disorders</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>U.S. patent number 7,163,678</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Patrick W.K. Lee</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Nov. 6, 2003</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Reovirus for the Treatment of</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Kara L. Norman</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Jan. 16, 2007</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Ral-Mediated Cellular</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Proliferative Disorders</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Canadian patent number 2,415,750</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Bradley G. Thompson</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>July 20, 2001</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Methods for Preventing Reovirus</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Matthew C. Coffey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Mar. 28, 2006</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Recognition for the Treatment of</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Cellular Proliferative Disorders</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=10 align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>European patent number: 1,498,129</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Oncolytics Biotech Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Ramon Alemany</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Filing date:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Mar. 25, 2003</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Use of Adenoviruses Mutated in the</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Dr. Manel M. Cascallo</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Issued:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Nov. 16, 2005</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>VA Genes for Cancer Treatment</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TD></TR>
</TABLE>
<BR><BR>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-22-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:12pt; margin-top:12pt;text-align:justify;'><b><font size=2>Notes:</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 3.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>(1)</font></p> </td>
        <td  valign=top style='padding:0in 0in 3.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>Claims cover the treatment of Ras mediated tumours using modified adenoviruses.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>(2)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>Claims cover the treatment of Ras mediated tumours using modified herpes viruses.</font></p> </td> </tr></table>


<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Other patent applications have been filed by us, but have yet to be published or approved.</font></p>


<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Acquisition of all of the Shares of Oncolytics Biotech Inc. by SYNSORB</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>In April 1999, Oncolytics Biotech Inc., the Vendors and SYNSORB entered into the Share Purchase Agreement whereby SYNSORB acquired all of our then outstanding common shares for a share and cash exchange valued at $2,500,000 paid primarily in common shares of SYNSORB, four milestone payments payable to the Vendors valued, in the aggregate, at up to $4,000,000 and a royalty commitment. Pursuant to an assignment dated July 29, 1999, the obligation to make the milestone and certain royalty payments was assigned from SYNSORB to us. We thereby agreed to indemnify and save harmless SYNSORB from all actions, suits, demands, claims, costs, losses, expenses, charges and damages brought against SYNSORB in relation to the payment or non-payment of such obligations; however such assignment did not affect or release SYNSORB from its liabilities and responsibilities under the terms of the Share Purchase Agreement. As at
the date hereof, we have made three milestone payments totaling $3,000,000. The final milestone payment is $1.0 million payable within 90 days of the first receipt, in any country, from the Appropriate Regulatory Authority, for marketing approval to sell REOLYSIN<sup>&reg;</sup> to the public or the approval of a new drug application for REOLYSIN<sup>&#210;</sup>. In addition to the milestone payments, royalty payments payable to the Vendors will become due and payable in accordance with the Share Purchase Agreement upon realization of sales of REOLYSIN<sup>&reg;</sup>. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>In 2004, we reached an agreement that cancelled a portion of our future contingent obligation for consideration of $400,000 consisting of $250,000 cash and 21,459 common shares valued at $150,000. As a result, our future contingent obligations were reduced to 11.75% (formerly 14.25%) of royalty payments or other payments received as a result of entering into partnerships or other arrangements for the development of the reovirus technology. Alternatively, if we develop the reovirus treatment to the point where it may be marketed at a commercial level, the payments referred to in the foregoing sentence will be amended to equal a royalty payment of 2.35% (formerly 2.85%) of net sales received by us for such products.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Employees</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>As of December 31, 2006, we had 11 employees. The majority of our activities are conducted under contract with third party service providers.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Research and Development Expenditures</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>For the period ended December 31, 2006, we incurred research and development expenditures of $10,535,689 representing approximately 67.8% of our total expenses for the year. See </font><i><font size=2>&#147;Management&#146;s Discussion and Analysis &#150; Results of Operations &#150; Research and Development Expenses&#148;</font></i><font size=2>.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Dividend Policy</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>To date, we have not paid any dividends on our outstanding common shares. The future payment of dividends will be dependent upon our financial requirements to fund future growth, our financial condition and other factors which our Board of Directors may consider appropriate in the circumstances. It is unlikely that dividends will be paid in the foreseeable future.</font></p>
<BR><BR>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>
<BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-23-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>MARKET FOR SECURITIES</font></B></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Market for Common Shares</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Our outstanding common shares are listed and posted for trading on the Toronto Stock Exchange under the trading symbol &#147;ONC&#148; and on the Nasdaq Capital Market under the trading symbol &#147;ONCY&#148;. The </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>following table sets forth the market price ranges and the aggregate volume of trading of the common shares on the Toronto Stock Exchange and Nasdaq Small Cap Market for the periods indicated:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="631" style=' border-collapse:collapse'>
    <tr>
        <td width="173" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:6.0pt; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="4" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p  align=center style='margin-bottom:6.0pt;text-align:center; page-break-after:avoid;border: none;padding:0in'><b><font size=2>Toronto Stock Exchange</font></b></p> </div> </td>
        <td  colspan="4" valign=top style='padding:0in 5.4pt 0in 5.4pt;border-color:gray'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p  align=center style='margin-bottom:6.0pt;text-align:center; page-break-after:avoid;border: none;padding:0in'><b><font size=2>Nasdaq Capital Market</font></b></p> </div> </td> </tr>
    <tr>
        <td width="173" valign=top style='padding:0in 5.4pt 0in 5.4pt;border-color:gray'>
            <p  style=' page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="57" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>High</font></b><br> <b><font size=2>($)</font></b></p> </div> </td>
        <td width="54" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Low</font></b><br> <b><font size=2>($)</font></b></p> </div> </td>
        <td width="54" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Close</font></b><br> <b><font size=2>($)</font></b></p> </div> </td>
        <td width="66" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Volume</font></b></p> </div> </td>
        <td width="54" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>High</font></b><br> <b><font size=2>(US$)</font></b></p> </div> </td>
        <td width="54" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Low</font></b><br> <b><font size=2>(US$)</font></b></p> </div> </td>
        <td width="54" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Close</font></b><br> <b><font size=2>(US$)</font></b></p> </div> </td>
        <td width="66" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Volume</font></b></p> </div> </td> </tr>
    <tr>
        <td width="173" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=left style='margin-bottom:0in; text-align:left;page-break-after: avoid'><u><b><font size=2>Period</font></b></u><u></u></p> </td>
        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="173" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="173" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=left style='margin-bottom:0in; text-align:left;page-break-after: avoid'><b><font size=2>2006</font></b></p> </td>
        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-bottom:0in; page-break-after:avoid'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="173" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>January</font>          </p> </td>
        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>5.49</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>4.68</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>4.90</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>665,987</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>4.79</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>4.12</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>4.35</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>1,128,094</font></p> </td> </tr>
    <tr>
        <td width="173" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>February</font>    </p> </td>
        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>5.47</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>4.60</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>5.20</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>774,307</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>4.75</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>3.98</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>4.51</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:9.0pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>879,890</font></p> </td> </tr>
    <tr>
        <td width="173" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>March</font>                </p> </td>
        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>6.05</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>5.20</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>6.05</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>849,957</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>5.25</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>4.57</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>5.16</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>1,527,008</font></p> </td> </tr>
    <tr>
        <td width="173" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>April</font>                      </p> </td>
        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>6.09</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>4.53</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>4.55</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>1,011,013</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>5.23</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>3.94</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>4.07</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>1,317,432</font></p> </td> </tr>
    <tr>
        <td width="173" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>May</font>                        </p> </td>
        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>4.60</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>3.69</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>3.72</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>569,967</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>4.23</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>3.22</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>3.39</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:9.0pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>944,610</font></p> </td> </tr>
    <tr>
        <td width="173" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>June</font>                          </p> </td>
        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>4.03</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>3.18</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>3.19</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>582,377</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>3.65</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.80</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.85</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:9.0pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>872,172</font></p> </td> </tr>
    <tr>
        <td width="173" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>July </font>                        </p> </td>
        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>3.40</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.25</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.54</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>834,167</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.96</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.14</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.26</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:9.0pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>878,257</font></p> </td> </tr>
    <tr>
        <td width="173" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>August</font>             </p> </td>
        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>3.29</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.50</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>3.20</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>945,281</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.99</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.20</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.89</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:9.0pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>739,891</font></p> </td> </tr>
    <tr>
        <td width="173" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>September</font>                                             </p> </td>
        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>3.73</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>3.01</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>3.05</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>610,426</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>3.38</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.69</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.76</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:9.0pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>710,165</font></p> </td> </tr>
    <tr>
        <td width="173" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>October</font>         </p> </td>
        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>3.09</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.64</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.65</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>725,084</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.80</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.36</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.36</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:9.0pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>673,207</font></p> </td> </tr>
    <tr>
        <td width="173" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>November</font>                                              </p> </td>
        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.85</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.19</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.23</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>873,397</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2.55</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>1.91</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:0pt'><font size=2>1.94</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>1,202,946</font></p> </td> </tr>
    <tr>
        <td width="173" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:12.0pt'><font size=2>December</font>                                                </p> </td>
        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:12.0pt'><font size=2>2.75</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:12.0pt'><font size=2>2.04</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:12.0pt'><font size=2>2.39</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:12.0pt'><font size=2>1,272,395</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:12.0pt'><font size=2>2.38</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:12.0pt'><font size=2>1.80</font></p> </td>
        <td width="54" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:12.0pt'><font size=2>2.09</font></p> </td>
        <td width="66" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:2.25pt;text-align:left;margin-top:2.0pt;margin-bottom:12.0pt'><font size=2>1,635,947</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Description of Common Shares</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>The holders of our common shares are entitled to one vote per share at meetings of shareholders, to receive such dividends as declared by us and to receive our remaining property and assets upon dissolution or wind 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. As at December 31, 2006, we have outstanding stock options and common share purchase warrants as set forth in Note 9 and 10 of our audited financial statements.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>DIRECTORS AND OFFICERS</font></B></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Our directors are elected by the shareholders at each Annual General Meeting and typically hold office until the next Annual General Meeting at which time they may be re-elected or replaced. Casual vacancies on the board are filled by the remaining directors and the persons filling those vacancies hold office until the next Annual General Meeting at which time they may be re-elected or replaced. The officers are appointed by the Board of Directors and hold office indefinitely at the pleasure of the Board of Directors.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>The following table sets forth the names and municipalities of residence of all our directors and officers as at the date hereof, as well as the positions and offices held by such persons and their principal occupations.</font></p>
<BR><BR>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>
<BR>



<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-24-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="131" valign=bottom style='padding:0in .05in 0in .05in'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Name and Municipality of  Residence</font></b></p>  </div>  </td>
        <td width="102" valign=bottom style='padding:0in .05in 0in .05in'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Position with the  Corporation</font></b></p>  </div>  </td>
        <td width="306" valign=bottom style='padding:0in .05in 0in .05in'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Principal Occupation</font></b></p>  </div>  </td>
        <td width="90" valign=bottom style='padding:0in .05in 0in .05in'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Director of the  Corporation Since</font></b></p>  </div>  </td> </tr>
    <tr>
        <td width="131" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="102" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="306" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="90" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td> </tr> </table>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="131" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Bradley G. Thompson</font><br> <font size=1>Ph.D<sup>(2)</sup></font><br> <i><font size=1>Calgary, Alberta</font></i><i></i></p> </td>
        <td width="102" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>President, Chief Executive Officer and Executive Chairman of the Board</font></p> </td>
        <td width="306" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Executive Chairman of the Board, President and Chief Executive Officer since April 1999. </font></p> </td>
        <td width="90" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:12.0pt'><font size=1>April 21, 1999</font></p> </td> </tr>
    <tr>
        <td width="131" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Douglas A. Ball C.A.</font><br> <i><font size=1>Calgary, Alberta</font></i><i></i></p> </td>
        <td width="102" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Chief Financial Officer and Director</font></p> </td>
        <td width="306" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Chief Financial Officer since May 2000. Mr.&nbsp;Ball was Vice President, Finance and Chief Financial Officer of SYNSORB from June 1997 to May 2000. Prior to this, he was the Vice President, Finance and Administration and Chief Financial Officer of ECL Group of Companies Ltd. Mr.&nbsp;Ball held this position from December 1995 until May 1997. Prior to ECL, he was Controller and then Vice President and Controller of Canadian Airlines International Ltd. from June 1993 until August 1995.</font></p> </td>
        <td width="90" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:12.0pt'><font size=1>April 21, 1999</font></p> </td> </tr>
    <tr>
        <td width="131" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>William A. Cochrane, OC, M.D. <sup>(2),(3)</sup></font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><font size=1>Calgary, Alberta</font></i></p> </td>
        <td width="102" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Director</font></p> </td>
        <td width="306" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>President of W.A. Cochrane &amp; Associates, Inc. (a consulting company) since 1989 and Chairman of Resverlogix Corp. (a public biopharmaceutical company) and University Technologies International Inc. (UTI) at the University of Calgary since 2000, and is a director of Sernova Corp., and Medicure Inc. Dr.&nbsp;Cochrane is an Officer of the Order of Canada and a 2002 recipient of the Queens Golden Jubilee Medal. Dr.&nbsp;Cochrane also served as the Deputy Minister of Health Services for the Province of Alberta from 1973 to 1974 and President of the University of Calgary from 1974 to 1978.</font></p> </td>
        <td width="90" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:12.0pt'><font size=1>October 31, 2002</font></p> </td> </tr>
    <tr>
        <td width="131" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Matthew C. Coffey Ph.D.</font><br> <i><font size=1>Calgary, Alberta</font></i><i></i></p> </td>
        <td width="102" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Chief Scientific Officer</font></p> </td>
        <td width="306" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Chief Scientific Officer of the Corporation since December 2004, Vice-President of Product Development from July 1999 to December 2004 and Chief Financial Officer from September 1999 to May 2000. </font></p> </td>
        <td width="90" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:12.0pt'><font SIZE=1>N/A</font></p> </td> </tr>
    <tr>
        <td width="131" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>George M. Gill, M.D.</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><i><font size=1>Washington, D.C.</font></i></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Senior Vice President, Clinical and Regulatory Affairs</font></p> </td>
        <td width="306" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Dr.&nbsp;Gill has been a consultant in clinical research and regulatory affairs to the pharmaceutical and biotechnology industries since he retired from Ligand Pharmaceuticals in 1999. During his 38 years in the industry, he also served in senior executive positions with ICI Pharmaceuticals (now AstraZeneca), Bristol-Myers Squibb, and Hoffmann-La Roche. Dr.&nbsp;Gill holds a B.Sc. in chemistry from Dickinson College in Pennsylvania and an M.D. from the School of Medicine of the University of Pennsylvania in Philadelphia.</font></p> </td>
        <td width="90" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:12.0pt'><font SIZE=1>N/A</font></p> </td> </tr>
    <tr>
        <td width="131" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Robert B. Schultz, F.C.A. <sup>(1)</sup></font><br> <i><font size=1>Toronto, Ontario</font></i></p> </td>
        <td width="102" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Lead Director</font></p> </td>
        <td width="306" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Chairman and Director of Rockwater Capital Corporation formerly McCarvill Corporation (a financial services company) since June 2001. Chairman and Chief Executive Officer of Merrill Lynch Canada from August 1998 until his retirement on May 1, 2000. Prior to this appointment, Mr.&nbsp;Schultz was Chief Executive Officer at Midland Walwyn since 1990. Since joining the investment industry in 1971, Mr.&nbsp;Schultz has held a variety of senior positions, and has participated on various industry-related boards and committees including Director and Chairman of the Investment Dealers Association of Canada.</font></p> </td>
        <td width="90" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:12.0pt'><font size=1>June 30, 2000</font></p> </td> </tr>
</table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-25-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="131" valign=bottom style='padding:0in .05in 0in .05in'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Name and Municipality of  Residence</font></b></p>  </div>  </td>
        <td width="102" valign=bottom style='padding:0in .05in 0in .05in'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Position with the  Corporation</font></b></p>  </div>  </td>
        <td width="306" valign=bottom style='padding:0in .05in 0in .05in'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Principal Occupation</font></b></p>  </div>  </td>
        <td width="90" valign=bottom style='padding:0in .05in 0in .05in'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Director of the  Corporation Since</font></b></p>  </div>  </td> </tr>
    <tr>
        <td width="131" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="102" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="306" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="90" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td> </tr> </table>

<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="131" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Fred A. Stewart, Q.C.<sup>(1)(2)</sup></font><i><font size=1>, </font></i><br> <i><font size=1>Calgary, Alberta</font></i><i></i></p> </td>
        <td width="102" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Director</font></p> </td>
        <td width="306" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>President of Fred Stewart &amp; Associates Inc. (a government and corporate relations consulting company) since March 1996. Prior to that, Mr.&nbsp;Stewart was an associate with Milner Fenerty, Barristers and Solicitors from June 1993 to March 1996. Mr.&nbsp;Stewart served as Member of the Legislative Assembly of the Province of Alberta from 1986 to 1993.</font></p> </td>
        <td width="90" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:12.0pt'><font size=1>August 27, 1999</font></p> </td> </tr>
    <tr>
        <td width="131" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>J. Mark Lievonen C.A.<sup>(3)</sup></font><br> <i><font size=1>Markham, Ontario</font></i><i></i></p> </td>
        <td width="102" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Director</font></p> </td>
        <td width="306" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>President of Sanofi Pasteur Limited, a vaccine development, manufacturing and&nbsp;marketing company, since October 1998 and holding various positions with Sanofi Pasteur Limited and its predecessors since 1983. Mr.&nbsp;Lievonen serves on a number of industry and community boards and councils including BIOTECanada, the Ontario Genomics Institute, the Ontario Institute for Cancer Research,&nbsp;and York University.</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:12.0pt'><font size=1>April 5, 2004</font></p> </td> </tr>
    <tr>
        <td width="131" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Karl Mettinger, M.D., Ph.D</font><br> <i><font size=1>Berkeley, CA</font></i>  </p> </td>
        <td width="102" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Chief Medical Officer</font></p> </td>
        <td width="306" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>Dr.&nbsp;Mettinger has been involved in clinical and regulatory affairs with various pharmaceutical companies since 1985. Prior to joining Oncolytics, he was Senior Vice President and Chief Medical Officer with SuperGen Inc. Prior to that, he was Executive Director, Clinical Research at IVAX/Baker Norton,&nbsp;the new drug subsidiary of IVAX Corporation. He began his career in the industry as a Medical Director with KABI in Sweden. Dr.&nbsp;Mettinger holds an MD from the University of Lund in Sweden and a PhD (hematology/stroke) from the Karolinska Institute/Karolinska Hospital&nbsp;in Stockholm, Sweden, where he was a physician and an Associate Professor. He has overseen the&nbsp;global development and approval of a number of products including several in oncology.</font></p>
<p
style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:12.0pt'><font SIZE=1>N/A</font></p> </td> </tr>
    <tr>
        <td width="131" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>Jim Dinning<sup>(1)</sup></font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><i><font size=1>Calgary, Alberta</font></i><i></i></p> </td>
        <td width="102" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Director</font></p> </td>
        <td width="306" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Chair of Western Financial Group since September 2004. Mr.&nbsp;Dinning was Executive Vice President of TransAlta Corporation (power generation and wholesale marketing company) from 1997 to 2004 and served as Member of the Legislative Assembly of the Province of Alberta from 1986 to 1997. Mr.&nbsp;Dinning is a director of Finning International Inc. and Shaw Communications Inc as well as other public and private companies.</font></p> </td>
        <td width="90" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:12.0pt'><font size=1>March 24, 2004</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=1>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=1>-26-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="131" valign=bottom style='padding:0in .05in 0in .05in'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Name and Municipality of  Residence</font></b></p>  </div>  </td>
        <td width="102" valign=bottom style='padding:0in .05in 0in .05in'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Position with the  Corporation</font></b></p>  </div>  </td>
        <td width="306" valign=bottom style='padding:0in .05in 0in .05in'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Principal Occupation</font></b></p>  </div>  </td>
        <td width="90" valign=bottom style='padding:0in .05in 0in .05in'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Director of the  Corporation Since</font></b></p>  </div>  </td> </tr>
    <tr>
        <td width="131" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="102" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="306" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="90" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td> </tr> </table>

<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="131" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Ger van Amersfoort,<sup>(2)</sup></font><br> <i><font size=1>Oakville, Ont</font></i><i></i></p> </td>
        <td width="102" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Director</font></p> </td>
        <td width="306" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>President and Chief Executive Officer of Novartis Canada, a pharmaceutical company with in excess of $1 billion in annual sales and a workforce of 1,500, until his retirement in 2001. Before joining Novartis, he was President and Chief Executive Officer of the U.K. SmithKline Beecham operations from 1997 until managing the merger with Novartis in 1999. From 1990 to 1997, Mr.&nbsp;van Amersfoort headed up SmithKline Beecham operations in Canada as President and Chief Executive Officer. Prior to that, he held managing director positions with Beecham and The Boots Company, and sales positions with Bristol Myers in Holland. He is a recipient of the Paul Harris Medal and the Commemorative Medal of the Queen for outstanding services to the community. He has served on the Board of the Pharmaceutical Manufacturers
Association of Canada (now Rx and D) for more than nine years, serving as chairman in 1996.</font></p> </td>
        <td width="90" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:12.0pt'><font size=1>June 15, 2006</font></p> </td> </tr>
    <tr>
        <td width="131" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Ed Levy, Ph.D,<sup> (3)</sup></font><br> <i><font size=1>Lund, BC</font></i>  </p> </td>
        <td width="102" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Director</font></p> </td>
        <td width="306" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Adjunct professor at the W. Maurice Young Centre for Applied Ethics at the University of British Columbia since retiring from QLT Inc. in late 2002. From 1988 to 2002, Dr.&nbsp;Levy was with Vancouver-based biotechnology company QLT Inc., most recently as Senior Vice President from 1998. In these roles, he was primarily responsible for negotiating and managing QLT&#146;s strategic alliances, led strategic planning and oversaw the company&#146;s intellectual property. Dr.&nbsp;Levy served on the board of BIOTECanada from 1999-2002, and he has served on the boards of several technology companies and not-for-profits. Dr.&nbsp;Levy holds a PhD in the History and Philosophy of Science from Indiana University and taught philosophy of science at UBC from 1967-1988.</font></p> </td>
        <td width="90" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:12.0pt'><font size=1>May 17, 2006</font></p> </td> </tr>
    <tr>
        <td width="131" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Mary Ann Dillahunty,</font><br> <i><font size=1>Half Moon Bay, CA</font></i></p> </td>
        <td width="102" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Vice President, Intellectual Property</font></p> </td>
        <td width="306" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>Ms.&nbsp;Dillahunty was a principal in the law firm of Fish &amp; Richardson, a leading intellectual property firm in the U.S. In 1992, she joined the law firm of Burns, Doane, Swecker &amp; Mathis (now part of Buchanan Ingersoll &amp; Rooney), and subsequently became a partner in the firm. During 1996-1997, Ms.&nbsp;Dillahunty held the position of patent counsel to the Implant Division of ALZA Corporation. Before joining Burns Doane, she was a patent agent and law clerk with the law firm of Heller, Ehrman, White &amp; McAuliffe. Prior to focusing her career on patent law, Ms.&nbsp;Dillahunty held numerous positions in the biotechnology, pharmaceutical and medical device industries, including responsibilities in regulatory affairs and research science. Ms.&nbsp;Dillahunty holds a B.S. in Microbiology from Michigan
State University, an MBA from George Washington University, and a JD degree from Stanford Law School.</font></p> </td>
        <td width="90" valign=top style='padding:0in .05in 0in .05in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:12.0pt'><font SIZE=1>N/A</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:6pt; margin-top:0pt;text-align:justify;'><b><font size=2>Notes:</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 3.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>(1)</font></p> </td>
        <td  valign=top style='padding:0in 0in 3.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>These persons are members of the Audit Committee. Mr.&nbsp;Stewart is the Chair of the Audit Committee.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 3.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>(2)</font></p> </td>
        <td  valign=top style='padding:0in 0in 3.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>These persons are members of the Compensation Committee. Mr.&nbsp;Stewart is the Chair of the Compensation Committee.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 3.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>(3)</font></p> </td>
        <td  valign=top style='padding:0in 0in 3.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>These persons are members of the Corporate Governance and Nominating Committee. Mr.&nbsp;Lievonen is the Chair of the Corporate Governance and Nominating Committee.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>As at the date hereof, the directors and senior officers as a group beneficially owned, directly or indirectly, 672,201 of our common shares, representing 1.7% of the issued and outstanding common shares.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-27-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Certain of our directors are associated with other companies, which may give rise to conflicts of interest. In accordance with the ABCA, directors who have a material interest in any person who is a party to a material contract or a proposed material contract with us are required, subject to certain exceptions, to disclose that interest and abstain from voting on any resolution to approve that contract. In addition, the directors are required to act honestly and in good faith with a view to the best interests of Oncolytics Biotech Inc.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>AUDIT COMMITTEE MATTERS</font></B></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><i><b><font size=2>Mandate of the Audit Committee</font></b></i></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Policy Statement</font></b></p> </td> </tr></table>


<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>It is the policy of Oncolytics Biotech Inc. (the &#147;Corporation&#148;) to establish and maintain an Audit Committee, composed entirely of independent directors, to assist the Board of Directors (the &#147;Board&#148;) in carrying out their oversight responsibility for the Corporation&#146;s internal controls, financial reporting and risk management processes. The Audit Committee will be provided with resources commensurate with the duties and responsibilities assigned to it by the Board including administrative support. If determined necessary by the Audit Committee, it will have the discretion to institute investigations of improprieties, or suspected improprieties within the scope of its responsibilities, including the standing authority to retain special counsel or experts.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Composition of the Committee</font></b></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The Audit Committee shall consist of a minimum of three (3) directors, at least half of whom shall be resident Canadians. The Board shall appoint the members of the Audit Committee and may seek the advice and assistance of the Corporate Governance and Nominating Committee in identifying qualified candidates. The Board shall appoint one member of the Audit Committee to be the Chair of the Audit Committee, or delegate such authority to appoint the Chair of the Audit Committee to the Audit Committee.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The Chair of the Committee shall be responsible for leadership of the Committee, including preparing or approving the agenda, presiding over the meetings, and making committee assignments.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>
Each director  appointed to the Audit Committee by the Board shall be an outside
director  who is  unrelated.  An outside,  unrelated  director is a director who
meets the requirements of NASDAQ Rule 4200 and Multilaterial  Instrument 52-110.
A director  appointed to the audit committee shall also meet the requirements of
NASDAQ Rule 4350 (d)(2)(A)(ii) and Exchange Act Rule 10A-3(b)(1).  Such director
shall be independent  of management and free from any interest,  any business or
other relationship which could, or could reasonably be perceived,  to materially
interfere  with  the  director&#146;s  ability  to act  with a view to the  best
interests of the  Corporation,  other than interests and  relationships  arising
from  shareholding.   In  determining  whether  a  director  is  independent  of
management,  the Board shall make reference to the abovementioned  rules and any
applicable   revisions  thereto,   and  any  additional  relevant  then  current
legislation,   rules,   policies  and   instruments  of  applicable   regulatory
authorities.</font></p> </td> </tr></table>
<BR><BR>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>
<BR>




<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-28-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>
Each member of the Audit Committee shall be financially literate. In order to be
financially  literate,  a  director  must  be,  at a  minimum,  able to read and
understand  basic  financial  statements  that  present a  breadth  and level of
complexity of accounting issues that are generally comparable to the breadth and
complexity of the issues that can
reasonably be expected to be raised by the Corporation&#146;s financial statements. At least one member shall have accounting or related financial management expertise, meaning the ability to analyze and interpret a full set of financial statements, including the notes attached thereto, in accordance with generally accepted accounting principles. In determining whether a member of the Audit Committee is financially literate or has accounting or related financial expertise, reference shall be made to the then current legislation, rules, policies and instruments of applicable regulatory authorities, which for further clarification, shall include but not be limited to the definition of &#147;financial expert&#148; as defined by the U.S. Securities and Exchange Commission rule.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(e)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>A director appointed by the Board to the Audit Committee shall be a member of the Audit Committee until replaced by the Board or until his or her resignation. </font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Meetings of the Committee</font></b></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in; text-indent:-0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The Audit Committee shall convene a minimum of four times each year at such times and places as may be designated by the Chair of the Audit Committee and whenever a meeting is requested by the Board, a member of the Audit Committee, the auditors, or senior management of the Corporation. Scheduled meetings of the Audit Committee shall correspond with the review of the year-end and quarterly financial statements and management discussion and analysis.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Notice of each meeting of the Audit Committee shall be given to each member of the Audit Committee and to the auditors, who shall be entitled to attend each meeting of the Audit Committee and shall attend whenever requested to do so by a member of the Audit Committee.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Notice of a meeting of the Audit Committee shall:</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(i)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>be in writing, including by electronic communication facilities;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(ii)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>state the nature of the business to be transacted at the meeting in reasonable detail;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(iii)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>to the extent practicable, be accompanied by copies of documentation to be considered at the meeting; and</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(iv)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>be given at least two business days prior to the time stipulated for the meeting or such shorter period as the members of the Audit Committee may permit.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>A quorum for the transaction of business at a meeting of the Audit Committee shall consist of a majority of the members of the Audit Committee. However, it shall be the practice of the Audit Committee to require review, and, if necessary, approval of certain important matters by all members of the Audit Committee.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(e)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>
A member or members of the Audit  Committee may  participate in a meeting of the
Audit Committee by means of such telephonic,  electronic or other  communication
facilities,  as permits all persons  participating in the meeting to communicate
adequately with each </font></p> </td> </tr></table>
<BR><BR>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-29-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>
other. A member participating in such a meeting by any such
means is deemed to be present at the meeting.</font></p> </td> </tr></table>




<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(f)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>
In the  absence of the Chair of the Audit  Committee,  the  members of the Audit
Committee shall choose one of the members present to be Chair of the meeting. In
addition, the members of the Audit Committee shall choose one of the persons present to be the Secretary of the meeting.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(g)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>A member of the Board, senior management of the Corporation and other parties may attend meetings of the Audit Committee; however the Audit Committee (i) shall, at each meeting, meet with the external auditors independent of other individuals other than the Audit Committee and (ii) may meet separately with management.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(h)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Minutes shall be kept of all meetings of the Audit Committee and shall be signed by the Chair and the Secretary of the meeting.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>4.</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Duties and Responsibilities of the Committee</font></b></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The Audit Committee&#146;s primary duties and responsibilities are to:</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(i)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>identify and monitor the management of the principal risks that could impact the financial reporting of the Corporation ;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(ii)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>monitor the integrity of the Corporation&#146;s financial reporting process and system of internal controls regarding financial reporting and accounting compliance;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(iii)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>monitor the independence and performance of the Corporation&#146;s external auditors. This will include receipt, review and evaluation, at least annually, of a formal written statement from the independent auditors confirming their independence, and qualifications, including their compliance with the requirements of the relevant oversight boards ;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(iv)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>deal directly with the external auditors to pre-approve external audit plans, other services (if any) and fees;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(v)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>directly oversee the external audit process and results (in addition to items described in Section 4(d) below);</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(vi)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>provide an avenue of communication among the external auditors, management and the Board; and</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(vii)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>carry out a review designed to ensure that an effective &#147;whistle blowing&#148; procedure exists to permit stakeholders to express any concerns regarding accounting, internal controls, auditing matters or financial matters to an appropriately independent individual.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(viii)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Pre-approve any related party transactions to be entered into by the Company, and ensure appropriate disclosure thereof.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(ix)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Ensure financial disclosure incorporates inclusion of any material correcting adjustments required by the external auditors.</font></p> </td> </tr></table>
<BR><BR>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-30-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(x)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Require and ensure that the external auditors are directly responsible to the Audit Committee, to whom they report</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The Audit Committee shall have the authority to:</font></p> </td> </tr></table>




<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(i)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>inspect any and all of the books and records of the Corporation and its affiliates;</font></p> </td> </tr></table>




<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(ii)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>discuss with the management of the Corporation and its affiliates, any affected party and the external auditors, such accounts, records and other matters as any member of the Audit Committee considers necessary and appropriate;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(iii)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>engage independent counsel and other advisors as it determines necessary to carry out its duties; and</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(iv)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>to set and pay the compensation for any advisors employed by the Audit Committee.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The Audit Committee shall, at the earliest opportunity after each meeting, report to the Board the results of its activities and any reviews undertaken and make recommendations to the Board as deemed appropriate.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in;page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The Audit Committee shall:</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(i)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>review the audit plan with the Corporation&#146;s external auditors and with management;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(ii)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Review with the independent auditors the matters required to be discussed relating to the conduct of the audit, including (a) the proposed scope of their examination, with emphasis on accounting and financial areas where the Committee, the independent auditors or management believes special attention should be directed; (b) the results of their audit, including their audit findings report and resulting letter, if any, of recommendations for management; (c) their evaluation of the adequacy and effectiveness of the Company&#146;s internal controls over financial reporting; (d) significant areas of disagreement, if any, with management; (e) co-operation received from management in the conduct of the audit; (f) significant accounting, reporting, regulatory or industry developments affecting the Company; and (g) review any proposed
changes in major accounting policies or principles proposed or contemplated by the independent auditors or management, the presentation and impact of material risks and uncertainties and key estimates and judgements of management that may be material to financial reporting;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(iii)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>review with management and with the external auditors material financial reporting issues arising during the most recent fiscal period and the resolution or proposed resolution of such issues;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(iv)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>review any problems experienced or concerns expressed by the external auditors in performing an audit, including any restrictions imposed by management or material accounting issues on which there was a disagreement with management;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(v)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>review with senior management the process of identifying, monitoring and reporting the principal risks affecting financial reporting;</font></p> </td> </tr></table>
<BR><BR>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-31-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.5in;text-align:justify;'><font size=2>&nbsp;</font></p>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(vi)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>
review audited annual financial statements  (including management discussion and
analysis) and related  documents in conjunction  with the report of the external
auditors and obtain an  explanation  from  management of all material  variances
between comparative reporting periods. Without restricting the generality of the
foregoing,  the  committee  will discuss  with  management  and the  independent
auditors  to  the  extent  required,  any  issues  and  disclosure  requirements
regarding (a)  the  use  of  &#147;pro  forma&#148;   or   &#147;adjusted&#148;   non-GAAP
information,  as well as financial information and earnings guidance provided to
analysts and rating agencies,  (b) any off balance sheet  arrangements,  and (c)
any going concern qualification.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(vii)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>consider and review with management, the internal control memorandum or management letter containing the recommendations of the external auditors and management&#146;s response, if any, including an evaluation of the adequacy and effectiveness of the internal financial controls of the Corporation and subsequent follow-up to any identified weaknesses;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(viii)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>review with financial management and the external auditors the quarterly unaudited financial statements and management discussion and analysis before release to the public;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(ix)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>before release, review and if appropriate, recommend for approval by the Board, all public disclosure documents containing audited or unaudited financial information, including any prospectuses, annual reports, annual information forms, management discussion and analysis and press releases; and</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(x)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>oversee, any of the financial affairs of the Corporation or its affiliates, and, if deemed appropriate, make recommendations to the Board, external auditors or management.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in;page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(e)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The Audit Committee shall:</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(i)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>evaluate the independence and performance of the external auditors and annually recommend to the Board the appointment of the external auditor or the discharge of the external auditor when circumstances are warranted and monitor the audit partners&#146; rotation as required by law.;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(ii)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>consider the recommendations of management in respect of the appointment of the external auditors;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(iii)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>pre-approve all non-audit services to be provided to the Corporation or its subsidiary entities by its external auditors&#146;, or the external auditors of affiliates of the Corporation subject to the over-riding principle that the external auditors not being permitted to be retained by the Corporation to perform specifically listed categories of non-audit services as set forth by the Securities and Exchange Commission as well as internal audit outsourcing services, financial information systems work and expert services. Notwithstanding, the foregoing the pre-approval of non-audit services may be delegated to a member of the Audit Committee, with any decisions of the member with the delegated authority reporting to the Audit Committee at the next scheduled meeting;</font></p> </td> </tr></table>
<BR><BR>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-32-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.5in;text-align:justify;'><font size=2>&nbsp;</font></p>




<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(iv)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>approve the engagement letter for non-audit services to be provided by the external auditors or affiliates, together with estimated fees, and considering the potential impact of such services on the independence of the external auditors;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(v)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>
when there is to be a change of external auditors, review all issues and provide
documentation related to the change, including the information to be included in
the Notice of Change of  Auditors  and  documentation  required  pursuant to the
then  current  legislation,   rules,  policies  and  instruments  of  applicable
regulatory  authorities and the planned steps for an orderly  transition period;
and</font></p> </td> </tr></table>




<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(vi)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>review all reportable events, including disagreements, unresolved issues and consultations, as defined by applicable securities policies, on a routine basis, whether or not there is to be a change of external auditors.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(f)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The Audit Committee shall enquire into and determine the appropriate resolution of any conflict of interest in respect of audit or financial matters, which are directed to the Audit Committee by any member of the Board, a shareholder of the Corporation, the external auditors, or senior management.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(g)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The Audit Committee shall periodically review with management the need for an internal audit function.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(h)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The Audit Committee shall review the Corporation&#146;s accounting and reporting of costs, liabilities and contingencies.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in;page-break-after:avoid'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(i)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The Audit Committee shall establish and maintain procedures for:</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(i)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the receipt, retention and treatment of complaints received by the Corporation regarding accounting controls, or auditing matters; and </font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(ii)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the confidential, anonymous submission by employees of the Corporation or concerns regarding questionable accounting or auditing matters.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(j)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The Audit Committee shall review and approve the Corporation&#146;s hiring policies regarding employees and former employees of the present and former external auditors.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(k)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The Audit Committee shall review with the Corporation&#146;s legal counsel, on no less than an annual basis, any legal matter that could have a material impact on the Corporation&#146;s financial statements, and any enquiries received from regulators, or government agencies.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p  style='margin-left:0in;text-indent:0in; '><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(l)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The Audit Committee shall assess, on an annual basis, the adequacy of this Mandate and the performance of the Audit Committee.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>5.</B> </FONT></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Date of Mandate</font></b></p> </td> </tr></table>


<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>This Mandate was initially approved by the Board on September 3, 1999. Subsequent to that date, the Board has amended and restated this Mandate on each of December 13, 2002 April 23, 2003, March 5, 2004 and December 8, 2004. This Mandate is effective from and after December 14, 2006.</font></p>
<BR><BR>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>
<BR>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-33-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>



<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><i><b><font size=2>Composition of the Audit Committee</font></b></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>The following table sets forth the name of each of the current members of the Audit Committee, whether such member is independent, whether such member is financially literate and the relevant education and experience of such member.</font></p>
<BR><BR>





<table border="0" cellspacing=0 cellpadding=0 width="638" style=' border-collapse:collapse'>
    <tr>
        <td width="151" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p  align=center style='margin-bottom:0in;text-align:center;padding:0in'><b><font  size=1>Name</font></b></p>  </div>  </td>
        <td width="80" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p  align=center style='margin-bottom:0in;text-align:center;padding:0in'><b><font  size=1>Independent</font></b></p>  </div>  </td>
        <td width="72" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p  align=center style='margin-bottom:0in;text-align:center;padding:0in'><b><font  size=1>Financially Literate</font></b></p>  </div>  </td>
        <td width="335" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <div style='border-bottom:solid black .5pt;padding:0in 0in 1.0pt 0in'>
<p  align=center style='margin-bottom:0in;text-align:center;padding:0in'><b><font  size=1>Relevant Education and  Experience</font></b></p>  </div>  </td> </tr>
    <tr>
        <td width="151" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-bottom:0in;text-align:center'><font size=1>&nbsp;</font></p>  </td>
        <td width="80" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-bottom:0in;text-align:center'><font size=1>&nbsp;</font></p>  </td>
        <td width="72" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-bottom:0in;text-align:center'><font size=1>&nbsp;</font></p>  </td>
        <td width="335" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-bottom:0in;text-align:center'><font size=1>&nbsp;</font></p>  </td> </tr> </table>



<table border="0" cellspacing=0 cellpadding=0 width="638" style=' border-collapse:collapse'>
    <tr>
        <td width="151" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=left style='text-align:left; page-break-after:avoid'><font size=1>Fred A. Stewart, Q.C.</font><br> <font size=1>(Chairman)</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='text-align:center;page-break-after:avoid'><font size=1>Yes</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='text-align:center;page-break-after:avoid'><font size=1>Yes</font></p> </td>
        <td width="335" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>Mr.&nbsp;Stewart graduated with Bachelor of Commerce (Saskatchewan) and Bachelor of Laws (Toronto) and practised corporate and commercial law for over 20 years, receiving his Queen&#146;s Counsel designation in 1980. Mr.&nbsp;Stewart served as a Member of Cabinet in the Government of Alberta. In addition, Mr.&nbsp;Stewart has acquired significant financial experience and exposure to accounting and financial issues as a founding partner of his law firm,  as a Member of the Treasury Board of the Government of Alberta and while serving as a director and audit committee member of both private and public companies. </font>  </p> </td> </tr>
    <tr>
        <td width="151" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=left style='margin-bottom:0in; text-align:left'><font size=1><BR>Robert B. Schultz F.C.A.</font></p>
<p  align=left style='text-align:left'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='text-align:center'><font size=1><BR>Yes</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='text-align:center'><font size=1><BR>Yes</font></p> </td>
        <td width="335" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=left style='margin-bottom:.25in;text-align:left; '><font size=1>
<BR>Mr.&nbsp;Schultz is a Fellow of the Chartered Accountants and is currently Chairman and Director of Rockwater Capital Corporation (a financial services company). Mr.&nbsp;Schultz has served as Chairman and Chief Executive Officer of Merrill Lynch Canada (a public financial services company) and as Chief Executive Officer of Midland Walwyn. Through his various roles as Chairman and Chief Executive Officer, Mr.&nbsp;Schultz has supervised the individual engaged in preparing, analyzing or evaluating financial statements. Mr.&nbsp;Schultz has also served as a director with several other public companies.</font></p> </td> </tr>
    <tr>
        <td width="151" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=left style='margin-bottom:0in; text-align:left'><font size=1>Jim Dinning </font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='text-align:center'><font size=1>Yes </font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='text-align:center'><font size=1>Yes</font></p> </td>
        <td width="335" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=left style='margin-bottom:.25in;text-align:left; '><font size=1>Mr.&nbsp;Dinning is currently Chair of the Board of Western Financial Group. He graduated with a bachelor of commerce honours degree and a master&#146;s degree in public administration from Queen&#146;s University. Mr.&nbsp;Dinning served as a Member of the Legislative Assembly of the Province of Alberta from 1986 to 1997. Mr.&nbsp;Dinning has acquired significant financial experience and exposure to accounting and financial issues while serving as a director and audit committee chair/member for other publicly traded companies and as Provincial Treasurer for the Alberta Provincial Government.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-34-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>RISK FACTORS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>All of our potential products, including REOLYSIN<sup>&reg;</sup>, are in the research and development stage and will require further development and testing before they can be marketed commercially.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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>&reg;</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>&reg;</sup> will prove to be safe and effective in humans. REOLYSIN<sup>&reg;</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>&reg;</sup> commercially. There can be no assurance that the research and
development programs we conducted will result in REOLYSIN<sup>&reg;</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. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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&reg; is a safe, effective treatment for cancer, we may be required to abandon further development of the product and develop a new business strategy.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>There are inherent risks in pharmaceutical research and development.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the discovery of unexpected toxicities or lack of sufficient efficacy of products which make them unattractive or unsuitable for human use;</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>preliminary results as seen in animal and/or limited human testing may not be substantiated in larger, controlled clinical trials;</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>manufacturing costs or other production factors may make manufacturing of products ineffective, impractical and non-competitive;</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>proprietary rights of third parties or competing products or technologies may preclude commercialization;</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>requisite regulatory approvals for the commercial distribution of products may not be obtained; and</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>



<p style='page-break-before:always'></p>
<BR>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-35-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>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. </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>Pharmaceutical products are subject to intense regulatory approval processes.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The U.S. FDA 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</font><font size=2> </font><font size=2>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. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The FDA and other governmental regulators have increased requirements for drug purity and have increased environmental burdens upon the pharmaceutical industry. Because pharmaceutical drug manufacturing is a highly regulated industry, requiring significant documentation and validation of manufacturing processes and quality control assurance prior to 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. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-36-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>Our operations and products may be subject to other government manufacturing and testing regulations.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The products we anticipate manufacturing will have to comply with the FDA&#146;s current Good Manufacturing Practices (</font><b><font size=2>&#147;cGMP&#148;</font></b><font size=2>) 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. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The FDA or other regulatory agencies may also require the submission of any lot of a particular product for inspection. If the lot product fails to meet the FDA requirements, then the FDA could take any of the following actions: (i) restrict the release of the product; (ii) suspend manufacturing of the specific lot of the product; (iii) order a recall of the lot of the product; or (iv) order a seizure of the lot of the product. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>The biotechnology industry is extremely competitive and we must successfully compete with larger companies with substantially greater resources.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-37-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We anticipate that we will face increased competition in the future as new products enter the market and advanced technologies become available. There can be no assurance that existing products or new products developed by our competitors will not be more effective, or be more effectively manufactured, marketed and sold, than any that may be developed or sold by us. Competitive products may render our products obsolete and uncompetitive prior to recovering research, development or commercialization expenses incurred with respect to any such products.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>We rely on patents and proprietary rights to protect our technology.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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;. 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. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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 months after filing of the original priority application, and since publication of discoveries in the scientific or patent literature tends to lag behind actual discoveries by several months, we cannot be certain that we or any licensor were the first to create inventions claimed by pending patent applications or that we or the licensor were the first to file patent applications
for such inventions. Loss of patent protection could lead to generic competition for these products, and others in the future, which would materially and adversely affect our financial prospects for these products. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Similarly, since patent applications filed before November 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. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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 </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-38-</font></p>
<BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>Our products may fail or cause harm, subjecting us to product liability claims.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Use of our product during current clinical trials may entail risk of product liability. We maintain clinical trial liability insurance; however, it is possible this coverage may not provide full protection against all risks. Given the scope and complexity of the clinical development process, the uncertainty of product liability litigation, and the shrinking capacity of insurance underwriters, it is not possible at this time to assess the adequacy of current clinical trial coverage, nor the ability to secure continuing coverage at the same level and at reasonable cost in the foreseeable future. While we carry, and intend to continue carrying amounts believed to be appropriate under the circumstances, it is not possible at this time to determine the adequacy of such coverage.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In addition, the sale and commercial use of our product entails risk of product liability. We currently do not carry any product liability insurance for this purpose. There can be no assurance that we will be able to obtain appropriate levels of product liability insurance prior to any sale of our pharmaceutical 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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>We have limited manufacturing experience and intend to rely on third parties to commercially manufacture our products, if and when developed.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>To date, we have relied upon a contract manufacturer to manufacture small quantities of REOLYSIN<sup>&reg;</sup>. The manufacturer may encounter difficulties in scaling up production, including production yields, quality control and quality assurance. Only a limited number of manufacturers can supply therapeutic viruses and failure by the manufacturer to deliver the required quantities of REOLYSIN<sup>&reg;</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>&reg;</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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>New products may not be accepted by the medical community or consumers.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>Our technologies may become obsolete.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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 </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style='page-break-before:always'></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>
<BR>



<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-39-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>commitments. Our failure to develop new technologies and products and the obsolescence of existing technologies could adversely affect our business. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>We are highly dependent on third party relationships for research and clinical trials.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>We have no operating revenues and a history of losses.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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 31, 2006, we had an accumulated deficit of approximately $65 million. We have incurred net losses of approximately $14.3 million, $12.8 million and $13.0 million for the years ended December 31, 2006, 2005, and 2004, respectively. 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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>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></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>As of December 31, 2006, we had cash and cash equivalents (including short-term investments) of $27.6 million and working capital of approximately $25.7 million. On February 22, 2007, we received gross proceeds of approximately $10,590,000 for the issuance of 4,000,000 units whereby each unit consisted of one common share and one half of one common share purchase warrant (see &#150; &#147;</font><i><font size=2>Recent Developments</font></i><font size=2>&#148;). 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 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 </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-40-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>The cost of director and officer liability insurance may increase substantially and may affect our ability to retain quality directors and officers.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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 may limit our ability to attract and maintain directors and officers as required to conduct our business.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>We are dependent on our key employees and collaborators.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We presently carry key man insurance in the amounts of $1,500,000, $1,000,000 and $500,000 for Dr.&nbsp;Thompson, Dr.&nbsp;Coffey and Mr.&nbsp;Ball, respectively.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>Our share price may be highly volatile.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>We incur some of our expenses in foreign currencies and therefore we are exposed to foreign currency exchange rate fluctuations.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We incur some of our manufacturing, clinical, collaborative and consulting expenses in foreign currencies, primarily the U.S. dollar and the Great British pound (&#147;GBP&#148;). Over the past few years the Canadian dollar has appreciated relative to the U.S. dollar and the GBP thereby decreasing the Canadian dollar equivalent. However, if this trend reverses, our Canadian dollar equivalent costs will increase. Also, as we expand to other foreign jurisdictions there may be an increase in our foreign exchange exposure.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>We earn interest income on our excess cash reserves and are exposed to changes in interest rates.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>
<BR>

<p style='page-break-before:always'></p>
<BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-41-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>ADDITIONAL INFORMATION</font></B></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Legal Proceedings</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>We are not aware of any material legal proceedings nor are we aware of any such proceedings being contemplated.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Interest of Management and Others in Material Transactions</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Other than as discussed herein, there are no material interests, direct or indirect, of directors, executive officers, senior officers, or any direct or indirect shareholder of ours who beneficially owns, or who exercises control over, more than 10% of our outstanding common shares or any known associate or affiliate of such persons, in any transaction within the three most recently completed financial years or during the current financial year that has materially affected or will materially affect us.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Transfer Agent and Registrar </font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>The transfer agent and registrar for our common shares is Computershare Trust Company of Canada at its principal offices in Calgary, Alberta and Toronto, Ontario.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Material Contracts</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Other than as discussed herein, there are no material contracts, other than contracts entered into in the ordinary course of business, that are material to us that were entered into within the most recently completed financial year, or before the most recently completed financial year but are still in effect.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Interests of Experts</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Ernst &amp; Young </font><font SIZE=2>LLP</font><font size=2>, Chartered Accountants, have audited our financial statements for the year ended December 31, 2006, as set forth in our Annual Report.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>As at the date hereof, the partners and associates of Ernst &amp; Young </font><font SIZE=2>LLP</font><font size=2>, Chartered Accountants, our independent auditors, as a group did not beneficially own any of our outstanding common shares. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>External Auditor Service Fees</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>During the financial years ended December 31, 2006, 2005, and 2004, Ernst &amp; Young </font><font SIZE=2>LLP</font><font size=2> received the following fees:</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr >
        <td width="167" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:3.0pt;margin-right:0in;margin-bottom: 0in;margin-left:0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="4" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:3.0pt;margin-right:0in; margin-bottom:0in;margin-left:0in;text-align:center'><b><font size=2>December 31,</font></b></p> </td>
        <td  width="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td  colspan="2" valign=top style=' border-bottom:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p  align=left style='margin-top:3.0pt;margin-right:0in; margin-bottom:0in;margin-left:0in;text-align:left'><font size=1>&nbsp;</font></p>
<p  align=left style='margin-top:3.0pt;margin-right:0in; margin-bottom:0in;margin-left:0in;text-align:left'><font size=2>Item</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:3.0pt;margin-right:.05in; margin-bottom:0in;margin-left:0in;text-align:center'><b><font size=2>2006</font></b></p>
<p  align=center style='margin-top:3.0pt;margin-right:.05in; margin-bottom:0in;margin-left:0in;text-align:center'><b><font size=2>$</font></b></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:3.0pt;margin-right:.05in; margin-bottom:0in;margin-left:0in;text-align:center'><b><font size=2>2005</font></b></p>
<p  align=center style='margin-top:3.0pt;margin-right:.05in; margin-bottom:0in;margin-left:0in;text-align:center'><b><font size=2>$</font></b></p> </td>
        <td  colspan="2" style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:3.0pt;margin-right:.05in; margin-bottom:0in;margin-left:0in;text-align:center'><b><font size=2>2004</font></b></p>
<p  align=center style='margin-top:3.0pt;margin-right:.05in; margin-bottom:0in;margin-left:0in;text-align:center'><b><font size=2>$</font></b></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
            <p  align=left style='margin-top:3.0pt;margin-right:0in; margin-bottom:0in;margin-left:0in;text-align:left'><font size=2>Audit fees</font>                                              </p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:3.0pt;margin-right:.05in; margin-bottom:0in;margin-left:0in;text-align:center'><font size=2>79,900</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:3.0pt;margin-right:.05in; margin-bottom:0in;margin-left:0in;text-align:center'><font size=2>63,500</font></p> </td>
        <td  colspan="2" style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:3.0pt;margin-right:.05in; margin-bottom:0in;margin-left:0in;text-align:center; text-indent:9.0pt'><font size=2>60,460</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=left style='margin-bottom:0in; text-align:left'><font size=2>Audit-related fees <sup>(1),(3), (4)</sup></font>    </p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-bottom:0in;text-align:center'><font size=2>32,260</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-bottom:0in;text-align:center'><font size=2>20,250</font></p> </td>
        <td  colspan="2" style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-bottom:0in;text-align:center'><font size=2>33,354</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=left style='margin-bottom:0in; text-align:left'><font size=2>Tax fees <sup>(2)</sup></font>                                       </p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-bottom:0in;text-align:center'><font size=2>8,214</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-bottom:0in;text-align:center'><font size=2>9,048</font></p> </td>
        <td  colspan="2" style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-bottom:0in;text-align:center'><font size=2>22,150</font></p> </td> </tr>
    <tr style='height:16.65pt'>
        <td  colspan="2" valign=top style=' border-bottom:solid black .5pt;padding:0in 5.4pt 0in 5.4pt;height:16.65pt'>
            <p  align=left style='text-align:left'><font size=2>All other fees</font>                               </p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:16.65pt'>
            <p  align=center style='text-align:center'><font size=2>&#151;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:16.65pt'>
            <p  align=center style='text-align:center'><font size=2>&#151;</font></p> </td>
        <td  colspan="2" style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:16.65pt'>
            <p  align=center style='text-align:center'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="167" ></td>

        <td width="2" ></td>

        <td width="90" ></td>

        <td width="90" ></td>

        <td width="69" ></td>

        <td width="2" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>
<BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-42-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:12pt;text-align:justify;'>
<b><font size=2>Notes:</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 3.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>(1)</font></p> </td>
        <td  valign=top style='padding:0in 0in 3.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>Includes review of interim financial statements, accounting consultations and subscription to on-line accounting.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 3.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>(2)</font></p> </td>
        <td  valign=top style='padding:0in 0in 3.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>Comprised of tax return preparation, scientific research and development return and other tax consultation fees.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 3.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>(3)</font></p> </td>
        <td  valign=top style='padding:0in 0in 3.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>Includes fees associated with matters relating to the prospectus offerings in 2004.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>(4)</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>Includes fees associated with preliminary internal control work for Sarbanes Oxley Section 404.</font></p> </td> </tr></table>


<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><i><b><font size=2>Audit Fees </font></b></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Audit fees were for professional services rendered by Ernst &amp; Young, </font><font SIZE=2>LLP</font><font size=2> for the audit of our annual financial statements and services provided in connection with statutory and regulatory filings or engagements. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><i><b><font size=2>Audit-Related Fees </font></b></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Audit-related fees were for assurance and related services reasonably related to the performance of the audit or review of the annual statements and are not reported under the heading Audit Fees above. These services consisted of accounting consultations, assistance with prospectus filings and assistance with preparations for compliance with section 404 of the </font><i><font size=2>Sarbanes-Oxley Act of 2002</font></i><font size=2>. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><i><b><font size=2>Tax Fees </font></b></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Tax fees were for tax compliance and professional tax consultations. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><i><b><font size=2>All Other Fees</font></b></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>There were no fees paid to Ernst &amp; Young, </font><font SIZE=2>LLP</font><font size=2> that would be considered All Other Fees in 2004 or 2003. Fees to be disclosed under this category would be for products and services other than those described under the headings Audit Fees, Audit-Related Fees and Tax Fees above. </font><font size=2> </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Other Additional Information</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Additional information, including information as to our directors&#146; and officers&#146; remuneration and indebtedness, principal holders of our securities, options to purchase securities and interests of insiders in material transactions is contained in our Information Circular for our most recent annual meeting of shareholders that involved the election of directors, which is incorporated herein by reference and forms an integral part of this Annual Information Form.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Additional financial information is contained in our financial statements for the year ended December 31, 2006 and under the heading &#147;Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations&#148; in our 2006 Annual Report, which are incorporated herein by reference and form an integral part of this Annual Information Form.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>The documents referred to above as well as additional information relating to us is available through the Internet on the Canadian System for Electronic Document Analysis and Retrieval (&#147;SEDAR&#148;) at www.sedar.com.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Alternatively, a request for any documents referred to above may be made to the Chief Financial Officer, Oncolytics Biotech Inc., Suite 210, 1167 Kensington Crescent N.W., Calgary, Alberta, Canada, T2N 1X7 or by telecopier at (403) 283-0858.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-43-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>GLOSSARY</font></B></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><i><font size=2>In this Annual Information Form, unless the context otherwise requires, the following words and phrases shall have the meaning set forth below:</font></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><B><font SIZE=2>ABCA </font></B><font size=2>- </font><i><font size=2>Business Corporations Act</font></i><font size=2> (Alberta), as amended.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><B><font SIZE=2>ACB</font></B><font size=2> - Alberta Cancer Board.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Activating mutations </font></b><font size=2>&#150; a type of genetic mutation that results in a particular protein being active in the absence of an appropriate stimuli. This type of mutation typically leads to the development of a cancerous transformation of a cell.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Adjuvant therapy </font></b><font size=2>- a form of therapy that is to be used in conjunction with one or more addition therapies.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Alberta Heritage Foundation </font></b><font size=2>&#150; the Alberta Heritage Foundation for Medical Research.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Animal model </font></b><font size=2>- a human disease given to an animal which exhibits similar or identical characteristics to this disease in humans.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Appropriate Regulatory Authority </font></b><font size=2>&#150; means (a) Health Canada, (b) the Food and Drug Administration in the United States, or (c) the comparable authorities in the following countries or areas:  United Kingdom, France, Germany, Japan, Benelux.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Asymptomatic </font></b><font size=2>&#150; without any signs or symptoms.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Cancer </font></b><font size=2>- a heterogeneous group of diseases that is characterized by the uncontrolled or aberrant growth of cells. In addition to the uncontrolled growth of these tumour cells, these cells are able to invade and colonize other sites in the body; by definition these tumours are malignant.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Carcinomas </font></b><font size=2>&#150; a type of cancer that arises from epithelial tissue.</font></p>

<p style=' margin-bottom:5pt; margin-top:5pt;text-align:left;'><B><font SIZE=2>CEA</font></B><font size=2> &#150; Carcinoembryonic antigen &#150; a </font><font size=2>substance that is sometimes found in an increased amount in the blood of people who have certain cancers, other diseases, or who smoke. It is used as a tumor marker for colorectal cancer. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Cellular proliferative disorder </font></b><font size=2>- a heterogeneous group of disease characterized by the uncontrolled or aberrant growth of cells; is distinct from cancer in that it does not necessarily imply a malignant state.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Clinical Trial Agreement </font></b><font size=2>- the agreement among Oncolytics Biotech Inc., Dr.&nbsp;Don Morris and the ACB dated May 1, 1999, providing for, among other things, a repayable grant of $200,000 to us to offset the future REOLYSIN<sup>&reg;</sup> clinical trial expenditures. (this also refers to our NCI arrangement)</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><B><font SIZE=2>CT</font></B><font size=2> &#150; computed tomography </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Cytostatic </font></b><font size=2>- any drug or agent that is capable of preventing a cell&#146;s growth and division.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Cytotoxic </font></b><font size=2>- any drug or agent that is capable of causing cell death.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Differentiation </font></b><font size=2>&#150; a form of growth; a process whereby a cell develops different or more advanced processes than were possessed by the cell before.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>
<BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-44-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><B><font SIZE=2>DLT</font></B><font size=2> &#150; Dose-Limiting Toxicity</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Epidermal growth factor </font></b><font size=2>- a compound that promotes the growth of cells.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Epidermal growth factor receptor </font></b><font size=2>&#150; the cellular receptor that interacts with the epidermal growth factor; a particular family of receptor tyrosine kinase.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Epithelial </font></b><font size=2>- the tissue that forms the outer layer of the body surface or the tissue that lines the gut or other hollow structure.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Etiology </font></b><font size=2>&#150; the reason or causation of an illness, disease or disorder.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><B><font SIZE=2>FDA</font></B><font size=2> &#150; the U.S. Food and Drug Administration</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><B><font SIZE=2>GAAP</font></B><font size=2> &#150; Generally Accepted Accounting Principles</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Gastrointestinal tract </font></b><font size=2>- within the digestive system including the stomach, intestine, and all accessory organs.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Glioblastoma </font></b><font size=2>- a specific form of cancer derived from brain tissue.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Gliomas </font></b><font size=2>- a specific form of cancer derived from brain tissue.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><B><font SIZE=2>GGT</font></B><font size=2> &#150; Gamma-Glutamyl Transpeptidase - is a liver enzyme. It is involved in the transfer of amino acids across the cellular membrane and in glutathione metabolism. GGT is found in high concentrations in the liver, bile ducts and kidney. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><B><font SIZE=2>GLP</font></B><font size=2> &#150; Good Laboratory Practice</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Good Manufacturing Practices </font></b><font size=2>- the current regulatory requirements and standards regarding quality assurance procedures to be adhered to in the manufacturing of therapeutic products established and monitored by various governments including Canada and the United States.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Growth factor receptor </font></b><font size=2>&#150; a form of receptor that interacts with growth factors.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Gy</font></b><font size=2> &#150; a measurement of dosage of radiation.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>HER2/neu/ErbB2 </font></b><font size=2>&#150; a form of receptor tyrosine kinase that is frequently overexpressed in breast cancers.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Immune competent </font></b><font size=2>- an animal with a fully functional immune system; an animal that can mount a response to a foreign or infectious agent.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Immuno-compromised </font></b><font size=2>- an animal that is lacking an immune system.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Investigational New Drug Submission (&#147;IND&#148;) </font></b><font size=2>- documentation filed with government agencies responsible for evaluating and licensing pharmaceutical drugs. This documentation is necessary for the initiation of clinical trials.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><i><b><font size=2>In Vivo</font></b></i><b><font size=2> </font></b><font size=2>- in the living body.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Lesion </font></b><font size=2>- a morbid change in the functioning or texture of an organ or tissue.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-45-</font></p>
<BR>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Metastasis </font></b><font size=2>- the process whereby a tumour cell is able to leave the original tumour mass and spread to secondary sites in the body forming additional tumour sites.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><B><font SIZE=2>MHRA</font></B><font size=2> - </font><font size=2>Medicines and Healthcare products Regulatory Agency (U.K.)</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Mitogenic </font></b><font size=2>- a drug or agent that promotes cellular division or growth.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><B><font SIZE=2>MTD</font></B><font size=2> &#150; Maximum Tolerated Dose</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Neoplasia</font></b><font size=2> &#150; a group of diseases characterized by uncontrolled cell growth, including, but not limited to, cancer.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Nucleus </font></b><font size=2>- an organelle in the cell that contains genetic material.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Oncology </font></b><font size=2>- the study and treatment of cancer and tumours.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Patent Cooperation Treaty or PCT </font></b><font size=2>- an international patent treaty, of which Canada is a signatory, whereby a single international patent application can be filed in the applicant&#146;s or inventor&#146;s home country for possible protection of intellectual property in over 100 PCT member countries.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>PKR (or double stranded RNA dependent protein kinase)</font></b><font size=2> - a host protein that plays a key role in mediating the cell&#146;s antiviral activity.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Platelet-derived growth factor receptor (PDGFR) </font></b><font size=2>- the cellular receptor that interacts with the platelet-derived growth factor; a particular family of receptor tyrosine kinase.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><B><font SIZE=2>PSA</font></B><font size=2> &#150; Prostate Specific Antigen is a protein produced by the cells of the prostate gland.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Ras </font></b><font size=2>- a cellular protein that is a key relay in the transmission of growth signals from the outside of the cell to the cell&#146;s nucleus. In a noncancerous cell, Ras is activated in the presence of an appropriate growth signal.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Receptor </font></b><font size=2>- a cellular structure, usually found on the cell surface, that can interact with a certain compound to elicit a specific type of cellular response.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Receptor tyrosine kinase (RTK) </font></b><font size=2>- a type of host receptor that uses a particular residue for cellular signaling to the nucleus. Mutation or overexpression of this type of receptor is frequently seen in the development of a variety of cancers.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>REOLYSIN<sup>&reg;</sup> </font></b><font size=2>- is our trademark for the human reovirus for the treatment of a specific disease.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Reovirus </font></b><font size=2>- a double stranded RNA virus first identified in 1959. The name is an acronym for Respiratory Enteric Orphan virus. The virus is given the designate of orphan virus since it is not associated with a known disease state. For the purpose of this document, all reference to reovirus is to reovirus type III Dearing.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Research Contract </font></b><font size=2>- an agreement between Oncolytics Biotech Inc. and the Governors of the University of Calgary, providing for the aggregate sum of $102,000 to be paid by us for a research project under the direction and supervision of Dr.&nbsp;Patrick Lee.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Share Purchase Agreement </font></b><font size=2>- the share purchase agreement among the Vendors, SYNSORB and Oncolytics Biotech Inc. dated April 21, 1999 providing for the purchase by SYNSORB of all of our issued and outstanding shares. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>-46-</font></p>
<BR>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Signal Transduction </font></b><font size=2>- The transmission of signals from the cell surface to the cell&#146;s nucleus.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><B><font SIZE=2>SYNSORB</font></B><font size=2> - SYNSORB Biotech Inc. (now Iteration Energy Ltd. by name change formerly Hawker Resources Inc.), a public Company incorporated under the ABCA.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Technology Commercialization Agreement </font></b><font size=2>- the agreement between Oncolytics Biotech Inc. and the Alberta Heritage Foundation dated February 9, 1999 providing for a repayable grant of $150,000 to us to offset reovirus clinical trial expenditures.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>TCID<sub>50</sub> &#150; </font></b><font size=2>a measure of viral particle concentration.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Toxicology </font></b><font size=2>- the scientific determination of the quantity of a substance that is required to act adversely in the body.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Tumour </font></b><font size=2>- an abnormal growth of tissue whether benign or malignant.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>Vendors</font></b><font size=2> - Dr.&nbsp;Patrick Lee, Dr.&nbsp;James Strong, Dr.&nbsp;Matthew Coffey, Dr.&nbsp;Bradley Thompson and University Technologies International Inc.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>
<BR><BR>


</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>5
<FILENAME>img2.gif
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 img2.gif
M1TE&.#=AZ`$L`7<``"'^&E-O9G1W87)E.B!-:6-R;W-O9G0@3V9F:6-E`"P`
M````Z`$L`84````1$1$``#,`,P``,S,S```S`#,S,P`S,S,B(B(S,V8S9C,S
M9F9$1$15555F,S-F,V9F9C-F9F9W=W=F9IEFF69FF9F99F:99IF9F6:9F9F(
MB(B9F<R9S)F9S,RJJJJ[N[O,F9G,F<S,S)G,S,S=W=W,S/_,_\S,____S,S_
MS/___\SN[N[___\!`@,!`@,!`@,!`@,!`@,!`@,!`@,!`@,!`@,!`@,!`@,!
M`@,!`@,!`@,!`@,!`@,!`@,!`@,&_\"6<$@L&H_(I'+);#J?T*AT2JU:K]BL
M=LOM>K_@L'A,+IO/Z+1ZS6Z[W_"X?$ZOV^_XO'[/[_O_9"`A'H,D)6`D@(J+
MC(V.<"D$$AD4&1@($8=="(^=GI^@H4PH!482$J*IJJNLK4<F!T8=!JZUMK>X
M>BL"1AJ<0AL($@X('T,E$@T2"!K`#D02%RT?OQL.#0@D)+]"$\TM(`\(RKGE
MYN>=I(<L0KZ)+20/QPF:!-)"Q2TE`.SX'BV^A"SK1Z+4D`C?LK5@@>`>NH<0
M(](I>$I"@@+O\'4@\J#9!WE#-("4\"T@P%^GAG@`0$3!B&GTAJ"02+.F33,D
M"`QA:&P(!/]A%1%,:#$!U9!M[48:-9E22$%H"1%LR'BSJM6K54(8%'+"P(DA
M`T048==T2`(A#/45F'E2X+<6(W@->?!/"#($S+#JW<O7R`B=1$3.?1NX06"0
M+1!P&&&X'4JC\%@.01#"2$&J?3-KELAAZ^0-0CH@T'09WSL6#=Z.2)#7L4#(
M);:2"/"/Q%FN`31MWLV[W`AN0T`DZ$<MPK*W'`Z0?&"!"(L$,5VW*$MT`88*
M&`94;B$.>[3>X,/7-+'B2`G=1504*;_0"#)VZF5>F(!9O/W[^//KW\^_O___
M``8HX(`$%FC@@4Z0`)H3&KR$X(,0\O%!`(0EH4$`%$2HX89U;`#_F1(9*,3A
MB"2R,=H2)9Q8XHHLDH&4$MZT*..,7I"4Q(LTYJ@C%=M<8,%\$TQPWC8@[&CD
MD4V`8-@)*HA6`'85B(CDE%2:5D)1%V@PC#$A`%?EESEND`$)#F#F"S(5@JEF
MB0P)@P0))'FYYIP;%B4G$=O82.>>$<(I07U%D'0`H'P6^A]#\?231`@4Q&/H
MH_OY(@$(1<&I`0L!,.%!+*<4510Q:4(JJEX?D)3E!AYF``L3)+#4`&@:Q'H*
MH:/6RM=HC2D!)YFV]GH?"+,N$<(UZ/EJ[&X7N*G$`@6$>NRS?"7`7!(2"'`G
MM-AB98$&%S"00GH.:%"`@]F6NQ<G?J*:_\$I'9"@@+GPZA6"!"60$,(`!2CP
MSI]3H/*!LT,,=86B\19<AI:Q)ER1!)(UH<&8^IR5T@DBC,`6"0Z6"8)NAL"C
M6Y%'?+"@P22'P=!72&"0@<,:F/`G4A>@0I*6`)&$BE`!:3FO!!X\P`(R\R92
M43/)E&ST%S$J@0#!-X[P<C,6?`L/-=-!(X0#)6Q@C`:);'!E(B5$8)M`<&%P
M]-E:I'!M8!\BD:4'%VC3S`9$:R#",Q\:A;77`"6B:@06P%F!"K=E0P+`:">N
MQ`<HV-;3$E*U$`*A2ZNP@#:H9$`T/`M,EPC71D5@P@5?<=V"UQ*(Y7$LW&G3
MG.*P._&G!!@U<?\!`"0PX"R<%W2@G@0LP%GS"*J?(DU)`*D'PN??5B0""A"0
MC6/LU"-A..)#=+!,"@V06[TJCQ_++PM,'Z&!`P\P<``'WXM"0C^P&2N!<9-"
MH6?[G0CGH3&H:*#,:`P92)Z$LHSW_2]\.YI>%):&OTZ08&550X4F)D&"H20"
M*22(`#P0L((+:A!)4CK"!#+E-@8T\!$B^$8!3H`*/^4%`Q'8``M`(`T3/`,I
M&L"`!*)W),$H@0&>,0("0';"10@/&54;"09*\)4+?.!P+4C!#8LQ%!8>:39,
M>,``E*"!#];A9U'4QP?&^`&0D?$#@T@!"3:2N`X\@`)B`\AT)%"4$9#_``):
MDEL+K!@/%#!C&$>2P,B2L`!:*"$"[,-"/X*WO$9BS`'#J$@$(!D!O.!E89"4
MI`,VF<E)<E(9.UR8*$5I2:"(LI*6G-\E9Z6-5KY/1[$Z`M-H)80.(DE)38"`
M%]_$012=\5^>F@`"`F`<4](M81KXE^D8<;B$7:`"I`1``0(0`#H&R1N_E)J!
MM)$MES0A`AE:@K=,L+P/;'(8>('`_,)U`1`LKV/EH\(BG0(V1FK#D>_$YSU;
MZ;'V^'.>_[3"SS!&@HJ1X`*<7,8J(3FF=R8BGD4\1P:>T80&0%`((!BC#HOR
M@`!D,DL="`%;I!`"#80TF1H(4DJC84T)/$`2_^ECF"B+TJE1>H-;&H#F*'?*
M4Y=2DYK3]&@#@L32"OBHI&<L5H)0JK!3%`!?'@U2!CB@@1#X;D1*)9$*&)B$
MGRT/`0)(!@(X"0([/H$=P2/!\N87R61DLB)JC:LCX=D>B+)!4>S8IS9$H%8'
MC'&'],/&*A40`09,2J[D\^<2XLK632*`-<9IAEW_TX#)1J@L)4AFS(H"`./Y
M`C%*"-X8925)`"2`IEK3`%6WHQ<05/5?I?*4!`(05`)><[1-,,&_'$#;J":3
MC'MQ[00VX`$]:<ELT\AC"**6F%@=(K.)&"/(2##&HWP@J^()GH<.((RQ1E(;
M2H5`!=#2GK42=ARG@/^D0[$;H%8N;P*09`U>.,FU%=@U!<L[GTN!$JZX*A8=
M09J./$@"`@>PH(N)P<`VM&88!62@9P?^4ZR(M`T_M>!'N=/F;E2`L61B`QL^
M2@$*-`RY8BRCLYVR:I58$(+1GK@`IE3F2(W``A<+TZ-T_!<M5<&O9$X'8;'B
M!$6-@HH/:L`#A-F&!E*`"B8G9@1:$EA?4H"J4XQCPMSL:@F6UP%=+@.4>,FR
MK5Q)4U02UIWO@VB]7`C*PR:6Q\#@GY9&\,ZJV1EO[?C`/6;57R(G)JX[/L=Y
M_N5=940-94BH5\*$\8`%T)%NBRG"`\9;,.I^`$NKU)P&V+L"JK*4CC,#Q03_
M7J(UHMBM<R#`P`E&0C:%^.P7DNF(\'CU`!/`Q=81(9^6("D,NY&`/4B8H8=X
M36`Q+\$Z<K#L@^16$>6<PH[DBZ>]K"P,![BS!&_VPSLTD8*OW$W5\+"+$(QQ
M.'[UQ&DD\4"3%O(-XYDC>"4MBG$FH"I@TUAN_DM&-"ZE["2(=PPLH"@2FE&O
M*\HJ9M7<-Q&+8*^4%B7AL2P8^89]4V/36`,66%C"7CFP;S!`&@>FI:P6Y"'D
MEK1,[.97<H*G6G#82&WGR2N=A2#B$+"W1)A3)0-2,P(/B/C>Z&:T!I:7;5%M
M.:7HJ\"2D[!F_3;@F2'`M1?:E"RA(.``4C_"`X2&_S&SY;0%!-"&823PDI<]
M(UQPR1#:1S-A"7!@`T,1"C7ZS:*24F`^`!!&Q8^`Y"`%`"@:L/>:4!"S95A@
M<DE`082)@8%D!GH+]S(`O@A0@(4?82F^</0.63`2M7$@'EQK!@38HP)T5RUA
M#M)@`XJ4@9LC28U^PD8RT#CB(JA12PA@P`/*B&TCL7P9#R`)DXY``B1+Z@'T
MH3L8AGF1!)!0"08&2)<RDI;I^!$>8`,-\%H`S=BVP#"P?0<$_-BUQX-IC!.X
MP`#423<V$B&C?C\%W4B\(17D%'W]!90)'F9E+,\A!`)P`,Z'/2T0`?21"1Z@
M8$K''4*@0:ES`ER#1!$P$_]T(44WTS<C0`$K8`(.R`Y\<RS,-E^^-DO`\F5N
M=B`E\"^%%0V`\GN3Q()Z0`J4QU5*X':J00';\0[O\#"J<RG;-EP>\!*3TS$?
MH$Z?(P0B!2\E,`(9AV(D42QJ10G.5E6'HB7+$#<MR"T2\''+Y`<5('E25H,1
M]0684TF0]$3H\3-6ECY5Y7I[05VH)6V'`TH:,&.+4`##T03F-X96`&7"1(>8
MX5H6<$E9DAD1-C-*Q0(H,"_A$H&@0`Y\:`?U$C/"`$XC0!Y'45R$E1H;8Q/4
M-0QQ4SXKD$+&<0$>H'R`D%&1R`>'LP$/D`"G0(5#D$(A$HM[&`J+&$E/9`2C
M6`'_XL4U6;>*+%)\JL0<EW@4.X0)$G!=K4!=%^!H,E0$C:,!UD`2J,@(,Z0-
MRC1TVD!_PJ@'U%6+UC@$^^>*RN`-UW@'N7B&]6$"ZQ)\9E4+!_8`#9`:L3(Y
MB\8`D,1QW]@'P6-E[/)SV"<!"T"/WD`"B+8',V2%#V89#R,,()".C%`"R2)(
M3D!#6^*&_5@')84!RN$-\3$U&_`3=+1TDAA))A62-*<E'_=Y$LD(P((`'D`5
MYT$I1+5IYX$G7;)]&VE$IU"/$_!$[($Y.\>)&AD&(!`,P<)PN'<_N<!D]'(4
MNR9(J'((L4()$6"/(^4_!-B3>=!P#&``MA@<6J(<67*+_UD`-$H%)PT@:R_9
M"1BP`!$)#,-@<:\`9;IT&BZ%EEYY!W[R``Y&`E+3.!/P/R%UE%MP=`CP`%,1
M$2?0&BE@`1W!(_OH%/G0EY]`,5%2DAE14!;1B&3@(<+`C!*Q`A#P#AZ``-[#
M(\8A!"@0?)@I"L$S`0]P#57%%BF`>Z/)EZPR2#1!#3,!E5P@`B)B#6\9FU^9
ME$"1$8J6/F[Y'Z^9""B0&EZ00=\`7\C9"AU4F&/I%%TT1/VA-C/1)=Z8!2YC
M%!Z2G;90;FQXG'Q!G:B!F%0PF::FGKAP`C&##4?&FU@Q7%$DDV1`?@NQ=?99
M#BSF#OGQ(M19!BN@$`I4H$6D$/_I>08BP#I.":$-1#,-J@9T%#'NB:'94GT7
MVIM8P$#4`:+5PRT+L3;^-@#E^027U@(-*I\H&B\-D`A)8S^@)4^_``'N5Z,D
MPH].\*%+$'`K.@41=P4!]J!`JB'7>&!C0(WPL*-.$$)54"KZP*)-*B`@4QX1
M>6`74'#AAB8,IP_`8GE9P"].649,@"A:<"(/@*9;2B`4I0`K\"XI!0\M)#$'
M]A8IT@(.(`T)P)_!]@O19Q9KL02KM@424!D_,J</,G0L$'>'\SD6Q`DP>`Q#
ML11R6@7"DQA%D"(^DP3V]RY:$$NY`ZD/0D??D@VFLR[ZP#IP(W!9\WWCUJE4
M$`(+<B?__E,^5MA%OED%$:>EJMH?1?-G0P</E:4EIKE'W,!D)7`;/K8%'+`R
M-$-\J[<0U(:0+<"!87BEG,!YQ7H@P8,G0U`JIE-<_'(4X08/@G<%'>!U;4,$
M*5(`AR<!9ME_U80%(!"NQ#JNQU*M-5.#0M,V++`!!4``HQHHK;%8K),K`!LO
MRS6PA5H":$=\Q2`BAX,`,/9X?UI]$1LO`CLO2;`"N#.O1'"08T4,24AW&G`;
M$!NR_M&5;9"!^)`$G4&#U@,0NP0%_W*D,@L@*$LP3$.T8T%>.T$%?PJJ2'`O
M*%L$V4`!--L+S7`^02NT*T!D69-)X*`,%S!BD%19!:@`/89:__1(%L:ADD/Z
M"SI+!$#TM-#P&_QI(QO@$%?+'S+#)`YH#.P`$O\"+/!P8`OB,_7C8Q10`A4@
M%DS*!&J*0)\!MR$1#%5P(BAWM\8*#]18%\_(-;^0-0<&2=S!%G^"-7TS'5")
M>TC:#$Q:8$RK-(M)!5BZH99[N=SQ"\B%*^,6>!Y($MNQ-*2;K+-#J/\I!%3*
M`BE!I4)DKU1@(QP0L[.+'R71$QG``!!@K>GUCWLY1VBGID)S`J`WHD[0/=/!
M1AO;$*Z*.+O&F]47`8[[O/GQ@5&0D$C0.(0ZL8DA#HK!'@PQ`8/Z)JBP`"_*
M1:BP533JOGWA6GEP?:<C">_:``=@`/\_.FY;M[A,T$LG:L#'H@$\%`%J&Q*L
M<0I)20P%X`'PU1!28".V0:087"4*\0&=,W`/L(C_D@#*L6D"\:_!\4&OLL+E
M\A33@5SF,T3+(`'!.!T-H)$5UA8\7"[0M**K"0V4`2*=-5G1V@RP(+Q+O";+
MN**$DJ/!I@`%T+Z#0;Q3F\6/HC9%DL1&$,--$,%$X$??,*%F7"X,\5S@2:^W
MX:FM80US'"\HL*X.$(84[##%B;Q]#"UJ'#/[@L.6`4E2HRR''"\+YIK!9QN,
MC(SBNT%E',FV,@RD`7Q'F8NM,:EWS,DD\QL3H"B^8(^))IH30$3^\ZVF3#+4
ML*XR:H5X49#_"F4<Z-&OI#O+B?,1#*`JE@$H<"(,`0S,)>,AM7E=)*`"3$("
M(Z:;MNP&!*',"?0PP9"P#\R[6'Q634!1WXS->X+`4MI=Y`84+K?#`;=#WFL`
M8P(KZR)9UK"+Y$PC;S:75!!+<)<62!&5&V.H_!1+G:-#+3"H)B`/WJ`VP7K/
M)'("L-@"'E``!1P257N!*H!UK$,VI_.U\[+#_8,*C0$\C2$R#CTC5W@`<K'/
MS?!,1+%!U8<QIJHUPB<"*X,*Z8D22VO2)UTB.>0+`0`=`%#1-,<,R/8,&SHO
MYT.1049XR;2]GVBK+3!ZL=*O3]S3?8(``/#`5W?)1U![-,=P'8-]_\'Q/H>0
M`O_P+:2Q$&J5.EA=(@T:@,/DU1QZ:N/\UOB1(GB!AZQHDGA=(@@@>73]UR5#
M.X--V"2#%X@=427PPHO-(43]V/$BIY>B!5L&I:$:V9(=(8?00;O8H#M(?:>1
M"/8E$QJF1TG;#IO,)H@M,Z>9#2:@FI:#4]/PA`^@/1)``8TZ'92P,JB1+%PS
M%/`%3HFA0>:TQ9NM(S+S.65W.ER#%!"#'7JJK<:[$)4E`3.A8YS0$_US*8UA
MI?C<VH!Z"!_`/C*3);%TFD0!&E#$0@PA`A4@#[]0J9PP+.@#$%PCE@4$!17T
M'<D](*A`NB%U>M]0)%%9"9B[$!!0W>%&'_^2P[DOTMV?^JY+("F'_=^;D0AS
M20+L0PFG0Y!S<PAF92][U`SK8I'(L(63HT$(`$W+*C/42,1#^A$$<'6)A.%(
M8EDJ.5T-/1:'D"<<X*7'(6XX;B[$L#WN04585^39TJ_)8H=$@%YMR^3\`4;!
M%EI>T*]1G`1JTP`1H,)4;A5=:`0W?@0W6IU;!#FK'>95887?LB"!%Y<2@%P]
M80SL`0(9`B<84!YCK@7$R01)RN:]T14=]`\H@0(:/+!&81A+4Q1ZR@(C@*=W
M'1@$&.B"SALT=;-5`S&GIPW2$#VVG%G/$#=>8.GFL^:7?N6X<`CAP+0.0&7<
MK:?\TNCEH>=6!-[_6##(`L%:J;X9*2(K!;BQ`%$FFM.`ICIVGZ.ZT8/K5Z`!
M&YT$>('JO0X1RZ0"\-NG._$.+P'+]/$2E<T%O@`!`G<$<1F7TVXKEN0L&E"0
MI7SND&)6Y[-PN7,/N.KNAG+,5D;J]GXH5FD9FFT%"`.Y^[X7Y<JN11!+Y4,W
M;/!9`C_P5]$ISU#+T8?+>$,^IR`/IE,JU>SP-*(V[%`FKQ24@*K:MLHO,_G<
M0]&L'*\C*""M'3;D2V$,G+!+H>=$6B*_9V#E*Z\7*'%'[-`[=A9+>+80*Q!Z
MDUX%PK3S>W'QH#$!V+$`8@'G`=X"(F`SE8H"07FM:U`0B"G+5B`".!_R_TKO
M!FHS%O&D84R"5D.`>&W`$#3K/R7>#&=J%^!%3P0QUB>`'CDY'>LP]FY`::!@
M$JPB#V\D.4U?),P`]Z>0`:"!K@CPF'AD.J=%1_MKJR)Q"O]H#4?O][70%8]7
MW2+2.&*SM/VC8,0K!.JA$,]M%/+0F%-_.G0C01?.^><`R4M`J0`1-W^R*G:F
M('\"&*;1-]<*/*8C,Q@5:KQ/^YDA^*'5.0K!+W@4X421"!S48TDL81+4.0XN
MTNV@.96Q"\JO&<]QU;V0`D&NIZIVA.'F)ZH;BP#Q+2"0F\R@$"*@0<?#4OLG
M6;,?_KD@`::J!D"PD;2(1%2QA6(AF4WG$QJ53O^I5>L5F]5NN5WO%QP6C\<A
M1*E%FI"E)`T;'I?/Z77['9_76Q$:$F)H3W"0L-#P$#%1D8KE(PVA8*!@;;'2
M\A(S4W.3+H*@@*`AP:""T_04-55U-0_B,R%2A766MM;V5E7B0&!W!?<7.%AX
MF$V"-P"-6'F9N5EXQ<%@0-:YVOH:VU*BX"3;^QL\G*T$P43\O!!$?5V=&OW=
MD,07GAZ.1$@"`0%@-[(@(,`!!`TD^%E2#V%"A9A"6'@P`(*$"QJ2.7&C0<(V
M`@4/+O3X$:0<$OGZ@*AXA06)#P\01-C0,61,F3.E?-`W`>87#0H*5'!'TR,(
MH$-)-&@00DX)"0DJY!S_"N^/4"0?0%"U6A7K5:E/JY6(@$"$G9$%WG"E1^+!
M5B(6)E+(X!;N6[ENG9H59E/"$3Q%&Y"P^Z[;WX0L'"#P*VA"@L."LY%0RYC>
M@T"$-!R04!<R,18('A!I%,)#B`\?0(?H(*)#Z=.+,P,#@<`"(A-?,;<.!L)#
M$0V[-52X^`'#:1`:0'`8X<CVK]>3I9C(L*%O"XP9RTK/B%.+!`?)N7='Q`(`
M<RD:$DB=@&`).;\:.H^DA.6/>._+PLYG!NB*!@1/,K;H[R4%_.Q;!H0%ZFNA
MA`19*(&%CFH;$)-\L,`("1(NJ&";(4Z``)#JM"#A`-8@!`:MPSHPX(`$$!`(
M_P$'M`,DHQBI<^8DJ`H0<0H*B<CHL/\0).&K+O0S9\0B#RD!I_V*R("#*#:;
M`L<J-G!"*!*BC*,!#ZO0L04$YFFA@37\\`R9+A[(P,@T"9$`#0DRD,"1X=*0
M8$HB-MC`KP`<W``Y(O[P#(TE8'*PB,L\*P*`09EX4`N;M.`RGWORV<X,/WS<
MP@,#]%*3TSN4E(`$%20XX8+0&BCA@R$>\&"D%`9HP0&_$`BA@@/_<*./HO(9
M084!8O1/"$?$).@!%%((X(,1WLCH@3?PV4Z,/K9@[:(%#U-)`Z2^0`#-3KVE
M(Y`$B!B!@PC*12X"6)$P0-H65FUB"`V06X+"0/8KJ/\%7RYK4+HW`I`.@@_*
MV@^!%-0-@X0`OMR$!`,8_;82^10:@H5_I1/!0#AW/)B%%0`82;=+AXC@#;2T
MP\E>(MB+;8B1M/.WA0\6N*#'BHF`%HQ+.0%`2X@S\:"`.EFXDVBB-;CSZ`V2
M'K.:!HAXH-8%6H"@@Y%($,'IOEB(P(1_C_8OC<X*]<\14*T#NTOIB!"W,PD,
MWJT%;D38+39U]4P[#`3J/*4"L7WFI+H3))J`<,(EDF""PQ._`'$VG9E@A"3<
M8&(%?%4V^[`W-'"1M0?<\*LHPI%"3O,(\'TC50R18L!*OV(4*A")M4@A@1HW
MP8"`OW4/H^=S/!`WE1,7WGW_CH>)OR4$G%$YH,GCZ;C2^5\T<!H+%GJG`OHK
M$K@^>L@8=.*D$JPT_HF>&VG!X!8>:V%!];>P?I$)TFV"<;]`F"#]$HZ^0/TQ
MT4C&+RK0P!).,*9324<H<,O7`(E0@@3:;GO=XPX+"F*Y(ORA.J;3@%N^P*^Q
M(:$C%+)=%8+S$T-\0`%-T$`'8$4.)#3`>A,@0052`*HAQ*J&$O"-TPPS)?0D
M+@444-8:%%`4PF"D+TI"P@&X)T'X0,&#4-`?;PZRF,5TC&&'4:*=0C"9R4`@
M,%@80N+.PR`\!8`B-Y0`R5IP@7NE@8P(F@Y,4C7`%0@@>WL8P18W)IT14``)
M%)M`_P/"X@>:$<0"-=P8>Y85,Q;"R&G*0D"JTM!()AB@3T[LP@A5UL06O,E*
M'6A/F=R5#`FDD!%1W`/(`MD"//6Q!0LP816&8#9YL6`-VZ&07TP@IEJ":0F@
MVIQT^@0WD!U@>(80@<60L!L5.,`Y2-C."#8@)[/U)0)KB%T:_--%_[S!`4MP
MS!`88(8TE(T)("*?)D$H%:0D\`,)4EH"J^.&#8!F3!3@'Q%2""14,L!@)'"`
MO*9`#DCH8P,C()(=1@`!/ZTG5AKH5D0RPLDIU-)^2-'FV:;#OWJ!B0AU!%UU
ML&,S"&P*$2#J66]`AX3A4,`O2BO+&SC@%^0(JP$66(&\QO\$`AZ50#(T:YE?
MM%6$#>2.G5A8@=.4@H)T&<8_LKI($1+7)?X53`,S8TO+)/J&8OEG!`*U@I4$
MQJX1K),+)*A;O_P#`BM!$VU=P&@+4(-+L&$$!/LL!26'H"3>@*Y/,B1"`<!C
M"1>E0@(.3:H8E1("%+3M@OJ9*A$R(%58H8!Q_J'$Y-CD`%\81C];V",?V4""
M&UGI@N^!&VFS@!2*I$$H4]H-"2K+`(PX=`1.BU=!TC4F95W0`1]0&D@K,;U4
M`("%B[V"&K;#`MT2H0(AN)4"VW@$J'+M+3M"RN1*T(#]B`!4%O(D%,LHAY2X
MX21?4D'D\OB%DU#+@U:2Q4%,F`+_$@0&K7>H6'L3\2?EBO$-+'!H[%02(NI:
MP"_1@:$&]HD"]`A,9??JB-2X(`&__5<*%U@K%@2[A4Q6H5T8SD(WDG'>`'XI
M?0=)QJ8.XX[_5:@+*2#`>,?`W[^8-C_]64`(G#,!-(Q@`MG:`!H$^H85<&`B
ML3P0%<B1/A$W0T)X",#ZV$#E"SI#.U4HBG1"4$XV=5<%#/@F"FYH/0QX@'\`
M!>,50OQD9IR`+'A@7AVR=^$PR*X0!_CP$VRB@36L*@'4P:QT7%>IW53%/TK)
M#WK<7(TLW^%CXRB+(U"7D:'U(04H>$\:YCFN,:6D`V5I!`@$A5I7TC@/),`C
M%2)P#Q)X_SE!O"J%V?+2'L>4K7)CC7.CG1%:3UFT"]!Z*JQ"E9H2*,VN?NJ+
M!@`@'0P(U#%]@8!?'%"56AZM+'@F1`:@VIPQI8!>>6F!+"+7`J0H!4VH;1*B
MIQ"@#?-Z&14K*AV\!`<9GCEM@;">?M`T&:;M)P(6P`B>-.<&SX'@7T%V,FL/
M@8$!V/@.K]8VO(.!@%+8X0`+K7&4W_A-_5U&M?N\%PG$EY*"?\`W)-"6!^ZT
MH_S>`0/=/L0?]DGQQQG`4W*(`"#S380)J`,!&(@KL350@!8$N05AE9,?T**$
M]8![?@Q'1`96;0@0)&#3-F<&"0;P<BU(O8-%6,*7Y%6";K!&@/\=^)?U.)(2
M!(E3,E62`.LJJ0D,%J(R$!?&]YB`$Y-P8<]6"'R@]'X?5'L![()H-0>Y$"N&
M<6N6=5"*8L(QF03M*`5#9A\)'L3W(BBQQ"=191'FQX0'"`H>CZ9W)4R0+2]8
MV1+G8>`=KLZU<,B)!<W"EP,PBX*1""$$8S+;=AP@A,6(($1_>,E`$1<S!)R'
MV@YH`.S@J)V4#,`$*["IGZLDA)=<P[2Y6?VWBL)$KU_A`PVXT3F(8P0Y^B?S
M):#96I#4I1NZRR\PB5>=TA>ODJG*@UJ&7M[`:8*(@AK$:3*+3["!,^H@\49$
MH+;G_*+`@?3A\)B!:9IE`7DO`TQ@5(C_@'_,I8L("K,T9FSPA04LX%?@I@2V
M8R0<H$TJR8W0Z00VX`*2"R<N;G+`+P$";PP>L$B2QS(X#PQ&8D4NL!G&A*#N
M`592()&,:0@L8#_VB,A@25WHI.YRCZT4[0A`9@BB@Z"&((AV$"<F0!9V\!HV
M0.;\1`P"Y'A,P"9:`D[02GPTX"N>#]B^87)PB3=B)B4&,!!2P!%08*;DIWEV
MA`3()6RFXP2D:X'<90*2;`@F`B/*QNR6)00X8(Q\`0VO@>KF+1^81DB`L%,T
M\0$^@5O<HIK4@0.>XTY6!``ZI/"P8>*JP%B:(">`+=/2J2+<+GT\H-PV90*?
M0'Q(KG6(<!&X_\WQ!BL@'(<+?,V)M.\#.$"4%(`S!L(HL@0T(D\AAC$8YH;;
M`B#08$1&(.$3-H!)DFD/,(L`FJ4#>$$`(L$`1''1M,X>(XX"[E`#.,"QG&Q1
M&H0$.H`"'L"[S*805*`#)*`!4$0:I*$`]`'V/$-&,,(`PLI*D/`+K$1&-M*M
M9O$>(ZX)W@N*\K`2<*4/YDT+K.<4._`0$&``4(07Z.1A[H$W-C)&2+(+1N,"
M/B$`",)-,(`W=D-&0.$!+``E/Y(0<`1T6L8)+D"<MF!Z/++"`$$JH2`%]$,"
MU!$/$`!%`L`@->'8]&%5'(M\,BWX],$EO!$INV"DYH]!0BMS@+)!$/^`A?+O
M:'R!!91E]AK(.'8DZ^8`*ZN2"O1C+_.@!`*@#U"JM-:P4;[BYWA'`@+@^]8R
MU=:@U<BLC<1G2L10`PK($0P#9%J-!%*(`AK``_MD-DA`$_VC%L&`@A`@(L5@
M,ZA'#QCL#B3``"(@-I_`#`Q#+9L`5[`#>US&U"@3)3:J2U"@`W\K$!SC!M-&
M?UA)`H"L9+J%K<"F-<'@`2BL"2:@`C"@`DI%-SK"0D`G$MD"P<J'\J)`HN*"
M<#2L5$HC-.93/E4#-5!C-\$@`V*Q)X\R"O(A/[U@`M`H"L:"`0H"(XZ0&XW3
M"9"S`$H``\0'G5R-`QH)O<HBR-SD$0JE6\;_*$"[@`)DR0E6P`!,@@0\H%F(
M8`'29P5@XW):X`00L@!\D-ND``,6``)P5$=S-$<?@`&VLT<1@`$>\@`<,@`<
M$A7U04F7E$F;U$EM,B-"0`%>DDJI4@HV`P$44PX"!(:<``.8"$<\D(D8=`HN
MX,]4M`5H2`VPTR_>!&S<0`6X9@4&[`U>0^R&0`6DYBOCP`V?P`2X4SK$YJ38
M1P&*BKK.Y@G:3!%$)/@N@C>"+R@C=1L&HA\`X4$(@C_(L5U`H-ETXV[\K'`F
MP`?SP1]=B3&9@`/&E$R=A)O&K06(I)KL,KSZAYL\T#=^9/.F0B)`1S`'DS9Q
ML6#$3LRZ!`T@P#JO__-%RX<45Z$RX+'5+DKJOM*T0,?H[.0,;@8G`/)4=X0Y
M0(0D-:!$5]4;%!4)6E0O<J].2"9(FDD",E%9HN,)6&#]AB$R&\`'0S)$H&!/
MS<8#.C7*;F;>3(<80TQ1Y44\D2`#AE5<KX%<BP`%"J`!6*(!]@8"$H`#LJ29
MIJ\"#*`6&]86-N->G0`:G6!/'0_'N,T?+6AJN"<#J*=AX(5]Z/%A>W5A4\'/
MH$`%&&X!D$/F%&@SLF>_WH%+2+9=4R/*$&X#!*#TB"`";&LW7,2BR&,]`)5]
M`N%0N^1#C=/MXI5F<?$W+>(`,.,$?A4)`$K9#L*"IJ<VH`,>ADE?044$&/]@
M*T"DK\2/""(BK)[O2A.`(!!`L9:H#YE``K+6$`BC:VF"W<8`!/:F&&0G3Y_@
MJ^QD?E3V`9*K"53@``@709:11(*5/Z*$`SKU6"HBN!JHWJ#`UQQ%<*%@6S&!
M/$J5*QBH!#H`(5ES3II/)0*)1V[W_[0C4!('0Y'N8.#`!`Y`Z("U+LRV""!@
M63R$')*7;*'D`52$&##U<RVB6IUO'DHWPOZ3$EHT)X[7"1X4%4;6+H2O[N;G
M,"I+3A"Q7UIT1\1G"!3-4-KU!(0NV\H-#KI+1.T`J+*3?38@`0+@)2]N[V#3
M"<`C2D9```()E<P%"3S6)CI";ZI@`JAV$W3&+"C_Z$TMA0BN4@W%IZB4Y',0
M@'%@<W(VI$4S0EHJZH-Y3N<0F`[(@W&C@`,<H$@%XA,&US%ZV*U^V(=]^'M0
MCXC9QXB+&/7F(`0B"#B?`$B8(`/08/Z*P$Y#<E9`:)*F8`028$$O85X98U<K
M:4VCRI4<HSJL5KJZM63"27F*H-I@M(;A``0.0`'TEPPP9D\+-!Q?L@!`P80;
MYSJ8Q5<*(!_R`0#\`2#^(0#^X9`E(9$#@!\:69'Y`0$"37$R@G'(J'$2!QT1
M)XZ9H`,\%@X^(``LEXIWK7P`X!!-`04B#3+^0)P\V#]"8Y).]()`!6-Y^#(0
M39'NI/X8#+-8Z-GLX-)D_]@U]:-UV^`4#^`3_I)XCQ&:HUF:Q2LC(L)%:LXJ
M"R-DBU`?EJQ"O*LS0>C5'@`G%T&=(,1ZK"P%6.6F7FL%B.0PJJ+<0J-']``$
M"%)XM6!Q\V&*N<`$=K(GK(`%*FL50.`K,)(*?`J5H>">E39&'O)P]4`-?68W
M1"`"RMF)$=J]$K0!',!%U$%!&N2']UDR6B2/O>!^&>U*U;"!9T$IJ%(K4<(F
M#N#=H*1U:H$!L-E;.I$65`Y4M<,?=EB')J)JYN"=*7`##H`?`!@3<`4`F'<6
M/X!Q$%.C<6&A:Q8=1J(?",``UN!KXX$D^#8"%,!<PLHXR)JL"T,?0.6K64'&
M-/\7JS7#'`L@`7;A`!`S`%PDR-IZ$-89GRZ``MPD+OBQ'HPKKJ$BYEZ!D,>-
MMA121>AQ537XL,]!H`B`CG$Q50+`)\0U:"<;(02H=5-``2QC53W&LQ>B."TB
MT,A4LD];)O(AC)!R`+S9M6E"0)`2`Z*WMF>B!#`)*5D@`8YUMX&B;Y"2;8?;
M+)C8'F<4N<UBHNUQ[II[@WM0ZX`FHJ7;&]9(ZVX;NXFBZAJ-,.RLNX%"51MM
MK,?[?._&S102O?]"E#4I8MO[+T)@RC`L53=`2^4;*/*!K[V#@N9,OP5#,OH[
MO^TB/JX[P,5!(3$:2MHU,T#``1Y@FQ,<*/B-P7%QANC_NAE&+PY&JZHIW"-4
M0`H'BL/'HP&.=``^&1CTPX['H9"1$<2YHXN4%$%Y(YGNYZ`DX"5C17S<2GQ^
MW!B!O!A+KK\[Z`,*`R+L`02\2S)BO$@N,BCQ6X561`#T(1*>CR420$6VO)*[
M7"!41!]V@27&.@)XE,S-G*PAH`+4'#P+`CZ+!AU5D6CD`BB?8*?R@:[I^L/%
M;J`#.P(X%K*=G'B<(X<%0*>O(-/>^9UCE-%5@-&S#U0+QP8E@"TF0`C"4P+@
MXCTS_2TPQ"*LD1<Z6A^":[9:IQBMY-2)(RC56A]R^K4$/:E:KZYA&!=J:(#M
M&BAYP[N:%,QI_%%1'=;=S'J6)#453C$2$#S812RF;4$$*OG"DQW:]X`MHIW:
,,:'(JQW;*3,(```[
`
end
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>6
<FILENAME>img3.jpg
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 img3.jpg
M_]C_X``02D9)1@`!`0$`8`!@``#__@`<4V]F='=A<F4Z($UI8W)O<V]F="!/
M9F9I8V7_VP!#``H'!P@'!@H("`@+"@H+#A@0#@T-#AT5%A$8(Q\E)"(?(B$F
M*S<O)BDT*2$B,$$Q-#D[/CX^)2Y$24,\2#<]/CO_VP!#`0H+"PX-#AP0$!P[
M*"(H.SL[.SL[.SL[.SL[.SL[.SL[.SL[.SL[.SL[.SL[.SL[.SL[.SL[.SL[
M.SL[.SL[.SO_P``1"`!-`6,#`2(``A$!`Q$!_\0`'``!``$%`0$`````````
M``````<"`P0%!@$(_\0`3A```0,#`04&`04'$`L``````0(#!``%$08'$B$Q
M41-!87&!D:$4(C)"L0@5%R,S4J(6&%-B<G."DI2RL\'"T=+A-#<X0U158W23
MH_#_Q``4`0$`````````````````````_\0`%!$!````````````````````
M`/_=``0`*/_:``P#`0`"$0,1`#\`F:E*CS:;M*3I5K[UVHH=N[R<DD9$=)Y$
MCO4>X>I\0Z/5&M[%I%G>N<L=LH91&:^<ZOT[AXG`J,9FV;4]]E*BZ6L6[T/9
MJD.XZX'`>QJ]HW9)*O;OW^UHZ^M3Y[015K/:.9[W%<QY#CY<JEZWVV#:HJ8M
MOB,Q6$\FV4!(^%!#`&VVX?C1\J:!X@$L-?#@:\5<=M%E_&/QY4EM/-/8M/Y_
MB9-3E2@ARR[=769`B:GLY94DX6[&!!2?%M7'X^E2I9[W;;_!3-M4QN4PKZR#
MQ2>A','P-8U_TI9-3QBS=H#3YQA+N,.(\E#B/LJ&KYI?4>R6ZB^6*6N1;2H!
M2B,C&?H.I'`CHK[#03[2N>T9K"!K.S)G1/Q;R,)D1R<J:5_6#W'_`#KH:!2E
M*!2E*!2E*!2E*!2E*!2E*!2E*!2E*!2E*!2E*!2E*!2E*!2E*!2E*!2E*!2E
M*!2E*!2E*#2ZOU&SI734N[.@*4TG=90?KN'@D>_/P!J+=DVDW=1W5_6E^S(/
M;$QPX,]H[GBL^">0\?*KNW6Y/3+G9].1CE2OQRD#ZRE'<1]BO>I8L=J8L=DA
MVN.!V<5E+8(^L0.)]3D^M!GTI2@4I2@5:DQF)D9R-):0\RZDH<;6,A23S!%7
M:4$`2F9.Q[:2V\PIQ=HE\<$YWV2>*3U4@\O3K4^-.MOLH>:6%MN)"DJ!X*!X
M@UPFV6QHNVAGI:49?MJP^@]^[G"QY8.?X-7MD%X5=M`14.*WG(*U1E$]$X*?
MT5`>E!W%*52%H4<!22>@-!52E4E:0K=*@#TS054I2@4JAQQMI.^XM*$]5'`J
MAJ7&?.&9#3AZ(6#]E!>I2E`I5MU]IA.\\ZAL=5J`%>,R6)'Y%]MW'YBP?LH+
MM*4H%*IWTE6[O#/3-54"E*I#B"<!:2>F:"JE*\)"1DD`=30>TKQ*DJ&4D$>!
MJDN(!P5I!\Z"NE4=JW^R)]Z=JW^R)]Z#_]"9J4JDK2DX*@#T)H*J4I0*50XZ
MVRG>=<2A/51P*I:E1Y!PR^TY^X6#]E!=I2E`I6*[<[>RO<=G1FU\MU3R0?MJ
M^T\T^G?9<0XGJA0(H*Z4I00?JL?+/N@K:RYQ2T]%P#X`+^TU.%0;M%5]Y-M5
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M8UM8]506WX4UI+Y2.TC+6`XV>\8[QXCA6ZDSHD)HO2I3+#:>:W7`D#U-`AQ&
MH,-J(QO]FR@(3OK*U8'4G)/K4;[7=H,[3?866SK[*;);[1U_&2V@D@!/B2#Q
M[L>/"3&G6WVD.LN)<;6`I*T'(4#W@U"VW334XW*-J2.TIV*&0R^4C/9*!)!/
M@<XSU'C0=+9-D-I>AM2]4/2[O<74!3Q>DK"4J/'`P03CJ363<=CFEWF5*M2)
M-IE@9;?8D+5NJ[LA1/#RQ70Z4U7;-4V:/+ARFE/*;';,;PWVUXX@CGS[^^MG
M<+G!M,5<JX2V8K*!DK=6$C_.@B;9WKR]P]6KT;J-\RR'5L-/K.5H<3G@5<U`
MX.,\>53'7S_HN'(UCM>>O\1A:8#,Q<I;I&`D<=P?NCPX>?2OH"@@C3ZC^N+>
M&3CY9*_HW*G>H%L;B&ONB7UN+2A(FRLE1P/R;E3G\MB?\4S_`.04%^HJVD;.
M)"I!U3I7?8N+*NU>89."LCCOHQ];J._SYRDVZV\G>:<2L`XRDYJN@CO0NU6!
M>[.\F^/MPI\%HK?*OFI=0.:TCKU3[5R,R;?-LVHOD,#M(.GH:\K6?YRNJR.2
M>[W-:W;?:(-LU;'?AQTLJFQ^U>".`4O>(WL=Q..-3CIZSP+%9(T"W1TLL(0#
M@<U$CBHGO)ZT%=CL<#3MJ:MMM9#3#0\U+/>I1[R:YZY;*M*7:Y2+A+B/J?DN
M%QPID+`*CSX9X5V-*#YQU#I:U6_:Y$T[';<3;W9$9"D%TDX7N[WSN?>:E0;&
M]%Y_T*1_*E_WUP>KO]H*W_\`=P_[%3M04H0EM"4(&$I&`.@J"MKA(VJVK!/Y
M&/\`TJJG>H'VN_ZUK5^\Q_Z55!/%1CM2VC3;!+:T_8<"XOI"G'L!1:"N"4I!
MX;Q\>0QUX2=4&[8;!<+7J^/JUAA3\11:4XH#(;<1@`*Z`@#CYT'66G9%`DLH
MEZMFS+S<'!ET.2%A"#T&#DXZY]!6;(V.Z.<6E<:))@K2<[T>4O/Z1/PK>:<U
MC8]40FY%NG-%Q2<KCK4`XV>A3S]>5;65<(4%HO3);$=L<UNN!`'J:"N/';BQ
MFX[6]V;20E.\HJ.!U)XGUJ&]L]SU$Q>X\5QR5%T\M*`7(W)PD_/WB.9'<D\.
M%3.A:'$)6A06A0RE23D$=16LFWK3_P`J<M,^XV\/%(WXK[J,D'EE)YT$?633
MNQZ;$0EF1$D+4.)E35MND^*2I.#Y"MS$V3:78GL7*TRKA$2A85NQ9AW%@=V]
MQ5CR-94S9?H6Y`N_>IEHJX[\9Y2`/(`[OPJ)=6Q&MG^I8[6C-127%K&7&&W0
MLMJSP2K=X*ST(SPX\Z#Z,I6-;79+]KB.S&^SDN,(4\C&-U92-X>^:4$;[=-/
MJGZ>C7IA&\Y;UE+N!_NUX&?10'N:ZG9SJ9&J-'Q)*G`J4PD,21GCOI'/U&#Z
MUT<N(Q.AO1)3:76'T%MQ"N2DD8(J!6W+GL8UTM"TN2+/+_\`<UG@1W;Z<_\`
MP-!]`4K#M5U@WNW-7"W2$2(SPRE:3\#T/A690*4I0*4KF]::UMVC+2J3)4')
M3@(C1@?G.*_J2.\_UT'#[=-2!,*)IB*K>?D+#SZ4\2$CZ"?4\?X(ZUWNA["=
M-:/M]L6`'D-[[W[XKYRO8G'I48;,],3]7ZF<UMJ`%;272XSO#@ZZ.1`_-1W>
M('0U-U!Y6@L&AM.Z8FNS+1!,=]Y'9K47EKRG(.,*)',"M^>`)J-X>OM12M)_
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M@Q;;$;B0H[<>.T,(::2$I3Y`5=6A#B%(6D+0H84E0R".E55;>#I96&%H0Z4G
M<4M)4D'NR`1D>HH.4G[*]&3WR^JT)CN*.28SJVA_%!Q\*LL[(M&-NAQRW.R"
M.0>DN*'MFK\2\:CE:LGV'Y3;$_(H[3W;?(W#O[^>&[VO#&.M=:,X&2">\@8H
M/__1EV#;X=LBHBP(K45A'T6VD!*1Z"LFO"<`GI7#Z6U7?M26^-,*&(X?6I.$
MVQY:$@**?RG:`=W3A09=QV7:/NMQ?N$RUJ<D2%EQQ8DNIWE'F<!6!6/^![0W
M_*%_RIW_`!5VU6Y#PCQG7U)4H-(*RE`R3@9P!UH,"P:=M6F;>8%HC?)XZG"X
M4[ZE$J.`3E1)[A6SKE]/7F]ZHLS5XB.6Z%'D9+3+C*WU@`D?.4%I`/#E@XKI
MD!8;2'"DKP-XI&`3X"@T.H=#Z>U5*:DWB"9#K*-Q"@\M&$YSCYI'?6^2D(0$
MI&`D8`JJN3T_K)^Z,SE2+7)4J-.>CI5%8*DE*%8!))Y]:#K*5H-$Z@D:GTNQ
M=I3+;+KJW$E#><`)64CF3W"M_0:"9HC3T_4;>H9,$KN+2T+0]VRP`48W3N@X
MX8'=6_I2@5S]XT/IZ_7=F[7*"7IC`2E#@>6G`221P!`YDUT%:'1E^D:ETXW<
MY33;3JW74%+>=W"5E(YGH*#?52XVAUM3;B$K0H84E0R".A%55R.H-57>V:MC
MVFW6QN>S\B,MYL*(>4D+W2&^XD9S@\\$9H%PV6:,N+I>79D,N'CF.XIH>R3C
MX5;B[)M%QEA9M)?4.1??<6/;./A619=:,W[5BK;![-R$+<)6^00ZESM"@H4#
MRQCD1FNJH+,2)&@Q6XL1AMAAH;J&VTA*4CH`*T5XV?:4OTA<FX69E;[ARMUM
M2FU*/4E)&3YU>U;J3]3-K9E)C=NY(DMQFPI>XA*EG@I:L'"1CG67%:O@=;7*
MFV];1^FAJ*M)]%%P_90<K^!G1H/"-*"?S1*7BMW9-!Z7T\Z'[;:&6WT\GEDN
M+'D5$D>E=#7BE)0DJ40D#F2:#VE>`Y&1RI0>UJM1:<MNJ+4Y;;HQVC2N*5#@
MIM7<I)[C6UI00%*LFMMDEP<FVEQ4VU*.5J2@J;4/^HCFD^(]^ZNQL.W+3\]M
M*+PR];'_`*RMTNM'R(XCV]:DL@$8/$5RMZV9:2OJU.R+2AEY7$NQB6B3U('`
M^HH,R/KK2<E`6WJ*W8/<N0E!]B0:LS=HNCX""I[4$->.YA?:GV1FN65L%TP5
M$BX74#IVK?#]"JV-A.E6G0MR7<WDCZBWD`'V0#0:K4.W1M>8FE[<X\\L[J9$
MA/#/[5`XGUQY&L+3&R^^:KN@O^MWGTMK(5V#BL.NCN!'U$^'/P'.I2L>C=/:
M<P;5:F&'`,=J1ON?QE9-;N@M1X[,2.W'CM(:9:2$H;0,!('(`5=I2@\K3HTA
MIQ#?9)LL,-_F=D"GVY5N:4%#;3;+26FD);;0`E*$C`2.@%5TI08[$")&E2)3
M$9MM^44E]Q*0%.$#`R>_`K(I2@L2X46X1U1YD9J0RKFVZ@*2?0UB,Z=LS#[<
MANVQ^U:.6UJ1O%'[G/+TK94H%*4H,=$"(W.=G(CMIE/("''@GYRTCD"?"LBE
M*#RM0WI+3S*=UJT16T@YW4HP/:MQ2@\`P,"O:4H-6YIJR./+>5:XH<<.7"EL
M)WSU5CGZULFVT,MI:;0E"$`)2E(P`!R`JJE`K'B08D!#B(<=MA+CBG5AM.`I
M:N)4?$UD4H,>#`B6R*F+!C-QF$DD-M)W4@DY/#S)K(I2@4I2@5CPH$2VQA&A
M1FX[()4&VT[H!)R3CQ)K(I0*QU0(BK@FX*C-F6ALM)?*?GA!.2G/3-9%*##9
MM-NCW%ZY,PF&YCZ=UU]#8"UCH3W\A[5F4I06WX[,IA;$AEMYI8PIMQ(4E0\0
M>=8,;3UGANH=C6Z.TMLY04H^AY#N]*V5*!6-/M\.Z0W(<^,W)CN8WVG$[R58
?.1P\Q632@H99;CLH990EMMM(2A"1@)`&`!2JZ4'_V3\_
`
end
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2
<SEQUENCE>7
<FILENAME>ex_2.htm
<TEXT>
<HTML>
<HEAD>
<TITLE> </TITLE>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>


<!-- MARKER FORMAT-SHEET="Para Right" FSL="Default" -->
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EXHIBIT 2</B> </FONT></P>
<BR><BR>




<p style=' margin-bottom:0pt; margin-top:132pt;text-align:left;'><font size=3>Financial Statements</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=3>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=5>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=3>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>STATEMENT OF MANAGEMENT&#146;S RESPONSIBILITY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=3>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Management is responsible for the preparation and presentation of the financial statements, Management&#146;s Discussion and Analysis (&#147;MD&amp;A&#148;) and all other information in the Annual Report. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In management&#146;s opinion, the accompanying financial statements have been properly prepared with reasonable limits of materiality and within the appropriately selected Canadian generally accepted accounting principles and policies consistently applied and summarized in the financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The MD&amp;A has been prepared in accordance with the requirements of securities regulators as applicable to Oncolytics Biotech Inc.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The financial statements and information in the MD&amp;A generally include estimates that are necessary when transactions affecting the current accounting period cannot be finalized with certainty until future periods. Based on careful judgments by management, such estimates have been properly reflected in the accompanying financial statements and MD&amp;A. The MD&amp;A also includes information regarding the impact of current transactions and events, sources of liquidity and capital resources and risks and uncertainty. Actual results in the future may differ materially from our present assessment of this information because future events and circumstances may not occur as expected. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Systems of internal controls, including organizational and procedural controls and internal controls over financial reporting, assessed as reasonable and appropriate in the circumstances, are designed and maintained by management to provide reasonable assurance that assets are safeguarded from loss or unauthorized use and to produce reliable records for financial purposes.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We, as the Chief Executive Officer and Chief Financial Officer will certify to our annual filings with the CSA and the SEC as required in Canada by Multilateral Instrument 52-109 (certification of Disclosure in Issuers&#146; Annual Interim Filings) and in the United States by the </font><i><font size=2>Sarbanes-Oxley Act.</font></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The external auditors conducted an independent examination of corporate and accounting records in accordance with generally accepted auditing standards to express their opinion on the financial statements. Their examination included such tests and procedures as they considered necessary to provide reasonable assurance that the financial statements are presented fairly. The external auditors have full and free access to our Board of Directors and its Committees to discuss audit, financial reporting and related matters.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Board of Directors is responsible for ensuring that management fulfills its responsibilities for financial reporting and internal control. The Board exercises this responsibility through the Audit Committee of the Board. This Committee meets with management and the external auditors to satisfy itself that management&#146;s responsibilities are properly discharged and to review the financial statements and MD&amp;A before they are presented to the Board of Directors for approval.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="531" style=' border-collapse:collapse'>
    <tr>
        <td width="432" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><i><font size=2>/s/ Brad Thompson</font></i></p> </td>
        <td width="99" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><i><font size=2>/s/ Doug Ball</font></i></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="589" style=' border-collapse:collapse'>
    <tr >
        <td width="432" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Brad Thompson, PhD</font></p> </td>
        <td width="108" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Doug Ball, CA</font></p> </td>
        <td  width="49">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="432" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Chairman, President and CEO</font></p> </td>
        <td  colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Chief Financial Officer</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>AUDITORS&#146; REPORT</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>To the Shareholders of</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We have audited the balance sheets of Oncolytics Biotech Inc. as at December 31, 2006 and 2005 and the statements of loss and deficit and cash flows for each of the years in the three year period ended December 31, 2006 and for the cumulative period from inception on April 2, 1998. These financial statements are the responsibility of the Company&#146;s management. Our responsibility is to express an opinion on these financial statements based on our audits.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States).&nbsp;Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company&#146;s internal control over financial reporting. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company&#146;s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2006 and 2005 and the results of its operations and its cash flows for each of the years in the three year period ended December 31, 2006 and the cumulative period from inception on April 2, 1998 in accordance with Canadian generally accepted accounting principles.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="50%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>
Calgary, Canada<BR>
February 23, 2006</font></p> </td>
        <td width="50%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>
<img src="img1.jpg"><BR>
Chartered Accountants</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>BALANCE SHEETS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>As at December 31</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="530" style=' border-collapse:collapse'>
    <tr>
        <td width="365" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="80" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><B><font SIZE=2>ASSETS</font></B></p> </td>
        <td width="84" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Current</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Cash and cash equivalents</font></p> </td>
        <td width="84" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>3,491,511</font></b></p> </td>
        <td width="80" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:8.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3,511,357</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Short-term investments</font><i></i></p> </td>
        <td width="84" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>24,122,237</font></b></p> </td>
        <td width="80" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>36,894,810</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Accounts receivable</font></p> </td>
        <td width="84" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>84,003</font></b></p> </td>
        <td width="80" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:20.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>47,390</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Prepaid expenses</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>638,540</font></b></p> </td>
        <td width="80" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:15.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>540,368</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>28,336,291</font></b></p> </td>
        <td width="80" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>40,993,925</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><b><font size=2>Property and equipment </font></b><i><b><font size=2>[note 4]</font></b></i></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><b><font size=2>Intellectual property </font></b><i><b><font size=2>[note 5]</font></b></i></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><b><font size=2>149,596</font></b></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><b><font size=2>5,079,805</font></b></p> </td>
        <td width="80" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:15.75pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><font size=2>189,863</font></p>
<p style='margin-left:0pt;text-indent:8.25pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><font size=2>5,110,538</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='border-bottom:solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><b><font size=2>33,565,692</font></b></p> </td>
        <td width="80" valign=top style='border-bottom:solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><font size=2>46,294,326</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>LIABILITIES AND SHAREHOLDERS&#146; EQUITY </font></b></p> </td>
        <td width="84" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Current</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Accounts payable and accrued liabilities </font><i></i></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2,616,421</font></b></p> </td>
        <td width="80" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:8.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1,692,481</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Alberta Heritage Foundation loan </font></b><i><b><font size=2>[note 6]</font></b></i></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>150,000</font></b></p> </td>
        <td width="80" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:15.75pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>150,000</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Commitments and contingency </font></b><i><b><font size=2>[notes 7 and 8]</font></b></i></p> </td>
        <td width="84" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Shareholders&#146; equity</font></b><font size=2> </font></p> </td>
        <td width="84" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Share capital </font><i><font size=2>[note 9]</font></i></p> </td>
        <td width="84" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Authorized: unlimited</font></p> </td>
        <td width="84" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:9.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Issued: 36,520,748 (2005 &#150; 36,236,748)</font></p> </td>
        <td width="84" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>83,083,271</font></b></p> </td>
        <td width="80" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>82,841,871</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Warrants </font><i><font size=2>[note 9]</font></i></p> </td>
        <td width="84" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>4,216,740</font></b></p> </td>
        <td width="80" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:8.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4,429,932</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Contributed surplus </font><i><font size=2>[notes 2, 10 and 11]</font></i></p> </td>
        <td width="84" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>8,529,326</font></b></p> </td>
        <td width="80" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:8.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>7,912,584</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Deficit</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(65,030,066)</font></b></p> </td>
        <td width="80" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(50,732,542)</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>30,799,271</font></b></p> </td>
        <td width="80" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>44,451,845</font></p> </td> </tr>
    <tr>
        <td width="365" valign=top style='border-bottom:solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:10.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:1.5pt;text-align:left;margin-top:10.0pt;margin-bottom: 0in'><b><font size=2>33,565,692</font></b></p> </td>
        <td width="80" valign=top style='border-bottom:solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:3.0pt;text-align:left;margin-top:10.0pt;margin-bottom: 0in'><font size=2>46,294,326</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:left;'><i><font size=2>See accompanying notes</font></i></p>


<table border="0" cellspacing=0 cellpadding=0 width="487" style=' border-collapse:collapse'>
    <tr>
        <td width="192" valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>On behalf of the Board:</font></p> </td>
        <td width="192" valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>/s/ </font><i><font size=2>Fred Stewart</font></i></p> </td>
        <td width="103" valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>/s/ </font><i><font size=2>Jim Dinning</font></i></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="448" style=' border-collapse:collapse'>
    <tr>
        <td width="192" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="192" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Director</font></p> </td>
        <td width="64" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Director</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>STATEMENTS OF LOSS AND DEFICIT</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>For the periods ended December 31</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="672" style=' margin-left:3.95pt;border-collapse:collapse'>
    <tr>
        <td width="318" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b><br> <font size=2>$</font></p> </td>
        <td width="84" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2005</font></b><br> <font size=2>$</font></p> </td>
        <td width="90" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><br> <font size=2>$</font></p> </td>
        <td width="96" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Cumulative from inception on April 2,</font></b><br> <b><font size=2>1998 to December 31, 2006</font></b><br> <font size=2>$</font></p> </td> </tr>
    <tr>
        <td width="318" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>Revenue</font></b></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="318" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Rights revenue</font><i></i></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:35.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>  &#151;</font></b></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>  &#151;</font></p> </td>
        <td width="90" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>  &#151;</font></p> </td>
        <td width="96" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>310,000</font></p> </td> </tr>
    <tr>
        <td width="318" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:35.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>  &#151;</font></b></p> </td>
        <td width="84" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:35.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>  &#151;</font></b></p> </td>
        <td width="90" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:35.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>  &#151;</font></b></p> </td>
        <td width="96" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>310,000</font></p> </td> </tr>
    <tr>
        <td width="318" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>Expenses </font></b><i></i></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="318" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Research and development </font><i><font size=2>[note 8]</font></i><i></i></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>10,535,689</font></b></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9,308,977</font></p> </td>
        <td width="90" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>7,107,998</font></p> </td>
        <td width="96" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>43,371,194</font></p> </td> </tr>
    <tr>
        <td width="318" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Operating </font></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>3,630,144</font></b></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3,083,372</font></p> </td>
        <td width="90" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2,803,669</font></p> </td>
        <td width="96" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>16,770,581</font></p> </td> </tr>
    <tr>
        <td width="318" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Stock based compensation </font><i><font size=2>[note 10]</font></i><i></i></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>403,550</font></b></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>64,104</font></p> </td>
        <td width="90" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2,668,570</font></p> </td>
        <td width="96" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4,165,649</font></p> </td> </tr>
    <tr>
        <td width="318" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Foreign exchange loss </font></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:17.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>35,270</font></b></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>253,608</font></p> </td>
        <td width="90" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>358,068</font></p> </td>
        <td width="96" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>648,848</font></p> </td> </tr>
    <tr>
        <td width="318" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Amortization &#150; intellectual property</font></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>874,043</font></b></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>786,459</font></p> </td>
        <td width="90" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>686,717</font></p> </td>
        <td width="96" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4,036,834</font></p> </td> </tr>
    <tr>
        <td width="318" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Amortization &#150; capital assets</font></p> </td>
        <td width="84" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:17.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>52,637</font></b></p> </td>
        <td width="84" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>69,532</font></p> </td>
        <td width="90" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>65,039</font></p> </td>
        <td width="96" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>407,683</font></p> </td> </tr>
    <tr>
        <td width="318" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>15,531,333</font></b></p> </td>
        <td width="84" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>13,566,052</font></p> </td>
        <td width="90" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>13,690,061</font></p> </td>
        <td width="96" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>69,400,789</font></p> </td> </tr>
    <tr>
        <td width="318" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>15,531,333</font></b></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>13,566,052</font></p> </td>
        <td width="90" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>13,690,061</font></p> </td>
        <td width="96" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>69,090,789</font></p> </td> </tr>
    <tr>
        <td width="318" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Interest income</font></b></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(1,233,809)</font></b></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:10.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(783,456)</font></p> </td>
        <td width="90" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:10.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(699,757)</font></p> </td>
        <td width="96" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,803,005)</font></p> </td> </tr>
    <tr>
        <td width="318" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>Gain on sale of BCY LifeSciences Inc. </font></b><i><b><font size=2>[note 18]</font></b></i></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:35.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>  &#151;</font></b></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:27.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(765)</font></p> </td>
        <td width="90" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(34,185)</font></p> </td>
        <td width="96" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:10.5pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>(299,403)</font></p> </td> </tr>
    <tr>
        <td width="318" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>Loss on sale of Transition Therapeutics Inc.</font></b></p> </td>
        <td width="84" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:35.25pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>  &#151;</font></b></p> </td>
        <td width="84" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>  &#151;</font></p> </td>
        <td width="90" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>  &#151;</font></p> </td>
        <td width="96" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>2,156,685</font></p> </td> </tr>
    <tr>
        <td width="318" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>Loss before taxes</font></b></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>14,297,524</font></b></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>12,781,831</font></p> </td>
        <td width="90" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>12,956,119</font></p> </td>
        <td width="96" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>66,145,066</font></p> </td> </tr>
    <tr>
        <td width="318" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>Future income tax recovery </font></b><i><b><font size=2>[note 13]</font></b></i><i></i></p> </td>
        <td width="84" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:35.25pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>  &#151;</font></b></p> </td>
        <td width="84" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>  &#151;</font></p> </td>
        <td width="90" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>  &#151;</font></p> </td>
        <td width="96" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>(1,115,000)</font></p> </td> </tr>
    <tr>
        <td width="318" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>Net loss for the year</font></b></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>14,297,524</font></b></p> </td>
        <td width="84" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>12,781,831</font></p> </td>
        <td width="90" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>12,956,119</font></p> </td>
        <td width="96" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>65,030,066</font></p> </td> </tr>
    <tr>
        <td width="318" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>Deficit, beginning of year</font></b></p> </td>
        <td width="84" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>50,732,542</font></b></p> </td>
        <td width="84" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>37,950,711</font></p> </td>
        <td width="90" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>24,994,592</font></p> </td>
        <td width="96" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:35.25pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>  &#151;</font></b></p> </td> </tr>
    <tr>
        <td width="318" valign=bottom style='border-bottom: solid black 2.25pt;padding: 0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>Deficit, end of year</font></b></p> </td>
        <td width="84" valign=bottom style='border-bottom: solid black 2.25pt;padding: 0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>65,030,066</font></b></p> </td>
        <td width="84" valign=bottom style='border-bottom: solid black 2.25pt;padding: 0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>50,732,542</font></p> </td>
        <td width="90" valign=bottom style='border-bottom: solid black 2.25pt;padding: 0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>37,950,711</font></p> </td>
        <td width="96" valign=bottom style='border-bottom:solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>65,030,066</font></p> </td> </tr>
    <tr>
        <td width="318" valign=bottom style='border-bottom: solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>Basic and diluted loss per share</font></b><font size=2> </font><i><b><font size=2>[note 12]</font></b></i></p> </td>
        <td width="84" valign=bottom style='border-bottom: solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:24.0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>(0.39)</font></b></p> </td>
        <td width="84" valign=bottom style='border-bottom: solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:24.75pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>(0.39)</font></p> </td>
        <td width="90" valign=bottom style='border-bottom: solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:24.75pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>(0.45)</font></p> </td>
        <td width="96" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>See accompanying notes</font></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>STATEMENTS OF CASH FLOWS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.75in; text-indent:-0.75in;text-align:left;'><font size=2>For the periods ended December 31</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="623" style=' margin-left:0pt;border-collapse:collapse'>
    <tr>
        <td width="270" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b><br> <font size=2>$</font></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2005</font></b><br> <font size=2>$</font></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><br> <font size=2>$</font></p> </td>
        <td width="97" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Cumulative from inception on April 2,</font></b><br> <b><font size=2>1998 to December 31, 2006</font></b><br> <font size=2>$</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><B><font SIZE=2>OPERATING ACTIVITIES</font></B></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net loss for the year</font></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(14,297,524)</font></b></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(12,781,831)</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(12,956,119)</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(65,030,066)</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Deduct non-cash items</font></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:.25in;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Amortization &#150; intellectual property</font></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>874,043</font></b></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>786,459</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>686,717</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4,036,834</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Amortization &#150; capital assets</font></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:17.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>52,637</font></b></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>69,532</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>65,039</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>407,683</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Stock based compensation </font><i><font size=2>[note 10]</font></i></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>403,550</font></b></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>64,104</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2,668,570</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4,165,649</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt; height:13.5pt'>
            <p style='margin-left:.25in;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Other non-cash items </font><i><font size=2>[note 17]</font></i><i></i></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>224,508</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>379,895</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1,383,537</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net changes in non-cash working </font><br> <font size=2>capital </font><i><font size=2>[note17]</font></i><i></i></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>811,922</font></b></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>584,766</font></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(69,065)</font></p> </td>
        <td width="97" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1,904,921</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Cash used in operating activities</font></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(12,155,372)</font></b></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(11,052,462)</font></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(9,224,963)</font></p> </td>
        <td width="97" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(53,131,442)</font></p> </td> </tr>
    <tr style='height:16.15pt'>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt;height:16.15pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><B><font SIZE=2>INVESTING ACTIVITIES</font></B></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt;height:16.15pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt;height:16.15pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt;height:16.15pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt;height:16.15pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Intellectual property</font></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(842,610)</font></b></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,033,035)</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:10.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(958,809)</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(5,499,280)</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Capital assets </font></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(35,837)</font></b></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(61,309)</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(15,230)</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:10.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(623,348)</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Purchase of short-term investments</font></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(1,035,427)</font></b></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(22,195,253)</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(6,777,179)</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(48,119,467)</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Redemption of short-term investments</font></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>13,808,000</font></b></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6,656,746</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3,114,000</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>23,578,746</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Investment in BCY LifeSciences Inc.</font></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:24.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>7,965</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>133,609</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>464,602</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Investment in Transition Therapeutics Inc</font><i><font size=2>.</font></i></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="97" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2,532,343</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Cash used in investing activities</font></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>11,894,126</font></b></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(16,624,886)</font></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,503,609)</font></p> </td>
        <td width="97" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(27,666,404)</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><B><font SIZE=2>FINANCING ACTIVITIES</font></B></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Alberta Heritage Foundation loan</font></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3/4</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>150,000</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Proceeds from exercise of stock options and warrants</font></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>241,400</font></b></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3,384,787</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>8,121,296</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>15,208,468</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Proceeds from private placements</font></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>15,395,402</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6,223,763</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>38,137,385</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Proceeds from public offerings</font></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9,150,902</font></p> </td>
        <td width="97" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>30,793,504</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Cash provided by financing activities</font></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>241,400</font></b></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>18,780,189</font></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>23,495,961</font></p> </td>
        <td width="97" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>84,289,357</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><b><font size=2>Increase (decrease) in cash and cash equivalents during the period</font></b></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:14.25pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><b><font size=2>(19,846)</font></b></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:3.0pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=2>(8,897,159)</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:6.75pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=2>9,767,389</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:6.75pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=2>3,491,511</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><b><font size=2>Cash and cash equivalents, beginning of the period</font></b></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:5.25pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><b><font size=2>3,511,357</font></b></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:1.5pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=2>12,408,516</font></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:6.75pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=2>2,641,127</font></p> </td>
        <td width="97" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:.5in;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='border-bottom: solid black 2.25pt;padding: 0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><b><font size=2>Cash and cash equivalents, end of the period</font></b></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:5.25pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><b><font size=2>3,491,511</font></b></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:6.75pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=2>3,511,357</font></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black 2.25pt;padding: 0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:1.5pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=2>12,408,516</font></p> </td>
        <td width="97" valign=bottom style='border-bottom: solid black 2.25pt;padding: 0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:6.75pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=2>3,491,511</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='border-bottom: solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><b><font size=2>Cash interest received</font></b></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:12.75pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><b><font size=2>940,100</font></b></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:14.25pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=2>993,097</font></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:14.25pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=2>459,757</font></p> </td>
        <td width="97" valign=bottom style='border-bottom: solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.75in; text-indent:-0.75in;text-align:left;'><i><font size=2>See accompanying notes</font></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NOTES TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>



<!-- MARKER FORMAT-SHEET="Para Hang" FSL="Default" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>1.</B> </FONT> </TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>INCORPORATION
AND NATURE OF OPERATIONS</B> </FONT></TD>
</TR>
</TABLE>
<BR>


<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>Oncolytics Biotech Inc. (the &#147;Company&#148; or &#147;Oncolytics&#148;) was incorporated on April 2, 1998 under the Business Corporations Act (Alberta) as 779738 Alberta Ltd. On April 8, 1998, the Company changed its name to Oncolytics Biotech Inc.</font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>The Company is a development stage biopharmaceutical company that focuses on the discovery and development of pharmaceutical products for the treatment of cancers that have not been successfully treated with conventional therapeutics. The Company&#146;s main project is the development of REOLYSIN<sup>&reg;</sup>, a product that 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, or to treat certain cellular proliferative disorders for which no current therapy exists.</font></p>


<!-- MARKER FORMAT-SHEET="Para Hang" FSL="Default" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>2.</B> </FONT> </TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>BASIS
OF FINANCIAL STATEMENT PRESENTATION</B> </FONT></TD>
</TR>
</TABLE>
<BR>


<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>On April 21, 1999, SYNSORB Biotech Inc. (&#147;SYNSORB&#148;) purchased all of the shares of the Company. In connection with the acquisition, the basis of accounting for the assets and liabilities of Oncolytics was changed to reflect SYNSORB&#146;s cost of acquiring its interest in such assets and liabilities (i.e. reflecting SYNSORB&#146;s purchase cost in the financial statements of the Company). The amount by which SYNSORB&#146;s purchase price exceeded the underlying net book value of the Company&#146;s assets and liabilities at April 21, 1999 was $2,500,000. Such amount has been credited to contributed surplus and charged to intellectual property which will be amortized to income based on the established amortization policies for such assets. Subsequent to April 21, 1999 SYNSORB&#146;s ownership has been diluted through public offerings of the Company&#146;s common shares, sales of the Company&#146;s
shares by SYNSORB and a distribution of SYNSORB&#146;S ownership interest in the Company to its shareholders </font><i><font size=2>[note 18]</font></i><font size=2>. As a result, SYNSORB no longer has any ownership in the Company. </font></p>


<!-- MARKER FORMAT-SHEET="Para Hang" FSL="Default" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>3.</B> </FONT> </TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES</B> </FONT></TD>
</TR>
</TABLE>
<BR>


<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>The financial statements of the Company have been prepared in accordance with Canadian generally accepted accounting principles (&#147;GAAP&#148;). These policies are, in all material respects, in accordance with United States generally accepted accounting principles except as disclosed in note 19. The financial statements have, in management&#146;s opinion, been properly prepared within reasonable limits of materiality and within the framework of the accounting policies summarized below.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Use of estimates</font></b></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates and such differences could be significant. Significant estimates made by management affecting the Company&#146;s financial statements include the assessment of the net realizable value of long lived assets and the amortization period of intellectual property.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NOTES TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Cash and cash equivalents</font></b></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>Cash and cash equivalents consists of cash on hand and balances with the Company&#146;s bank including interest bearing deposits earning an average interest rate of 3.7% (2005 &#150; 2.9%). </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Short-term investments</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Short-term investments, consisting primarily of bankers&#146; acceptances, treasury bills and bonds, are liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value and with original maturities less than two years at the time of purchase, and are carried at the lower of amortized cost and market value. Gains and losses on disposal of short-term investments are included in income in the period of realization. Premiums or discounts are amortized over the remaining maturity of the instrument and reported in interest income. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Capital assets</font></b></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>Capital assets are recorded at cost. Amortization is provided on bases and at rates designed to amortize the cost of the assets over their estimated useful lives. Amortization is recorded using the declining balance method at the following annual rates:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="420" style=' margin-left:53.5pt;border-collapse:collapse'>
    <tr>
        <td width="204" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Office equipment and furniture</font></p> </td>
        <td width="216" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>20%</font></p> </td> </tr>
    <tr>
        <td width="204" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Medical equipment</font></p> </td>
        <td width="216" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>20%</font></p> </td> </tr>
    <tr>
        <td width="204" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Computer equipment</font></p> </td>
        <td width="216" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>30%</font></p> </td> </tr>
    <tr>
        <td width="204" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Leasehold improvements</font></p> </td>
        <td width="216" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Straight line over the term of the lease</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Intellectual property</font></b></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>External costs relating to the Company&#146;s patents are recorded at cost, net of recoveries. Amortization of intellectual property is on a straight-line basis over the lesser of the patents&#146; legal life or its estimated useful life (currently estimated to be 10 years) and begins on the earlier of a patent being granted or its utilization. The Company assesses potential impairment of its intellectual property when any events that might give rise to impairment are known to the Company by measuring the expected net recovery from products based on the use of the intellectual property. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Foreign exchange</font></b></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>Transactions originating in foreign currencies are translated into Canadian dollars at the exchange rate in effect at the date of the transaction. Monetary assets and liabilities are translated at the year-end rate of exchange and non-monetary items are translated at historic exchange rates. Exchange gains and losses are included in net loss for the year.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Research and development</font></b></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>Research costs are expensed as incurred. Development costs that meet specific criteria related to technical, market and financial feasibility will be capitalized. To date, all of the development costs have been expensed.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NOTES TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Loss per common share</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>Basic loss per share is determined using the weighted average number of common shares outstanding during the period.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>The Company uses the treasury stock method to calculate diluted loss per share. Under this method, diluted loss per share is computed in a manner consistent with basic loss per share except that the weighted average shares outstanding are increased to include additional shares from the assumed exercise of options and warrants, if dilutive. The number of additional shares is calculated by assuming that any outstanding &#147;in the money&#148; options and warrants were exercised at the later of the beginning of the period or the date of issue and that the proceeds from such exercises were used to acquire shares of common stock at the average market price during the reporting period.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Stock option plan</font></b></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>The Company has one stock option plan (the &#147;Plan&#148;) available to officers, directors, employees, consultants and suppliers with grants under the Plan approved from time to time by the Board of Directors. Under the Plan, the exercise price of each option equals the market price of the Company&#146;s stock on the date of grant in accordance with Toronto Stock Exchange guidelines. Vesting is determined at the discretion of the Board and the expiration of options is to be no greater than ten years from the date of grant. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Stock based compensation</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Officers, Directors and Employees</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Effective January 1, 2003, the Company prospectively adopted the fair value based method of accounting for employee awards granted under its stock option plan (see note 10). The Company calculates the fair value of each stock option grant using the Black Scholes Option Pricing Model and the fair value is recorded over the option&#146;s vesting period on a straight line basis. The following tables provide pro forma net loss and pro forma basic and diluted net loss per share had compensation expense, for awards granted in 2002, been based on the fair value method of accounting for stock based compensation:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NOTES TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>


<table border="0" cellspacing=0 cellpadding=0 width="589" style=' border-collapse:collapse'>
    <tr>
        <td width="302" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="94" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="98" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='border-top:solid black .25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=top style='border-top:solid black .25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=top style='border-top:solid black .25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="98" valign=top style='border-top:solid black .25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Reported net loss</font></p> </td>
        <td width="94" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:13.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>14,297,524</font></p> </td>
        <td width="94" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:13.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12,781,831</font></p> </td>
        <td width="98" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:13.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12,956,119</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Compensation expense</font></p> </td>
        <td width="94" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:48.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="94" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:43.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>983</font></p> </td>
        <td width="98" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4,425</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Pro forma net loss</font></p> </td>
        <td width="94" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:13.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>14,297,524</font></p> </td>
        <td width="94" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:13.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12,782,814</font></p> </td>
        <td width="98" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:13.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12,960,544</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Reported basic and diluted net loss per share</font></p> </td>
        <td width="94" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:36.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(0.39)</font></p> </td>
        <td width="94" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:36.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(0.39)</font></p> </td>
        <td width="98" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:36.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(0.45)</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Pro forma basic and diluted net loss per share</font></p> </td>
        <td width="94" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:36.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(0.39)</font></p> </td>
        <td width="94" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:36.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(0.39)</font></p> </td>
        <td width="98" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:36.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(0.45)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>As this policy has been applied prospectively, comparative information has not been restated. </font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><i><b><font size=2>Non-employees </font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Stock based compensation to non-employees is recorded at the fair market value based on the fair value of the consideration received, or the fair value of the equity instruments granted, or liabilities incurred, whichever is more reliably measurable, on the earlier of the date at which a performance commitment is reached, performance is achieved, or the vesting date of the options.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Future income taxes</font></b></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>The Company follows the liability method of accounting for income taxes. Under the liability method, future income taxes are recognized for the difference between financial statement carrying values and the respective income tax basis of assets and liabilities (temporary differences). Future income tax assets and liabilities are measured using substantively enacted income tax rates expected to apply in the years in which temporary differences are expected to be recovered or settled. The effect on future income tax assets and liabilities of a change in tax rates is included in income in the period of the change.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Future Changes in Accounting Policy</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Financial Instruments</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>On January 1, 2007, the Company will prospectively adopt the new Canadian accounting standards for financial instruments and comprehensive income. These new accounting standards will impact our accounting policy for investment securities. The new rules will require the Company to classify these securities as held-to-maturity or available-for-sale. Available-for-sale securities will be measured at fair value with gains and losses recorded in a new section of shareholders&#146; equity called other comprehensive income. There will be no change in accounting for held-to-maturity securities. The Company does not expect these standards to have a significant impact on its financial statements upon adoption as the Company&#146;s short-term investments are expected to be classified as held-to-maturity securities. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NOTES TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>


<table border="0" cellspacing=0 cellpadding=0 width="533" style=' margin-left:0in;border-collapse:collapse'>
    <tr >
        <td  width="5">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>4.</font></b></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>PROPERTY AND EQUIPMENT </font></B></p> </td>
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td  colspan="3" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:12.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="4" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td> </tr>
    <tr>
        <td  colspan="3" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Cost</font></b></p> </td>
        <td width="102" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Accumulated Amortization</font></b></p> </td>
        <td width="72" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Net Book Value</font></b></p> </td> </tr>
    <tr>
        <td  colspan="3" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Medical equipment</font></b></p> </td>
        <td  colspan="2" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>30,201</font></b></p> </td>
        <td width="102" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:21.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>11,382</font></b></p> </td>
        <td width="72" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>18,819</font></b></p> </td> </tr>
    <tr>
        <td  colspan="3" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Office equipment</font></b></p> </td>
        <td  colspan="2" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>32,818</font></b></p> </td>
        <td width="102" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:21.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>19,758</font></b></p> </td>
        <td width="72" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>13,060</font></b></p> </td> </tr>
    <tr>
        <td  colspan="3" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Office furniture</font></b></p> </td>
        <td  colspan="2" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>97,160</font></b></p> </td>
        <td width="102" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:21.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>55,999</font></b></p> </td>
        <td width="72" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>41,161</font></b></p> </td> </tr>
    <tr>
        <td  colspan="3" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Computer equipment</font></b></p> </td>
        <td  colspan="2" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:8.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>185,955</font></b></p> </td>
        <td width="102" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:17.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>109,399</font></b></p> </td>
        <td width="72" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>76,556</font></b></p> </td> </tr>
    <tr>
        <td  colspan="3" valign=top style=' border-bottom:solid black .5pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Leasehold improvements</font></b></p> </td>
        <td  colspan="2" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>99,830</font></b></p> </td>
        <td width="102" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:21.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>99,830</font></b></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:29.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>&#151;</font></b></p> </td> </tr>
    <tr>
        <td  colspan="3" valign=top style=' border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:12.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='border-bottom: solid black 2.25pt;padding: 0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:8.25pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>445,964</font></b></p> </td>
        <td width="102" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:17.25pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>296,368</font></b></p> </td>
        <td width="72" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:8.25pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>149,596</font></b></p> </td> </tr>
    <tr>
        <td  colspan="3" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:12.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="4" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>2005</font></b></p> </td> </tr>
    <tr>
        <td  colspan="3" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Cost</font></b></p> </td>
        <td width="102" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Accumulated Amortization</font></b></p> </td>
        <td width="72" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Net Book Value</font></b></p> </td> </tr>
    <tr>
        <td  colspan="3" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Medical equipment</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>30,201</font></p> </td>
        <td width="102" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:28.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>7,178</font></p> </td>
        <td width="72" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>23,023</font></p> </td> </tr>
    <tr>
        <td  colspan="3" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Office equipment</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>27,869</font></p> </td>
        <td width="102" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:23.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>17,627</font></p> </td>
        <td width="72" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10,242</font></p> </td> </tr>
    <tr>
        <td  colspan="3" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Office furniture</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>91,080</font></p> </td>
        <td width="102" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:23.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>49,840</font></p> </td>
        <td width="72" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>41,240</font></p> </td> </tr>
    <tr>
        <td  colspan="3" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Computer equipment</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:9.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>167,111</font></p> </td>
        <td width="102" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:23.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>84,561</font></p> </td>
        <td width="72" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>82,550</font></p> </td> </tr>
    <tr>
        <td  colspan="3" valign=top style=' border-bottom:solid black .5pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Leasehold improvements</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:9.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>117,333</font></p> </td>
        <td width="102" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:23.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>84,525</font></p> </td>
        <td width="72" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>32,808</font></p> </td> </tr>
    <tr>
        <td  colspan="3" valign=top style=' border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:12.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='border-top:solid black .75pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:9.75pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>433,594</font></p> </td>
        <td width="102" valign=top style='border-top:solid black .75pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>243,731</font></p> </td>
        <td width="72" valign=top style='border-top:solid black .75pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:9.75pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>189,863</font></p> </td> </tr>
    <tr>
        <td width="5" ></td>

        <td width="48" ></td>

        <td width="234" ></td>

        <td width="14" ></td>

        <td width="58" ></td>

        <td width="102" ></td>

        <td width="72" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In 2005, the Company donated the medical equipment used in its Canadian glioma clinical trial to the clinical trial site. The amount of the donation was $66,069 and equates to the net book value of the medical equipment donated. This amount has been recorded as a clinical trial cost within research and development expenses. </font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>5.</font></b></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>INTELLECTUAL PROPERTY</font></B></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="287" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:12.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td> </tr>
    <tr>
        <td width="287" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Cost</font></b></p> </td>
        <td width="102" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Accumulated Amortization</font></b></p> </td>
        <td width="72" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Net Book Value</font></b></p> </td> </tr>
    <tr>
        <td width="287" valign=top style='border-bottom: solid black 2.25pt;padding: 0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:12.0pt;margin-bottom: 0in'><font size=2>Intellectual property</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:.75pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>9,116,637</font></b></p> </td>
        <td width="102" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0in;text-indent:9.75pt;text-align:left;margin-top:12.0pt;margin-bottom: 0in'><b><font size=2>4,036,832</font></b></p> </td>
        <td width="72" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:.75pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>5,079,805</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NOTES TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'>
</p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="287" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:12.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>2005</font></b></p> </td> </tr>
    <tr>
        <td width="287" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Cost</font></b></p> </td>
        <td width="102" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Accumulated Amortization</font></b></p> </td>
        <td width="72" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Net Book Value</font></b></p> </td> </tr>
    <tr>
        <td width="287" valign=top style='border-bottom: solid black 2.25pt;padding: 0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:12.0pt;margin-bottom: 0in'><font size=2>Intellectual property</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>8,273,328</font></p> </td>
        <td width="102" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0in;text-indent:11.25pt;text-align:left;margin-top:12.0pt;margin-bottom: 0in'><font size=2>3,162,790</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>5,110,538</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>6.</font></b></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>ALBERTA HERITAGE FOUNDATION LOAN</font></B></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>The Company has received a loan of $150,000 from the Alberta Heritage Foundation for Medical Research. Pursuant to the terms of the agreement, the Company is required to repay this amount in annual installments from the date of commencement of sales in an amount equal to the lesser of:  (a) 5% of the gross sales generated by the Company; or (b) $15,000 per annum until the entire loan has been paid in full.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>7.</font></b></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>COMMITMENTS</font></B></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>The Company is committed to payments totaling $650,000 during 2007 for activities related to its clinical trial program and collaborations. As at December 31, 2006, there were no commitments beyond 2007. </font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>The Company is committed to monthly rental payments (excluding the Company&#146;s portion of operating costs) of $7,453 under the terms of a lease for office premises, which expires on May 31, 2011. </font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>Under a clinical trial agreement entered into with the Alberta Cancer Board (&#147;ACB&#148;), the Company has agreed to repay the amount funded under the agreement together with a royalty, to a combined maximum amount of $400,000 plus an overhead repayment of $100,000, upon sales of a specified product. The Company agreed to repay the ACB in annual installments in an amount equal to the lesser of:  (a) 5% of gross sales of a specified product; or (b) $100,000 per annum commencing with the sale of product.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>8.</font></b></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>CONTINGENCY</font></B></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>During 1999, the Company entered into an agreement that assumed certain obligations (the &#147;Assumption Agreement&#148;) in connection with a Share Purchase Agreement (the &#147;Agreement&#148;) between SYNSORB and the former shareholders of the Company to make milestone payments and royalty payments.</font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>As of December 31, 2006, a milestone payment for $1.0 million will be due within 90 days of the first receipt from an Appropriate Regulatory Authority, for marketing approval to sell REOLYSIN<sup>&reg;</sup> to the public or the approval of a new drug application for REOLYSIN<sup>&reg;</sup>.</font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>This milestone payment, when payable, will be accounted for as research and development expense and will not be deductible for tax purposes.</font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>In addition to the milestone payment, payments may become due and payable in accordance with the Agreement upon realization of sales of REOLYSIN<sup>&reg;</sup>. In 2003, the Company completed amendments and revisions to the contingent obligations to its five founding shareholders with respect to these other contingent payments. The amendments and revisions reduced the amount and clarified the determination of potential obligations of the Company to these shareholders arising from the Agreement and Assumption Agreement entered into in 1999. Also, on September 23, 2004, the Company reached an agreement that </font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NOTES TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>further reduced its contingent payments to its founding shareholders through the cancellation of a portion of these contingent payments from one of its non-management founding shareholders. The consideration paid by the Company consisted of $250,000 cash and 21,459 common shares valued at $150,000 and has been recorded as research and development expense. The value of the common shares was based on the closing market price on September 23, 2004.</font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>As a result of the amendments and the cancellation agreement, if the Company receives royalty payments or other payments as a result of entering into partnerships or other arrangements for the development of the reovirus technology, the Company is obligated to pay to the founding shareholders 11.75% (formerly in 2003 &#150; 14.25% and 2002 &#150; 20%) of the royalty payments and other payments received. Alternatively, if the Company develops the reovirus treatment to the point where it may be marketed at a commercial level, the payments referred to in the foregoing sentence will be amended to a royalty payment of 2.35% (formerly in 2003 &#150; 2.85% and 2002 &#150; 4%) of Net Sales received by the Company for such products.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NOTES TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Para Hang" FSL="Default" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>9.</B> </FONT> </TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>SHARE
CAPITAL </B> </FONT></TD>
</TR>
</TABLE>
<BR>


<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Authorized:</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Unlimited number of no par value common shares</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="629" style=' border-collapse:collapse'>
    <tr>
        <td width="317" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><b><font size=2>Issued</font></b><font size=2>:</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>Shares</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>Warrants</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>Number</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>Amount</font></b><br> <b><font size=2>$</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>Number</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>Amount</font></b><br> <b><font size=2>$</font></b></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:9.0pt;margin-bottom:0in'><font size=2>Balance, December 31, 1998</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>2,145,300</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:41.25pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>4</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>Issued on exercise of stock options</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>76,922</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:36.75pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>77</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='border-bottom: solid black 2.25pt;padding: 0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:9.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>2,222,222</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:36.75pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>81</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:9.0pt;margin-bottom:0in'><font size=2>July 29, 1999 share split <sup>(a)</sup></font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>6,750,000</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:36.75pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>81</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr style='height:27.0pt'>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:27.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=2>Issued for cash pursuant to July 30, 1999 private placement (net of share issue costs of $45,000) <sup>(b)</sup></font></p> </td>
        <td width="78" style='padding:0in 4.0pt 0in 4.0pt;height:27.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>1,500,000</font></p> </td>
        <td width="78" style='padding:0in 4.0pt 0in 4.0pt;height:27.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>855,000</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:27.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:27.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=2>Issued for cash pursuant to August 24, 1999 private placement</font></p> </td>
        <td width="78" style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>1,399,997</font></p> </td>
        <td width="78" style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>1,049,998</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=2>Issued on initial public offering (net of share issue costs of $317,897)<sup> (c)</sup></font></p> </td>
        <td width="78" style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>4,000,000</font></p> </td>
        <td width="78" style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>3,082,103</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=2>Issued for cash pursuant to exercise of share purchase warrants<sup> </sup></font></p> </td>
        <td width="78" style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>20,000</font></p> </td>
        <td width="78" style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>15,000</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr style='height:21.0pt'>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt;height:21.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Balance, December 31, 1999</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt;height:21.0pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>13,669,997</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt;height:21.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>5,002,182</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt;height:21.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt;height:21.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr style='height:21.0pt'>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:21.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Issued on exercise of stock options and warrants</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:21.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>573,910</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:21.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>501,010</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:21.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:21.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=2>Issued for cash pursuant to July 17, 2000 private placement <sup>(d)</sup></font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>244,898</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>2,998,645</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=2>Issued on public offering (net of share issue costs of $998,900)<sup> (e)</sup></font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>3,000,000</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:9.0pt;margin-bottom:0pt'><font size=2>13,101,100</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='border-top:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Balance, December 31, 2000</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>17,488,805</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>21,602,937</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Issued on exercise of stock options and warrants</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>1,702,590</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>2,210,016</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Balance, December 31, 2001</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>19,191,395</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>23,812,953</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Issued on exercise of stock options </font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>40,000</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>34,000</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Issued on acquisition of the interest in Transition Therapeutics Inc. </font><i><font size=2>[note 8]</font></i><i></i></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,913,889</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>4,689,028</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Issued for cash pursuant to December 11, 2002 private placement <sup>(f)</sup></font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,000,000</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,896,714</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>550,000</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>114,286</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Share issue costs</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:10.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>(241,123)</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='border-bottom: solid black 2.25pt;padding: 0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Balance, December 31, 2002</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>22,145,284</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>30,191,572</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>550,000</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>114,286</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NOTES TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>


<table border="0" cellspacing=0 cellpadding=0 width="629" style=' border-collapse:collapse'>
    <tr>
        <td width="317" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><b><font size=2>Issued</font></b><font size=2>:</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>Shares</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>Warrants</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Balance, December 31, 2002</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>22,145,284</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>30,191,572</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>550,000</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>114,286</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Issued for cash pursuant to February 10, 2003 private placement<sup> (g)</sup></font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>140,000</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>265,540</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>77,000</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>16,000</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Issued for cash pursuant to June 19, 2003 private placement <sup>(h)</sup></font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>2,120,000</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>5,912,113</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,272,000</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>543,287</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Issued for cash pursuant to August 21, 2003 private placement<sup> (i)</sup></font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,363,900</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>3,801,778</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>813,533</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>349,176</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Issued for cash pursuant to October 14, 2003 public offering<sup> (j)</sup></font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,200,000</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>5,528,972</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>720,000</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>617,428</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Exercise of options</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>64,700</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>149,615</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Exercise of warrants</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>174,378</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>593,194</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:10.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>(174,378)</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>(41,927)</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Share issue costs</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>(1,730,195)</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Balance, December 31, 2003</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>27,208,262</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>44,712,589</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>3,258,155</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>1,598,250</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Issued for cash pursuant to April 7, 2004 private placement<sup>(k)</sup></font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,077,100</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>5,924,050</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>646,260</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,028,631</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Issued for cash pursuant to pursuant to November 23, 2004 public offering<sup>(l)</sup></font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,504,000</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>8,693,120</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>864,800</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,521,672</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>Issued pursuant to cancellation of contingent </font><br> <font size=2>payment </font><i><font size=2>[note 10]</font></i><i></i></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>21,459</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>150,000</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>Exercise of warrants</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>1,907,175</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>8,178,546</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>(1,907,175)</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:10.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>(798,096)</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>Expired warrants</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:20.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>(6,700)</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:20.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>(2,827)</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>Exercise of options</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>197,500</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>778,951</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="317" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>Share issue costs</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>(1,796,758)</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr style='height:16.65pt'>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>Balance, December 31, 2004</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>31,915,496</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>66,640,498</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>2,855,340</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>3,347,630</font></p> </td> </tr>
    <tr style='height:16.65pt'>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Issued for cash pursuant to December 29, 2005 private placement<sup>(m)</sup></font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>3,200,000</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>14,176,000</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,920,000</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>2,908,800</font></p> </td> </tr>
    <tr style='height:16.65pt'>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Exercise of warrants</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>771,252</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>3,417,271</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:10.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>(771,252)</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:10.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>(329,984)</font></p> </td> </tr>
    <tr style='height:16.65pt'>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Expired warrants</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>(1,219,288)</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>(1,496,514)</font></p> </td> </tr>
    <tr style='height:16.65pt'>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Exercise of options</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>350,000</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>297,500</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr style='height:16.65pt'>
        <td width="317" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Share issue costs</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>(1,689,398)</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr style='height:16.65pt'>
        <td width="317" valign=top style='border-bottom: solid black 2.25pt;padding: 0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Balance, December 31, 2005</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>36,236,748</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>82,841,871</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>2,784,800</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>4,429,932</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NOTES TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>


<table border="0" cellspacing=0 cellpadding=0 width="629" style=' border-collapse:collapse'>
    <tr>
        <td width="317" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><b><font size=2>Issued</font></b><font size=2>:</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>Shares</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>Warrants</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:16.65pt'>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Balance, December 31, 2005</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>36,236,748</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>82,841,871</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>2,784,800</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>4,429,932</font></p> </td> </tr>
    <tr style='height:16.65pt'>
        <td width="317" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Exercise of options</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>284,000</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>241,400</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr style='height:16.65pt'>
        <td width="317" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><font size=2>Expired warrants</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:0pt;text-indent:10.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>(112,800)</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:0pt;text-indent:10.5pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>(213,192)</font></p> </td> </tr>
    <tr style='height:16.65pt'>
        <td width="317" valign=top style='border-bottom: solid black 2.25pt;padding: 0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:7.0pt;margin-bottom:0in'><b><font size=2>Balance, December 31, 2006</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><b><font size=2>36,520,748</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><b><font size=2>83,083,271</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><b><font size=2>2,672,000</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt; height:16.65pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><b><font size=2>4,216,740</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Pursuant to subsection 167(1)(f) of the Business Corporations Act (Alberta), the Articles of the Company were amended by subdividing the 2,222,222 issued and outstanding common shares of the Company into 6,750,000 common shares.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Pursuant to a private placement, 1,500,000 common share purchase warrants were issued entitling the holders thereof to acquire one additional share at $0.75 per share until November&nbsp;8, 2001. At December 31, 2001, all of the warrants had been exercised.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Pursuant to the initial public offering, the agent was issued common share purchase warrants entitling it to acquire 400,000 common shares at $0.85 per share until May 8, 2001. At December 31, 2001, all of the warrants had been exercised.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td  valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Pursuant to the private placement, 244,898 common shares were issued at an issue price of $12.25 per share net of issue costs of $1,355.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(e)</font></p> </td>
        <td  valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Pursuant to a special warrant offering, the Company sold 3,000,000 special warrants for $4.70 per warrant for net proceeds of $13,101,100. Each warrant entitled the holder to one common share upon exercise. At December 31, 2001, all of the warrants had been exercised.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(f)</font></p> </td>
        <td  valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Pursuant to a private placement, 1,000,000 units were issued at an issue price of $2.00 per unit net of issue costs of $241,123. Each unit included one common share (ascribed value of $1.897) and one-half of one common share purchase warrant (ascribed value of $0.103) for a total of 500,000 warrants. Each whole common share purchase warrant entitles the holder to acquire one common share in the capital of the Company upon payment of $3.00 per share until June 11, 2004. In addition, the Company issued 50,000 common share purchase warrants on the same terms to the brokerage firm assisting with the transaction. The ascribed value of these broker warrants was $11,000 ($0.22 per broker warrant) and has been included in the issue costs. The ascribed values of the warrants were based on the Black Scholes Option Pricing Model.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(g)</font></p> </td>
        <td  valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Pursuant to a private placement, 140,000 units were issued at an issue price of $2.00 per unit net of issue costs of $37,369. Each unit included one common share (ascribed value of $1.897) and one-half of one common share purchase warrant (ascribed value of $0.103) for a total of 70,000 warrants. Each whole common share purchase warrant entitles the holder to acquire one common share in the capital of the Company upon payment of $3.00 per share until August 10, 2004. In addition, the Company issued 7,000 common share purchase warrants on the same terms to the brokerage firm assisting with the transaction. The ascribed value of these broker warrants was $1,540 ($0.22 per broker warrant) and has been included in the issue costs. The ascribed values of the warrants were based on the Black Scholes Option Pricing Model.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NOTES TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(h)</font></p> </td>
        <td  valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Pursuant to a private placement, 2,120,000 units were issued at an issue price of $3.00 per unit net of issue costs of $637,986. Each unit included one common share (ascribed value of $2.789) and one-half of one common share purchase warrant (ascribed value of $0.211) for a total of 1,060,000 warrants. Each whole common share purchase warrant entitles the holder to acquire one common share in the capital of the Company upon payment of $4.00 per share until December 19, 2004. In addition, the Company issued 212,000 common share purchase warrants on the same terms to the brokerage firms assisting with the transaction. The ascribed value of these broker warrants was $95,400 ($0.45 per broker warrant) and has been included in the issue costs. The ascribed values of the warrants were based on the Black Scholes Option Pricing
Model.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(i)</font></p> </td>
        <td  valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Pursuant to a private placement, 1,363,900 common shares and 681,943 common share purchase warrants were issued for gross proceeds of $4,091,738. Each common share and whole common share purchase warrant have ascribed values of $2.787 and $0.425 respectively. Each common share purchase warrant entitles the holder to acquire one common share in the capital of the Company upon payment of $4.00 per share until February 21, 2005. Share issue costs related to this private placement were $367,839. In addition, the Company issued 131,590 common share purchase warrants on the same terms to the advisors assisting with the transaction.  The ascribed value of these additional warrants was $59,216 ($0.45 per additional warrant) and has been included in the issue costs. The ascribed values of the warrants were based on the Black Scholes
Option Pricing Model.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(j)</font></p> </td>
        <td  valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Pursuant to a public offering, 1,200,000 units were issued at an issue price of $5.00 per unit net of issue costs of $687,001. Each unit included one common share (ascribed value of $4.607) and one-half of one common share purchase warrant (ascribed value of $0.393) for a total of 600,000 warrants. Each whole common share purchase warrant entitles the holder to acquire one common share in the capital of the Company upon payment of $6.25 per share until April 14, 2005. In addition, the Company issued 120,000 common share purchase warrants with an exercise price of $5.00 that expires on April 14, 2005 to the brokerage firms assisting with the transaction. The ascribed value of these broker warrants was $146,400 ($1.19 per broker warrant) and has been included in the issue costs. The ascribed values of the warrants were based on
the Black Scholes Option Pricing Model.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(k)</font></p> </td>
        <td  valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Pursuant to a private placement, the Company sold 1,077,100 units at an average price of $6.25 per unit for gross cash proceeds of $6,731,875. The units were comprised of 1,077,100 common shares and 538,550 common share purchase warrants and have ascribed values of $5.50 and $1.50 respectively. Each common share purchase warrant entitles the holder to acquire one common share in the capital of the Company upon payment of $7.75 per share until October 7, 2005. Share issue costs related to the private placement were $728,918. In addition, the Company issued 107,710 common share purchase warrants to its advisor entitling the holder to acquire one common share of the capital of the Company upon payment of $7.00 per share until October 7, 2005. The ascribed value of these additional warrants was $220,806 ($2.05 per additional
warrant) and has been included in the share issue costs above. The ascribed values of the warrants were based on the Black Scholes Option Pricing Model. </font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(l)</font></p> </td>
        <td  valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Pursuant to a public offering, the Company sold 1,504,000 units at an issue price of $6.65 per unit for gross cash proceeds of $10,001,600. Each unit included one common share (ascribed value of $5.78) and one-half of one common share purchase warrant (ascribed value of $0.87) for a total of 752,000 warrants. Each whole common share purchase warrant entitles the holder to acquire one common share in the capital of the Company upon payment of $8.00 per share until November 23, 2007. Share issue costs related to this public offering were $ 1,063,890. In addition, the Company issued 112,800 common share purchase warrants with an exercise price of $7.06 that expires on May 23, 2006 to the brokerage firm assisting with the transaction. The ascribed value of these broker warrants was $213,192 ($1.89 per broker warrant) and has been
included in the share issue costs above. The ascribed values of the warrants were based on the Black Scholes Option Pricing Model.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NOTES TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(m)</font></p> </td>
        <td  valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Pursuant to a private placement, 3,200,000 units were issued at an issue price of $5.15 per unit net of issue costs of $1,689,398. Each unit included one common share (ascribed value of $4.43) and one-half of one common share purchase warrant (ascribed value of $0.72) for a total of 1,600,000 warrants. Each whole common share purchase warrant entitles the holder to acquire one common share in the capital of the Company upon payment of $6.15 per share until December 29, 2008. In addition, the Company issued 320,000 common share purchase warrants with an exercise price of $5.65 expiring on December 29, 2008. The ascribed value of these broker warrants was $604,800 ($1.89 per broker warrant) and has been included in the issue costs. The ascribed values of the warrants were based on the Black Scholes Option Pricing Model.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>The following table summarizes the weighted average assumptions used in the Black Scholes Model with respect to the valuation of warrants and broker warrants issued in those years:</font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="221" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="69" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2005</font></b></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2003</font></b></p> </td>
        <td width="81" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2002</font></b></p> </td> </tr>
    <tr>
        <td colspan=6> <HR size=1> </td> </tr>
    <tr>
        <td width="221" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="69" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="221" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Risk-free interest rate</font></p> </td>
        <td width="69" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>3.82%</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2.82%</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>3.01%</font></p> </td>
        <td width="81" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>3.41%</font></p> </td> </tr>
    <tr>
        <td width="221" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Expected hold period to exercise</font></p> </td>
        <td width="69" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>1.92</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>1.39</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>0.76</font></p> </td>
        <td width="81" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>1.00</font></p> </td> </tr>
    <tr>
        <td width="221" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Volatility in the price of the Company&#146;s shares</font></p> </td>
        <td width="69" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <b><font size=2>&#151;</font></b></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>66%</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>71%</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>72%</font></p> </td>
        <td width="81" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>57%</font></p> </td> </tr>
    <tr>
        <td width="221" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Dividend yield</font></p> </td>
        <td width="69" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Zero</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Zero</font></p> </td>
        <td width="76" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Zero</font></p> </td>
        <td width="81" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Zero</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>The following table summarizes the Company&#146;s outstanding warrants as at December 31, 2006:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="577" style=' border-collapse:collapse'>
    <tr>
        <td width="61" valign=bottom style='border-bottom: solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Exercise Price</font></b></p> </td>
        <td width="90" valign=bottom style='border-bottom: solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Outstanding, Beginning of the Year </font></b></p> </td>
        <td width="84" valign=bottom style='border-bottom: solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Granted During the Year</font></b></p> </td>
        <td width="78" valign=bottom style='border-bottom: solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Exercised During the Year</font></b></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <br> <b><font size=2>Expired During the Year</font></b></p> </td>
        <td width="90" valign=bottom style='border-bottom: solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Outstanding, End of Year</font></b></p> </td>
        <td width="83" valign=bottom style='border-bottom: solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Weighted Average Remaining Contractual Life (years)</font></b></p> </td> </tr>
    <tr>
        <td width="61" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>$5.65</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>320,000</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>320,000</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:35.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>2.00</font></p> </td> </tr>
    <tr>
        <td width="61" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>$6.15</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>1,600,000</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>1,600,000</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:35.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>2.00</font></p> </td> </tr>
    <tr>
        <td width="61" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>$7.06</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>112,800</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>112,800</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="61" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>$8.00</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>752,000</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>752,000</font></p> </td>
        <td width="83" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:35.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>0.90</font></p> </td> </tr>
    <tr>
        <td width="61" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>2,784,800</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>112,800</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>2,672,000</font></p> </td>
        <td width="83" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:35.25pt;text-align:left;margin-top:7.0pt;margin-bottom:0pt'><font size=2>1.74</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.25in; text-indent:-0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NOTES TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Para Hang" FSL="Default" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>10.</B> </FONT> </TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>STOCK
BASED COMPENSATION </B> </FONT></TD>
</TR>
</TABLE>
<BR>


<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><b><font size=2>Stock Option Plan</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Company has issued stock options to acquire common stock through its stock option plan of which the following are outstanding at December 31:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="533" style=' border-collapse:collapse'>
    <tr style='height:16.65pt'>
        <td width="233" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:8.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style=' border-bottom:solid black .75pt;padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td>
        <td  colspan="2" valign=top style=' border-bottom:solid black .75pt;padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><b><font size=2>2005</font></b></p> </td> </tr>
    <tr>
        <td width="233" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .75pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><br> <br> <b><font size=2>Stock Options</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .75pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>Weighted Average Share Price</font></b><br> <b><font size=2>$</font></b></p> </td>
        <td width="66" valign=top style='border-bottom:solid black .75pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><br> <br> <b><font size=2>Stock Options</font></b></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .75pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>Weighted Average Share Price</font></b><br> <b><font size=2>$</font></b></p> </td> </tr>
    <tr>
        <td width="233" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:8.0pt;margin-bottom:0in'><font size=2>Outstanding at beginning of year</font></p> </td>
        <td width="72" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:.75pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><b><font size=2>3,634,550</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:22.5pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><b><font size=2>4.66</font></b></p> </td>
        <td width="66" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>3,805,550</font></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:23.25pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>4.39</font></p> </td> </tr>
    <tr>
        <td width="233" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=2>Granted during year</font></p> </td>
        <td width="72" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:8.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>187,400</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:22.5pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>3.08</font></b></p> </td>
        <td width="66" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:9.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>200,000</font></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:23.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>3.18</font></p> </td> </tr>
    <tr>
        <td width="233" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=2>Cancelled during year</font></p> </td>
        <td width="72" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:29.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:29.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="66" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:7.5pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>(21,000)</font></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:29.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="233" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=2>Exercised during year</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .75pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:4.5pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>(284,000)</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:22.5pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><b><font size=2>0.85</font></b></p> </td>
        <td width="66" valign=top style='border-bottom:solid black .75pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>(350,000)</font></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:23.25pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>0.85</font></p> </td> </tr>
    <tr>
        <td width="233" valign=top style='border-bottom: solid black 2.25pt;padding: 0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:8.0pt;margin-bottom:0in'><font size=2>Outstanding at end of year</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:.75pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><b><font size=2>3,537,950</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:22.5pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><b><font size=2>4.88</font></b></p> </td>
        <td width="66" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>3,634,550</font></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:23.25pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>4.66</font></p> </td> </tr>
    <tr>
        <td width="233" valign=top style='border-bottom: solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:8.0pt;margin-bottom:0in'><font size=2>Options exercisable at end of year</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:.75pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><b><font size=2>3,355,450</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:22.5pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><b><font size=2>4.98</font></b></p> </td>
        <td width="66" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>3,387,050</font></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:23.25pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>4.77</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>The following table summarizes information about the stock options outstanding and exercisable at December 31, 2006:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="535" style=' border-collapse:collapse'>
    <tr>
        <td width="109" valign=bottom style='border-bottom: solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Range of Exercise Prices</font></b></p> </td>
        <td width="90" valign=bottom style='border-bottom: solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Number Outstanding </font></b></p> </td>
        <td width="84" valign=bottom style='border-bottom: solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Weighted Average Remaining Contractual Life (years)</font></b></p> </td>
        <td width="78" valign=bottom style='border-bottom: solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Weighted Average Exercise Price</font></b><br> <b><font size=2>$</font></b></p> </td>
        <td width="90" valign=bottom style='border-bottom: solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Number Exercisable </font></b></p> </td>
        <td width="83" valign=bottom style='border-bottom: solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Weighted Average Exercise Price</font></b><br> <b><font size=2>$</font></b></p> </td> </tr>
    <tr>
        <td width="109" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>$0.75 - $1.00</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>348,550</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>2.8</font></p> </td>
        <td width="78" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>0.85</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>348,550</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>0.85</font></p> </td> </tr>
    <tr>
        <td width="109" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$1.65 - $2.37</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>368,400</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>6.9</font></p> </td>
        <td width="78" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>1.95</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>348,400</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>1.95</font></p> </td> </tr>
    <tr>
        <td width="109" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$2.70 - $3.33</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>728,750</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>7.0</font></p> </td>
        <td width="78" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>3.13</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>578,750</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>3.12</font></p> </td> </tr>
    <tr>
        <td width="109" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$4.00 - $5.00</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:8.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1,240,750</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>7.8</font></p> </td>
        <td width="78" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>4.86</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:7.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1,228,250</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>4.86</font></p> </td> </tr>
    <tr>
        <td width="109" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$6.77 - $9.76</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>708,500</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>5.2</font></p> </td>
        <td width="78" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>8.66</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>708,500</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>8.66</font></p> </td> </tr>
    <tr>
        <td width="109" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$12.15 - $13.50</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>143,000</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>3.8</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>12.63</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>143,000</font></p> </td>
        <td width="83" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>12.63</font></p> </td> </tr>
    <tr>
        <td width="109" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:8.25pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>3,537,950</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>6.4</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>4.88</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:7.5pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>3,355,450</font></p> </td>
        <td width="83" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>4.98</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>Options granted vest immediately or annually over one, three or four years at the discretion of the Board. The Company has reserved 3,538,461 common shares for issuance relating to outstanding stock options. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>As the Company is following the fair value based method of accounting for stock option awards, compensation expense related to options granted to employees and consultants was $403,550 (2005 &#150; $43,886; 2004 &#150; $2,537,088) and $nil (2005 &#150; $20,218; 2004 &#150; $131,482) respectively with an offsetting credit to contributed surplus.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NOTES TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'>
<font size=2>The estimated fair value of stock options issued during the year was determined using the Black-Scholes model using the following weighted average assumptions and fair value of options: </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="309" valign=top style='border-bottom: solid black .50pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=top style='border-bottom:solid black .50pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .50pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2005</font></b></p> </td>
        <td width="105" valign=top style='border-bottom:solid black .50pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b></p> </td> </tr>
    <tr>
        <td width="309" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="105" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="309" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Risk-free interest rate</font></p> </td>
        <td width="86" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>4.08%</font></b></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>3.27%</font></p> </td>
        <td width="105" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2.83%</font></p> </td> </tr>
    <tr>
        <td width="309" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Expected hold period to exercise</font></p> </td>
        <td width="86" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>3.5 years</font></b></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>3.5 years</font></p> </td>
        <td width="105" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2 years</font></p> </td> </tr>
    <tr>
        <td width="309" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Volatility in the price of the Company&#146;s shares</font></p> </td>
        <td width="86" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>63%</font></b></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>64%</font></p> </td>
        <td width="105" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>71%</font></p> </td> </tr>
    <tr>
        <td width="309" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Dividend yield</font></p> </td>
        <td width="86" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Zero</font></b></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Zero</font></p> </td>
        <td width="105" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Zero</font></p> </td> </tr>
    <tr>
        <td width="309" valign=top style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted average fair value of options</font></p> </td>
        <td width="86" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$1.46</font></b></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$1.51</font></p> </td>
        <td width="105" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$2.26</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>11.</font></b></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>CONTRIBUTED SURPLUS </font></B></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>The following table summarizes the change in contributed surplus for the period ending December 31:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="542" style=' border-collapse:collapse'>
    <tr>
        <td width="336" valign=top style='border-bottom:solid black .50pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=top style='border-bottom:solid black .50pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td>
        <td width="112" valign=top style='border-bottom:solid black .50pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2005</font></b></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>Balance, beginning of year</font></p> </td>
        <td width="94" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:9.75pt;text-align:left;margin-top:12.0pt;margin-bottom: 0in'><b><font size=2>7,912,584</font></b></p> </td>
        <td width="112" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:11.25pt;text-align:left;margin-top:12.0pt;margin-bottom: 0in'><font size=2>6,351,966</font></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Expired warrants</font></p> </td>
        <td width="94" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:17.25pt;text-align:left;margin-top:12.0pt;margin-bottom: 0in'><b><font size=2>213,192</font></b></p> </td>
        <td width="112" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:11.25pt;text-align:left;margin-top:12.0pt;margin-bottom: 0in'><font size=2>1,496,514</font></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>Stock based compensation</font></p> </td>
        <td width="94" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:17.25pt;text-align:left;margin-top:12.0pt;margin-bottom: 0in'><b><font size=2>403,550</font></b></p> </td>
        <td width="112" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:23.25pt;text-align:left;margin-top:12.0pt;margin-bottom: 0in'><font size=2>64,104</font></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>Exercise of stock options</font></p> </td>
        <td width="94" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:38.25pt;text-align:left;margin-top:12.0pt;margin-bottom: 0in'><font size=2>&#151;</font></p> </td>
        <td width="112" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:38.25pt;text-align:left;margin-top:12.0pt;margin-bottom: 0in'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>Balance end of year</font></p> </td>
        <td width="94" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:47.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>8,529,326</font></b></p> </td>
        <td width="112" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:47.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:8.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>7,912,584</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>12.</font></b></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>LOSS PER COMMON SHARE</font></B></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>Loss per common share is calculated using the weighted average number of common shares outstanding for the year ended December 31, 2006 of 36,346,266 (2005 &#150; 32,804,540; 2004 &#150; 29,028,391). The effect of any potential exercise of the Company&#146;s stock options and warrants outstanding during the year has been excluded from the calculation of diluted earnings per share, as it would be anti-dilutive.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NOTES TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Para Hang" FSL="Default" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>13.</B> </FONT> </TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>INCOME
TAXES</B> </FONT></TD>
</TR>
</TABLE>
<BR>


<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>The provision for income taxes recorded in the financial statements differs from the amount which would be obtained by applying the statutory income tax rate to the loss before tax as follows:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="563" style=' border-collapse:collapse'>
    <tr>
        <td width="305" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .75pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:10.0pt;margin-bottom:0pt'><b><font size=2>2006</font></b><br> <font size=2>$</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .75pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:10.0pt;margin-bottom:0pt'><b><font size=2>2005</font></b><br> <font size=2>$</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .75pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:10.0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><br> <font size=2>$</font></p> </td> </tr>
    <tr>
        <td width="305" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><font size=2>Loss before taxes </font></p> </td>
        <td width="90" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><b><font size=2>(14,297,524)</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><font size=2>(12,783,356)</font></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><font size=2>(12,956,119)</font></p> </td> </tr>
    <tr>
        <td width="305" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Statutory Canadian corporate tax rate</font></p> </td>
        <td width="90" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:21.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>29.00%</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:22.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>33.60%</font></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:22.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>33.87%</font></p> </td> </tr>
    <tr>
        <td width="305" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Anticipated tax recovery</font></p> </td>
        <td width="90" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(4,146,282)</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,295,208)</font></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,388,238)</font></p> </td> </tr>
    <tr>
        <td width="305" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Non-taxable portion of net capital loss (gain)</font></p> </td>
        <td width="90" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:27.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(129)</font></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(16,717)</font></p> </td> </tr>
    <tr>
        <td width="305" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Employee stock based compensation</font></p> </td>
        <td width="90" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>117,030</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>21,539</font></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>903,845</font></p> </td> </tr>
    <tr>
        <td width="305" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Cancellation of contingent payment obligation settled in common shares</font></p> </td>
        <td width="90" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>50,805</font></p> </td> </tr>
    <tr>
        <td width="305" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Change in tax rate</font></p> </td>
        <td width="90" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2,276,597</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>102,309</font></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>242,119</font></p> </td> </tr>
    <tr>
        <td width="305" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Tax return adjustment</font></p> </td>
        <td width="90" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:19.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(5,414)</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>78,995</font></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(43,509)</font></p> </td> </tr>
    <tr>
        <td width="305" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Non-deductible expenses</font></p> </td>
        <td width="90" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:17.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>10,440</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:24.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>8,113</font></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:24.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>8,976</font></p> </td> </tr>
    <tr>
        <td width="305" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Change in valuation allowance (a)</font></p> </td>
        <td width="90" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(1,747,629)</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4,084,381</font></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3,242,719</font></p> </td> </tr>
    <tr>
        <td width="305" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><font size=2>Future income tax recovery</font></p> </td>
        <td width="90" valign=top style='border-top:solid black .75pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="84" valign=top style='border-top:solid black .75pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="84" valign=top style='border-top:solid black .75pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  valign=top style='padding:10.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>As of December 31, 2006, the Company has non-capital losses for income tax purposes of approximately $46,246,000 which are available for application against future taxable income and expire in 2007 ($1,033,000), 2008 ($2,898,000), 2009 ($4,483,000), 2010 ($4,483,000), 2014 ($9,075,000), 2015 ($11,550,000) and 2016 ($12,612,000). In addition to the loss carry forward amounts above, the Company has scientific research and development claims and related investment tax credits of approximately $9,325,137 and $2,169,638 respectively as at December 31, 2006 which are available for application against future taxable income. The potential benefits resulting from these tax pools have been recognized in the financial statements only to the extent they are more likely than not of being realized. </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NOTES TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'>
<font size=2>The components of the Company&#146;s future income tax asset are as follows:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="575" style=' border-collapse:collapse'>
    <tr>
        <td width="401" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:10.0pt;margin-bottom:0pt'><b><font size=2>2006</font></b><br> <font size=2>$</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:10.0pt;margin-bottom:0pt'><b><font size=2>2005</font></b><br> <font size=2>$</font></p> </td> </tr>
    <tr>
        <td width="401" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><font size=2>Non-capital loss carryforwards</font></p> </td>
        <td width="90" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><b><font size=2>13,378,880</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><font size=2>11,483,387</font></p> </td> </tr>
    <tr>
        <td width="401" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Scientific research and development</font></p> </td>
        <td width="90" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2,704,290</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2,745,133</font></p> </td> </tr>
    <tr>
        <td width="401" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Investment tax credits</font></p> </td>
        <td width="90" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>1,540,443</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1,418,083</font></p> </td> </tr>
    <tr>
        <td width="401" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net capital loss carryforwards</font></p> </td>
        <td width="90" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>244,966</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>283,822</font></p> </td> </tr>
    <tr>
        <td width="401" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Undepreciated capital costs in excess of book value of capital assets and intellectual property</font></p> </td>
        <td width="90" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>553,156</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>325,377</font></p> </td> </tr>
    <tr>
        <td width="401" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Share issue costs</font></p> </td>
        <td width="90" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>428,965</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>772,133</font></p> </td> </tr>
    <tr>
        <td width="401" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Valuation allowance</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(18,850,700)</font></b></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(17,027,935)</font></p> </td> </tr>
    <tr>
        <td width="401" valign=top style='border-bottom: solid black 2.25pt;padding: 0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><font size=2>Future tax asset</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:10.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Para Hang" FSL="Default" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>14.</B> </FONT> </TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>&nbsp;</B> </FONT> </TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>INDEMNIFICATION</B> </FONT></TD>
</TR>
</TABLE>
<BR>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>The Company&#146;s corporate by-laws require that, except to the extent expressly prohibited by law, the Company will indemnify its officers and directors against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment reasonably incurred in respect of any civil, criminal or administrative action or proceeding as it relates to their services to the Company. The by-laws provide no limit to the amount of the indemnification. The Company has purchased directors&#146; and officers&#146; insurance coverage to cover claims made against the directors and officers during the applicable policy periods. The amounts and types of coverage have varied from period to period as dictated by market conditions. The Company believes that it has adequate insurance coverage; however there is no guarantee that all indemnification payments will be covered under the Company&#146;s
existing insurance policies. </font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>There is no pending litigation or proceeding involving any officer or director of the Company as to which indemnification is being sought, nor is the Company aware of any threatened litigation that may result in claims for indemnification. </font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Para Hang" FSL="Default" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>15.</B> </FONT> </TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>FINANCIAL
INSTRUMENTS</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>Financial instruments of the Company consist of cash and cash equivalents, short term investments, accounts receivable, investments, accounts payable, and the Alberta Heritage Foundation loan. As at December 31, 2006, there are no significant differences between the carrying values of these amounts and their estimated market values. </font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><i><b><font size=2>Credit risk</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Company is exposed to credit risk on its short-term investments in the event of non-performance by counterparties, but does not anticipate such non-performance. The Company mitigates its exposure to credit risk by restricting its portfolio to investment grade securities with short term maturities and by monitoring the credit risk and credit standing of counterparties. </font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><i><b><font size=2>Interest rate risk</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Company earns interest on its fixed rate short-term investments of 4.0% (2005 &#150; 2.9%; 2004 &#150; 2.3%) and is therefore exposed to interest rate risk from fluctuations in short-term interest rates. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NOTES TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><i><b><font size=2>Foreign exchange risk</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Company purchases goods and services denominated primarily in Canadian, U.S. and U.K. currencies. To manage its foreign exchange risk, the Company, from time to time, acquires short-term investments denominated in these securities. </font></p>


<!-- MARKER FORMAT-SHEET="Para Hang" FSL="Default" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>16.</B> </FONT> </TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>ECONOMIC
DEPENDENCE</B> </FONT></TD>
</TR>
</TABLE>
<BR>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>The Company contracts the production and currently receives its supplies of REOLYSIN<sup>&reg;</sup> from one toll manufacturer based in the United Kingdom. There are a limited number of potential producers and suppliers of REOLYSIN<sup>&reg;</sup>. As a result, any significant disruption of the services provided by this toll manufacturer has the potential to delay the progress of the Company&#146;s clinical trial program. Management is aware of and is taking actions to minimize this exposure.</font></p>


<!-- MARKER FORMAT-SHEET="Para Hang" FSL="Default" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>17.</B> </FONT> </TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>ADDITIONAL
CASH FLOW DISCLOSURE </B> </FONT></TD>
</TR>
</TABLE>
<BR>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Net Change In Non-Cash Working Capital</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="625" style=' border-collapse:collapse'>
    <tr>
        <td width="271" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <br> <br> <br> <br> <b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <br> <br> <br> <br> <b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <br> <br> <br> <br> <b><font size=2>2004</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="102" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Cumulative from inception on April 2,</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>1998 to December 31, 2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td> </tr>
    <tr>
        <td width="271" valign=top style='border-top:solid black .50pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><font size=2>Change in:</font></i><i></i></p> </td>
        <td width="84" valign=top style='border-top:solid black .50pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>&nbsp;<i></i></p> </td>
        <td width="78" valign=top style='border-top:solid black .50pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>&nbsp;<i></i></p> </td>
        <td width="90" valign=top style='border-top:solid black .50pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>&nbsp;<i></i></p> </td>
        <td width="102" valign=bottom style='border-top:solid black .50pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="271" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Accounts receivable</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:23.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(36,613)</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:39.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>377</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:30.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>16,457</font></p> </td>
        <td width="102" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:27.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(84,003)</font></p> </td> </tr>
    <tr>
        <td width="271" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Prepaid expenses</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:23.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(98,172)</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(290,003)</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:27.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(93,528)</font></p> </td>
        <td width="102" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:22.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(638,540)</font></p> </td> </tr>
    <tr>
        <td width="271" valign=top style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Accounts payable and accrued liabilities</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:24.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>923,940</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:21.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>743,223</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:30.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>64,330</font></p> </td>
        <td width="102" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2,616,421</font></p> </td> </tr>
    <tr>
        <td width="271" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Change in non-cash working capital</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:24.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>789,155</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:21.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>453,597</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:27.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(12,741)</font></p> </td>
        <td width="102" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1,893,878</font></p> </td> </tr>
    <tr>
        <td width="271" valign=top style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net change associated with investing activities </font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:29.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>22,767</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:21.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>131,169</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:27.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(56,324)</font></p> </td>
        <td width="102" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:30.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>11,043</font></p> </td> </tr>
    <tr>
        <td width="271" valign=top style='border-bottom: solid black 2.25pt;padding: 0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net change associated with operating activities</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:24.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>811,922</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:21.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>584,766</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:27.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(69,065)</font></p> </td>
        <td width="102" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1,904,921</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="623" style=' margin-left:0pt;border-collapse:collapse'>
    <tr>
        <td width="270" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Other Non-Cash Items</font></b></p>
<p style='margin-left:.25in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p>
<p style='margin-left:.25in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:.25in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p>
<p style='margin-left:.25in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:.25in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="97" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Cumulative from inception on April 2,</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>1998 to December 31, 2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:.25in;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Foreign exchange loss</font></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>159,204</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>264,080</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>425,186</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:.25in;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Donation of medical equipment </font><i><font size=2>[note 4]</font></i><i></i></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>66,069</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>66,069</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:.25in;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Loss on sale of Transition Therapeutics Inc.</font></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2,156,685</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:.25in;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Gain on sale of BCY LifeSciences Inc.</font><i></i></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:27.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(765)</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(34,185)</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:10.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(299,403)</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:.25in;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Cancellation of contingent payment obligation settled in common shares </font><i><font size=2>[note 8]</font></i><i></i></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="82" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="92" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>150,000</font></p> </td>
        <td width="97" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>150,000</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:.25in;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Future income tax recovery</font></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="97" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,115,000)</font></p> </td> </tr>
    <tr>
        <td width="270" valign=bottom style='border-bottom: solid black 2.25pt;padding: 0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:.25in;text-indent:-9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="82" valign=bottom style='border-bottom:solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>224,508</font></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black 2.25pt;padding: 0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>379,895</font></p> </td>
        <td width="97" valign=bottom style='border-bottom: solid black 2.25pt;padding: 0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1,383,537</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.25in; text-indent:-0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NOTES TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Para Hang" FSL="Default" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>18.</B> </FONT> </TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>BCY
LIFESCIENCES INC. </B> </FONT></TD>
</TR>
</TABLE>
<BR>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>On May 7, 2002, the shareholders of SYNSORB and the Company approved an arrangement whereby the Company would release from escrow 4,000,000 common shares held by SYNSORB. As consideration, SYNSORB provided the Company with 1,500,000 common shares of BCY LifeSciences Inc. (&#147;BCY&#148;) along with the rights to receive an additional 400,000 common shares of BCY upon the attainment of certain milestones by BCY at no cash cost to the Company. The Company received 200,000 of these 400,000 common shares on November 27, 2002. These 1,700,000 common shares in BCY were recorded as an investment at $170,000 based on the quoted market price of the BCY common shares at that time with an offsetting credit recorded to contributed surplus. On April 23, 2002, the Company acquired 694,445 common shares of BCY, a public company, for $0.18 per share, and warrants exercisable until April 23, 2004 to purchase up to 694,445
common shares in BCY at an exercise price of $0.27 per share for total consideration of $127,123 (including costs of $2,123). After these transactions, the Company held a total of 2,394,445 BCY shares. </font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>During 2005, the Company sold 120,000 (2004 &#150; 697,945; 2003 &#150; 1,496,500) of its BCY shares for net cash proceeds of $7,965 (2004 &#150; $133,609; 2003 &#150; $450,151) recording a gain on sale of investment of $765 (2004 &#150; $34,185; 2003 &#150; $264,453). As at December 31, 2006, the Company&#146;s remaining ownership in BCY was 80,000 common shares with a book value $4,800 and has been classified as a short term investment. The warrants expired out of the money. </font></p>


<!-- MARKER FORMAT-SHEET="Para Hang" FSL="Default" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>19.</B> </FONT> </TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>RECONCILIATION
OF CANADIAN GAAP TO U.S. GAAP</B> </FONT></TD>
</TR>
</TABLE>
<BR>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>The financial statements of the Company are prepared in accordance with Canadian GAAP which, in most respects, conforms to U.S. GAAP. Significant differences between Canadian and U.S. GAAP are as follows:</font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="594" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:.75in'>
        <td width="192" valign=bottom style='padding:0in 3.95pt 0in 3.95pt; height:.75in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="40" valign=bottom style='padding:0in 3.95pt 0in 3.95pt; height:.75in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style='padding:0in 3.95pt 0in 3.95pt; height:.75in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><b><font size=2>Year Ended December 31</font></b></p> </td>
        <td width="132" rowspan=2 valign=top style=' border-bottom:solid black .75pt;padding:0in 3.95pt 0in 3.95pt; height:.75in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Cumulative from inception on April 2, 1998 to December 31, 2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td> </tr>
    <tr style='height:22.5pt'>
        <td width="192" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt;height:22.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="40" valign=bottom style='border-bottom: solid black .75pt;padding:0in 3.95pt 0in 3.95pt;height:22.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <b><font size=2>Notes</font></b></p> </td>
        <td width="74" valign=bottom style='border-bottom: solid black .75pt;padding:0in 3.95pt 0in 3.95pt;height:22.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b><br> <font size=2>$</font></p> </td>
        <td width="78" valign=bottom style='border-bottom: solid black .75pt;padding:0in 3.95pt 0in 3.95pt;height:22.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2005</font></b><br> <font size=2>$</font></p> </td>
        <td width="78" valign=bottom style='border-bottom: solid black .75pt;padding:0in 3.95pt 0in 3.95pt;height:22.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><br> <font size=2>$</font></p> </td> </tr>
    <tr>
        <td width="192" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.55pt;text-indent:-9.55pt;text-align:left;margin-top:8.0pt;margin-bottom: 0in'><font size=2>Net loss - Canadian GAAP</font></p> </td>
        <td width="40" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>(2)</font></p> </td>
        <td width="74" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><b><font size=2>14,297,524</font></b></p> </td>
        <td width="78" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>12,781,831</font></p> </td>
        <td width="78" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>12,956,119</font></p> </td>
        <td width="132" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>65,030,066</font></p> </td> </tr>
    <tr style='height:28.35pt'>
        <td width="192" valign=bottom style='padding:0in 3.95pt 0in 3.95pt; height:28.35pt'>
            <p style='margin-left:9.55pt;text-indent:-9.55pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Amortization of intellectual property</font></p> </td>
        <td width="40" valign=bottom style='padding:0in 3.95pt 0in 3.95pt; height:28.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p> </td>
        <td width="74" valign=bottom style='padding:0in 3.95pt 0in 3.95pt; height:28.35pt'>
            <p style='margin-left:0pt;text-indent:4.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(361,500)</font></b></p> </td>
        <td width="78" valign=bottom style='padding:0in 3.95pt 0in 3.95pt; height:28.35pt'>
            <p style='margin-left:0pt;text-indent:6.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(361,500)</font></p> </td>
        <td width="78" valign=bottom style='padding:0in 3.95pt 0in 3.95pt; height:28.35pt'>
            <p style='margin-left:0pt;text-indent:6.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(361,500)</font></p> </td>
        <td width="132" valign=bottom style='padding:0in 3.95pt 0in 3.95pt; height:28.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>(2,711,250)</font></p> </td> </tr>
    <tr>
        <td width="192" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.55pt;text-indent:-9.55pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Future income tax recovery</font></p> </td>
        <td width="40" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p> </td>
        <td width="74" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:31.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:31.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:31.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="132" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,115,000</font></p> </td> </tr>
    <tr>
        <td width="192" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.55pt;text-indent:-9.55pt;text-align:left;margin-top:8.0pt;margin-bottom: 0in'><font size=2>Net and comprehensive loss &#150; U.S. GAAP</font></p> </td>
        <td width="40" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><b><font size=2>13,936,024</font></b></p> </td>
        <td width="78" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>12,420,331</font></p> </td>
        <td width="78" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>12,594,619</font></p> </td>
        <td width="132" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>63,433,816</font></p> </td> </tr>
    <tr>
        <td width="192" valign=bottom style='border-top:solid black 2.25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.55pt;text-indent:-9.0pt;text-align:left;margin-top:8.0pt;margin-bottom: 0in'><font size=2>Basic and diluted loss per common share &#150; U.S. GAAP</font></p> </td>
        <td width="40" valign=bottom style='border-top:solid black 2.25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=bottom style='border-top:solid black 2.25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:23.25pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><b><font size=2>(0.38)</font></b></p> </td>
        <td width="78" valign=bottom style='border-top:solid black 2.25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:27.0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>(0.38)</font></p> </td>
        <td width="78" valign=bottom style='border-top:solid black 2.25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:27.0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>(0.43)</font></p> </td>
        <td width="132" valign=top style='border-top:solid black 2.25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:27.75pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:31.5pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td width="192" valign=bottom style='border-bottom: solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:9.55pt;text-indent:-9.0pt;text-align:left;margin-top:8.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="40" valign=bottom style='border-bottom: solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=bottom style='border-bottom: solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=bottom style='border-bottom: solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=bottom style='border-bottom: solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="132" valign=top style='border-bottom:solid black 2.25pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>There are no differences between Canadian GAAP and U.S. GAAP in amounts reported as cash flows from (used in) operating, financing and investing activities.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NOTES TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>



<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>Balance sheet items in accordance with U.S. GAAP are as follows:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="540" style=' margin-left:0pt;border-collapse:collapse'>
    <tr>
        <td width="204" valign=top style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:12.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>December 31, 2006</font></b></p> </td>
        <td  colspan="2" valign=top style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>December 31, 2005</font></b></p> </td> </tr>
    <tr>
        <td width="204" valign=top style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <b><font size=2>Notes</font></b></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Canadian GAAP</font></b></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>U.S.</font></B><br> <B><font SIZE=2>GAAP</font></B></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Canadian GAAP</font></b></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>U.S.</font></B><br> <B><font SIZE=2>GAAP</font></B></p> </td> </tr>
    <tr>
        <td width="204" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>Intellectual property</font></p> </td>
        <td width="48" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:12.0pt;margin-bottom:0pt'><font size=2>(1)</font></p> </td>
        <td width="72" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>5,079,805</font></b></p> </td>
        <td width="72" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><b><font size=2>4,176,055</font></b></p> </td>
        <td width="72" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>5,110,538</font></p> </td>
        <td width="72" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:12.0pt;margin-bottom:0pt'><font size=2>3,845,288</font></p> </td> </tr>
    <tr>
        <td width="204" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Future income taxes</font></p> </td>
        <td width="48" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p> </td>
        <td width="72" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="72" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="72" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="72" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="204" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Contributed surplus</font></p> </td>
        <td width="48" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p> </td>
        <td width="72" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>6,816,793</font></b></p> </td>
        <td width="72" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>4,316,793</font></b></p> </td>
        <td width="72" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6,413,243</font></p> </td>
        <td width="72" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3,913,243</font></p> </td> </tr>
    <tr>
        <td width="204" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Deficit</font></p> </td>
        <td width="48" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p> </td>
        <td width="72" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>65,030,066</font></b></p> </td>
        <td width="72" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>63,433,816</font></b></p> </td>
        <td width="72" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>50,732,542</font></p> </td>
        <td width="72" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>49,497,792</font></p> </td> </tr>
    <tr>
        <td width="204" valign=top style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>1.</font></b></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><b><font size=2>&#147;Push-Down&#148; Accounting and In Process Research and Development</font></b></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.25in;text-align:justify;'><font size=2>In process research and development of $2,500,000 recorded as a consequence of SYNSORB&#146;s acquisition of the Company&#146;s shares comprises intangible assets related to research and development activities. Under U.S. GAAP, this would not be capitalized on acquisition.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.25in;text-align:justify;'><font size=2>As a result of removing the $2,500,000 from intellectual property in 1999 for U.S. GAAP purposes, the amortization of the intellectual property, the future income tax recovery, future income tax liability and contributed surplus amounts recorded for Canadian GAAP purposes have been reversed.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2.</font></b></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Presentation of Stock Based Compensation Expense</font></b></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.25in;text-align:justify;'><font size=2>Under U.S. GAAP, stock based compensation expense is to be presented within the appropriate category of expenses on the statement of loss. As a result, stock based compensation on the statement of loss would be reduced by $403,550 in 2006 (2005 - $64,104 and 2004 &#150; $2,668,570) and research and development and operating expenses would increase by $131,890 and $271,660, respectively (2005 &#150; $59,974 and $4,130, respectively; and 2004 &#150; $1,460,470 and $1,208,100, respectively). Cumulative from inception stock based compensation would be reduced by $4,165,649 and cumulative from inception research and development and operating expenses would increase by $2,295,929 and $1,869,720, respectively. There is no impact on the Company&#146;s net loss.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Stock Based Employee Compensation</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>On January 1, 2003, the Company prospectively adopted the fair value based method for its employee options (see note 3). Consequently there were no differences between Canadian GAAP and U.S. GAAP with respect to options granted subsequent to this date. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>In 2002, the Company applied the intrinsic value method for employee stock options and the fair value method for non-employee options granted after January 1, 2002. Prior to January 1, 2002, for U.S. GAAP, the Company applied the intrinsic value method prescribed by Accounting Principles Board Opinion No. 25, &#147;Accounting for Stock Issued to Employees&#148; and related interpretations in accounting for its employee stock option plans. As well, the Company provided pro forma disclosure as required by FAS 123 for those options granted prior to January 1, 2002.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NOTES TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>The following additional pro-forma disclosure would be provided under U.S. GAAP with respect to the fair value of employee options granted prior to January 1, 2002. The fair value for these options granted was estimated at the date of grant using a Black-Scholes Option Pricing Model with the following weighted-average assumptions:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="400" style=' margin-left:0pt;border-collapse:collapse'>
    <tr>
        <td width="330" valign=top style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="70" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>2001</font></b></p> </td> </tr>
    <tr>
        <td width="330" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Risk free interest rate</font></p> </td>
        <td width="70" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>5.0%</font></p> </td> </tr>
    <tr>
        <td width="330" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Dividend yield</font></p> </td>
        <td width="70" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="330" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Volatility factors of expected market price</font></p> </td>
        <td width="70" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>87%</font></p> </td> </tr>
    <tr>
        <td width="330" valign=top style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted average expected life of the options</font></p> </td>
        <td width="70" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2 years</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>Pro forma disclosures of loss and loss per common share are presented below as if the Company had adopted the cost recognition requirements under FAS 123 from inception. </font></p>


<table border="0" cellspacing=0 cellpadding=0 width="549" style=' margin-left:0pt;border-collapse:collapse'>
    <tr>
        <td width="162" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="144" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>2006</font></b><br> <font size=2>$</font></p> </td>
        <td width="81" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>2005</font></b><br> <font size=2>$</font></p> </td>
        <td width="81" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><br> <font size=2>$</font></p> </td> </tr>
    <tr>
        <td width="162" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Net Loss</font></p> </td>
        <td width="144" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Pro forma  &#150; Canadian GAAP</font></p> </td>
        <td width="81" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>14,297,524</font></b></p> </td>
        <td width="81" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12,782,814</font></p> </td>
        <td width="81" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12,960,544</font></p> </td> </tr>
    <tr>
        <td width="162" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="144" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>As reported &#150; U.S. GAAP</font></p> </td>
        <td width="81" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>13,936,024</font></b></p> </td>
        <td width="81" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12,420,331</font></p> </td>
        <td width="81" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:45.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12,594,619</font></p> </td> </tr>
    <tr>
        <td width="162" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="144" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Pro forma &#150; U.S. GAAP</font></p> </td>
        <td width="81" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>13,936,024</font></b></p> </td>
        <td width="81" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12,421,314</font></p> </td>
        <td width="81" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12,599,044</font></p> </td> </tr>
    <tr>
        <td width="162" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Basic and diluted net loss per common share</font></p> </td>
        <td width="144" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><br> <font size=2>Pro forma &#150; Canadian GAAP ($/share)</font></p> </td>
        <td width="81" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:32.25pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:32.25pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:24.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(0.39)</font></b></p> </td>
        <td width="81" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:32.25pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:32.25pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:24.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(0.39)</font></p> </td>
        <td width="81" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:32.25pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:32.25pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:24.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(0.45)</font></p> </td> </tr>
    <tr>
        <td width="162" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="144" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>As reported &#150; U.S. GAAP</font></p> </td>
        <td width="81" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:24.0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><b><font size=2>(0.38)</font></b></p> </td>
        <td width="81" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:24.75pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>(0.38)</font></p> </td>
        <td width="81" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:24.75pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>(0.43)</font></p> </td> </tr>
    <tr>
        <td width="162" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="144" valign=bottom style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Pro forma &#150; U.S. GAAP ($/share)</font></p> </td>
        <td width="81" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:32.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:24.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(0.38)</font></b></p> </td>
        <td width="81" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:32.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:24.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(0.38)</font></p> </td>
        <td width="81" valign=top style='padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:32.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:24.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(0.43)</font></p> </td> </tr>
    <tr>
        <td width="162" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="144" valign=bottom style='border-bottom: solid black .5pt;padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='border-bottom:solid black .5pt; padding:0in 3.95pt 0in 3.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Additional Stock Based Payment Disclosure</font></b></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>As at December 31, 2006, the aggregate intrinsic value of the stock options outstanding and the stock options exercisable were $699,993 and $689,193, respectively. The total intrinsic value of the options exercised in 2006 was $618,960 (2005 &#150; $1,223,400; 2004 &#150; $1,253,014).</font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>A summary of the Company&#146;s non-vested shares as of December 31, 2006 and changes during the year ended December 31, 2006 is as follows:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="533" style=' border-collapse:collapse'>
    <tr style='height:16.65pt'>
        <td width="347" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:8.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style=' border-bottom:solid black .75pt;padding:0in 4.0pt 0in 4.0pt;height:16.65pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td> </tr>
    <tr>
        <td width="347" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .75pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><br> <br> <b><font size=2>Stock Options</font></b></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .75pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>Weighted Average Grant Date Fair Value</font></b><br> <b><font size=2>$</font></b></p> </td> </tr>
    <tr>
        <td width="347" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>Non-vested at beginning of year</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:8.25pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><b><font size=2>247,500</font></b></p> </td>
        <td width="108" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:22.5pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><b><font size=2>1.36</font></b></p> </td> </tr>
    <tr>
        <td width="347" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=2>Granted during year</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:8.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>187,400</font></b></p> </td>
        <td width="108" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:22.5pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>1.46</font></b></p> </td> </tr>
    <tr>
        <td width="347" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=2>Vested during year</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:4.5pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>(252,400)</font></b></p> </td>
        <td width="108" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:22.5pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>1.42</font></b></p> </td> </tr>
    <tr>
        <td width="347" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=2>Forfeited during year</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .75pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:31.5pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="108" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:31.5pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><b><font size=2>&#151;</font></b></p> </td> </tr></table>
<table border="0" cellspacing=0 cellpadding=0 width="533" style=' border-collapse:collapse'>
    <tr>
        <td width="347" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:8.0pt;margin-bottom:0in'><font size=2>Non-vested at end of year</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .75pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:8.25pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><b><font size=2>182,500</font></b></p> </td>
        <td width="108" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:22.5pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><b><font size=2>1.38</font></b></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=3>Oncolytics Biotech Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>NOTES TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>



<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>As of December 31, 2006, there was $159,877 of total unrecognized compensation costs related to non-vested stock options granted under the Company&#146;s stock option plan. This cost is expected to be recognized over a weighted average period of 1.75 years. The total fair value of shares vested during the years ended December 31, 2006, 2005, and 2004 was $129,276, $59,630, and $8,250, respectively. </font></p>

<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>The Company issues shares from treasury to satisfy any exercises of stock options. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Future Changes in U.S. Accounting Policies</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>On July 13, 2006, FASB issued Interpretation No. 48, </font><i><font size=2>Accounting for Uncertainty in Income Taxes&#151;an interpretation of FASB Statement No. 109. </font></i><font size=2>Interpretation 48 clarifies the accounting for uncertainty in income taxes recognized in an entity&#146;s financial statements in accordance with Statement 109 and prescribes a recognition threshold and measurement attribute for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Additionally, Interpretation 48 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Interpretation 48 is effective for fiscal years beginning after December 15, 2006, with early adoption permitted. The Company does not expect that the adoption of Interpretation 48 will have a material effect on its financial position,
results of operations or cash flows.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In 2006, FASB issued Statement No. 157, </font><i><font size=2>Fair Value Measurements</font></i><font size=2>. This new pronouncement provides guidance for using fair value to measure assets and liabilities. FASB believes the pronouncement also responds to investors&#146; requests for expanded information about the extent to which corporations measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. Statement 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. &nbsp;Statement 157 requires expanded disclosure of the effect on earnings for items measured using unobservable data. The Company does not believe adoption of Statement 157 will have a material effect on its financial position, results of
operations or cash flows.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>20.</font></b></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>COMPARATIVE FIGURES </font></B></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>Certain comparative figures have been reclassified to conform with the current period&#146;s presentation.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>21.</font></b></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>SUBSEQUENT EVENT</font></B></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:10pt;text-align:justify;'><font size=2>On February 22, 2007, the Company closed a public offering whereby 4,000,000 units were issued at a price of $3.00 per unit for gross cash proceeds of $12,000,000. Net proceeds are expected to be approximately $10,590,000. Each unit included one common share and one-half of one common share purchase warrant for a total of 2,000,000 warrants. Each whole common share purchase warrant entitles the holder to acquire one common share in the capital of the Company upon payment of $3.50 per share until February 22, 2010. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>



</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>8
<FILENAME>img1.jpg
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 img1.jpg
M_]C_X``02D9)1@`!`0$`8`!@``#__@`<4V]F='=A<F4Z($UI8W)O<V]F="!/
M9F9I8V7_VP!#``H'!P@'!@H("`@+"@H+#A@0#@T-#AT5%A$8(Q\E)"(?(B$F
M*S<O)BDT*2$B,$$Q-#D[/CX^)2Y$24,\2#<]/CO_P``+"``H`-8!`1$`_\0`
M&P`!``,!`0$!``````````````0%!@<#`@'_Q``V$``!!`$#`@4"!`4#!0``
M```!`@,$!1$`!B$2,0<305%A%($B,D)Q%2,SD:$64\%#4F*"T?_=``0`*/_:
M``@!`0``/P#LJE!*2I1``&22>!KEUYO>7;[S>H(+\Y%1&0/,DTC7U#SZR`>G
MK3GRP,D$CG\)YYXOMJ4U&+;ZZ+MNXA2F6SB;9*5ES/!'+A)//J!K::::::A7
M%O!HJM^RL7@S&83E2CR3[`#U)/`&O:%*$Z"Q+2TZRE]M+@;=3TK2",X(]#\:
M]]--9.Z\1JFBERHTN#:J5%_.MN&HH/&<A1P,?/;5EM3</^J*5-JF`]"9=<4&
M4O$=3B!V7QVSS_;5/)W%9W6]TT%`M+42M4ERTF%`5DY_HISQD^I[CGVYV6FF
MFFFFOAMYI[J\IQ#G0HI5TJ!Z5#N#\Z>8V'0UUI\PCJ",\D>^-1K"WK*E*%65
MC$A!S(09#Z6^K'?'41G2!;UEJ%&NL8DP(_,8[Z7,?O@G7*%W8OM\6U5N*--L
MI,>46JZE97Y;"TC/XUDD`\`'))[\`]AN8D7>##"6X<7;E6PG\D9"'7.@>V4]
M`S^PU%1O6;4;FCT6Y&(*%2FU+;E07RI"`.3YB5`%`^<D?YQ1;TW]=2*298;2
M"6JN"I(>LW$_UE%83TL@C"@">5?V^=1,WLW_`"8-57NS[EYI+A@)4!]-D9_G
M+[(QG]_;6:B^+,QVHL0FC5.M*Y;H?$,DQDMI_P"H7#Z=\`9)QZ:^K/Q@BMT<
M!ZO:2N5+#:'Y"VUF+"6H`D*4!E1'/X1SP=>C&]7)^SW),S<\>LD-3'&$2HL=
M+JIJ$G"5-M*R><X['MK+T%/N'Q`W++@;AM[9NNJRA]*'4):=*E<MY2!A)Z<G
MUQ]]=BK:T5R%)^NF2R<95)>ZR/\`YK(;PWQN;:UDZI&TU3:EM(5]6VZ3D8R2
MK"3T8Y[C439&YMQ[NNG[T5*VJUP".R%S<,LI!RL](&5N$XYP`!QG72-?_]#5
M>+-B(U%`@/N.1X-C.;9G2$I)\MC.5=O4_P#!U4[J\3T5FW6V]H5SSL<XC,SE
MLJ0RV<82EL*`*U8'[#COVU2[8W':1Z>5%HPS3Q:E)>M9UHCK>D23G*>C/!)2
M1C.<`>O!T$GQ0O(E#`+VTIC-I-4AAM<A'EQE.J[8YZN>^./W]=6E[XD1:^?$
MHJOR+.\DNH94VVLAEI1(!*E?\=_?4R]WQ](W+;H*YRZDPTJ5(+2@AA@)&2%.
M'CJQ^D9/[:H'/%[SH%?80*-]<-U]MF9)?5T-L*4>4I/ZB.>>`./?5SN#Q*IZ
ML*C52DW-B4E26(JP4(`_4XOLE(]=5OAIO#<^[K"Q=LF(2:V.>A*V$G^ID?A2
M<D*&.2?D>^MAN6Y:V]MR=;.XQ%9*D@_J5V2/NH@??5%X7LQ8NQX)1,9D2)A5
M)D+2X%%3JCE0/R!@']M1-N3F+SQ,W#9F2T45C**^.CK&0`>IQ6/;J&,ZB>,<
MA2:6!'AUB),Z?($>/*"$%;62#TH)Y!5C&1\\]M>,?PXEW]H;6U8;VZV&/):B
M5C@\TC.>IUQ(`4?V^/;F?MK8,.55R!NRE:D6JI;BW9BE94_DY2I"DGJ"<8&.
M,8[:O$[$HDIZ`+#R_P#;_B<GI_MYFO;_`$7MGZ%<+^"0RPXH+6"WDK([%2NY
M^YU)M-NU5O1JI9<1/T!"0&6B6PD)((QTXQC`TJ]N4]+6+KJV`W&C.`A:49RO
M(P2I7<GY)U[5=/74D%,&LAM18Z?T-IQD^Y]2?DZ^)]%56E4JJF0&782L?R>G
MI2,=L8QC[:C5.T-NT2TN5E-$CN)&`Z&^I8_]CD_YU&F;+ARKJ3:LV-G!=F)0
M)*(DGRT/=(P">,@XXR"-7%?71*N((L)A++0).`222>Y)/))]SSJ'N>A1N;;\
MFH<E.Q420D*<:QU8"@<<^AQC7WMV@A;8I(]3`"_(8!PIPY4HDY))]\G5GK.;
MDW,8$EJFK(/\4N)2>IN+G"&T?[CJOTI_R>PUD=L4EA:^)LR;>6@M%4K20`A'
M2RS(7STMC/9*?7`.2/;6W7L_;SEX;M=3'58$@EX@GD=E=/;J^<9UZ;BVQ4[J
MA-P[>.7FFW`XCI64E*AQW'P3J#.\/=K3ZJ/5N5+;<6.YYC:626R%=CE0Y.?7
M)U8N[?KE[>=H66?I8+C)9*(_X"$D8.#[G_.OUO;U.W2M4QKH[E>RD)1'=;"T
M\=B0>Y]<ZYSO>'LG;TUUR!M)FRMF6/.<CLA08CM@?G=2G\('QCGX[ZG[&V#(
M3MJ([87T]#,Q(E&#"<^G;27`#@E'XCQCL0-:J5LC;TRJ-6Y``BJ=0ZXE+B@I
MU2>W6K.5?<G7W`V7MJKL18P:6)'E`DI<0C!3D8/2.PX/IJN'A=LL(2E5(VLI
M65]2G7"HDGG)ZLD?!U;3=LULYVI6MM3:*AP.16FB$H20,`$8[`=M?__1[-II
MIIIIIIIIIIJMW%<(H-O3K9Q/6(K*EA/_`'*]!]S@:S=*$[3V)+W-9*\^REL?
M73'E]UK*<H;'LD9"0.VIOAS5.UFT(SLO\4VQ4J;*61RI;GXN?G&!]M:G3335
M=N&V11;?GVJP"(K"G`D_J4!P/N<#[ZPDNK>8V=%VXE0=O]T+#DYX\J2#A3JU
M?^*4_A`^1C72&66X[#;#2>EMM(0D>P`P->FFFFFFFFFFFFFFFFFO_]+J.Z*4
M;BVU/J/,\HRFBE*_1*NX)^,@:YK/MIM]14WA_/AR8MJY):CSTK;.%1VN2XE7
M8@](/V/QKKR4A"0E(`2!@`>FOW3334&ZJ(M]32JJ9U>1*;*%E!PH>Q'R#@ZK
F]N;4C;?*WU2I%A-<0EI4N4H*6&T_E0G'`2/;U/)U?::::::__]D_
`
end
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3
<SEQUENCE>9
<FILENAME>ex_3.htm
<DESCRIPTION>MD&A
<TEXT>
<HTML>
<HEAD>
<TITLE> </TITLE>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>

<!-- MARKER FORMAT-SHEET="Para Right" FSL="Default" -->
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>EXHIBIT 3</B> </FONT> </P>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>March 2, 2007</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The following information should be read in conjunction with our 2006 audited financial statements and notes thereto, which were prepared in accordance with Canadian generally accepted accounting principles (&#147;GAAP&#148;). </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>FORWARD-LOOKING STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>The following discussion contains forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements, including our belief as to the potential of REOLYSIN<sup>&reg;</sup> as a cancer therapeutic and our expectations as to the success of our research and development and manufacturing programs in 2007 and beyond, future financial position, business strategy and plans for future operations, and statements that are not historical facts, involve known and unknown risks and uncertainties, which could cause our actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, among others, the need for and availability of funds and resources to pursue research and development projects, the efficacy of REOLYSIN<sup>&reg; </sup>as a cancer treatment, the success and timely completion of
clinical studies and trials, our ability to successfully commercialize REOLYSIN<sup>&reg;</sup>, uncertainties related to the research, development and manufacturing of pharmaceuticals, uncertainties related to competition, changes in technology, the regulatory process and general changes to the economic environment. Investors should consult our quarterly and annual filings with the Canadian and U.S. securities commissions for additional information on risks and uncertainties relating to the forward-looking statements. Forward-looking statements are based on assumptions, projections, estimates and expectations of management at the time such forward looking statements are made, and such assumptions, projections, estimates and/or expectations could change or prove to be incorrect or inaccurate. Investors are cautioned against placing undue reliance on forward-looking statements. We do not undertake to update these forward-looking statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>OVERVIEW</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Oncolytics Biotech Inc. is a Development Stage Company</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Since our inception in April of 1998, Oncolytics Biotech Inc. has been a development stage company and we have focused our research and development efforts on the development of REOLYSIN<sup>&reg;</sup>, our potential cancer therapeutic. We have not been profitable since our inception and expect to continue to incur substantial losses as we continue research and development efforts. We do not expect to generate significant revenues until, if and when, our cancer product becomes commercially viable. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><i><b><font size=2>General Risk Factors</font></b></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Prospects for biotechnology companies in the research and development stage should generally be regarded as speculative. It is not possible to predict, based upon studies in animals, or early studies in humans, whether a new therapeutic will ultimately prove to be safe and effective in humans, or whether necessary and sufficient data can be developed through the clinical trial process to support a successful product application and approval. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>If a product is approved for sale, product manufacturing at a commercial scale and significant sales to end users at a commercially reasonable price may not be successful. There can be no assurance that we will generate adequate funds to continue development, or will ever achieve significant revenues or profitable operations. Many factors (e.g. competition, patent protection, appropriate regulatory approvals) can influence the revenue and product profitability potential.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>In developing a pharmaceutical product, we rely upon our employees, contractors, consultants and collaborators and other third party relationships, including the ability to obtain appropriate product liability insurance. There can be no assurance that these reliances and relationships will continue as required.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In addition to developmental and operational considerations, market prices for securities of biotechnology companies generally are volatile, and may or may not move in a manner consistent with the progress being made by Oncolytics.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=3>REOLYSIN<sup>&reg;</sup> Development Update For 2006</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We have been developing our product REOLYSIN<sup>&reg;</sup> as a possible cancer therapy since our inception in 1998. Our goal each year is to advance REOLYSIN<sup>&reg;</sup> through the various steps and stages of development required for potential pharmaceutical products. In order to achieve this goal, we believe that we have to actively manage the development of our clinical trial program, our pre-clinical and collaborative programs, our manufacturing process and REOLYSIN<sup>&reg; </sup>supply, and our intellectual property.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Clinical Trial Program</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>U.K. Phase I Systemic Administration Clinical Trial</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>During 2006, we completed patient enrollment in our U.K. phase I systemic delivery clinical trial. The primary objective of our U.K. Phase I trial was to determine the maximum tolerated dose (&#147;MTD&#148;), dose limiting toxicity (&#147;DLT&#148;), and safety profile of REOLYSIN<sup>&reg;</sup> when administered systemically to patients. A secondary objective was to examine any evidence of anti-tumour activity. Eligible patients included those who had been diagnosed with advanced or metastatic solid tumours that were refractory (have not responded) to standard therapy or for which no curative standard therapy exists.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>A total of 33 patients were treated in this clinical trial to a maximum daily dose of 1x10<sup>11</sup> TCID<sub>50</sub>. These 33 patients have received 77 courses of therapy, for a total of 338 daily treatments. Patients were entered into the study at the following dose levels (all TCID<sub>50</sub>): 1x10<sup>8</sup> for 1 day, 1x10<sup>8</sup> for 3 days, 1x10<sup>8</sup>, 3x10<sup>8</sup>, 1x10<sup>9</sup>, 3x10<sup>9</sup>, 1x10<sup>10</sup> and 3x10<sup>10</sup> for five days, and 1x10<sup>11</sup> for three days. An MTD was not reached and the treatment appears to have been well tolerated by the patients. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Toxicities possibly related to REOLYSIN<sup>&reg;</sup> treatment in this trial were generally mild (grade 1 or 2) and included chills, fever, headache, cough, runny nose, sore throat and fatigue. Transient grade 3 toxicities included lymphopenia, neutropenia and troponin I. These symptoms were more frequently observed from day two of treatment and usually lasted less than six hours.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Of the patients assessed to date (32), anti-tumour activity was noted in seven patients. Patients were assessed with CTR scans, and where possible tumour marker assessment, and histopathology of tumour biopsies. 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 (reduction from 2.5 to 1.9 cm). A patient with pancreatic cancer and a patient with lung cancer had stable disease
for four months. A patient with endometrial cancer had stable disease for five months.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><i><b><font size=2>Phase Ia/Ib Combination REOLYSIN<sup>&reg;</sup>/Radiation Clinical Trial</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
In  2006,  we  completed   patient   enrollment  in  our  Phase  Ia  combination
REOLYSIN<sup>&reg;</sup>/radiation clinical trial. The primary objective of this
trial   was   to   determine   the   MTD,    DLT,   and   safety    profile   of
REOLYSIN<sup>&reg;</sup> when administered intratumourally to patients receiving
radiation  treatment.  A  secondary  objective  was to examine  any  evidence of
anti-tumour  activity.  Eligible  patients included those who had been diagnosed
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>with advanced or metastatic solid tumours that were refractory to standard therapy or for which no curative standard therapy exists.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>A total of 11 patients were treated in this Phase Ia trial with two intratumoural treatments of REOLYSIN<sup>&reg;</sup> at dosages of 1x10<sup>8</sup>, 1x10<sup>9</sup>, or 1x10<sup>10</sup> TCID<sub>50</sub> with a constant localized radiation dose of 20 Gy in five fractions. Preliminary results in the first seven patients showed that the combination of intratumoural REOLYSIN<sup>&reg;</sup> and radiation was well-tolerated and an MTD had not been reached. Most toxicities were mild, generally grade 1 and 2, and included fever, sweating and skin erythema. One patient in the second cohort developed grade 3 fatigue and grade 2 flu-like symptoms and could not receive the second REOLYSIN<sup>&reg;</sup> injection. There was no evidence that the REOLYSIN<sup>&reg;</sup> injections exacerbated the acute reactions expected from the radiation. There was also no evidence of viral shedding in the blood, urine, stool
or sputum on day eight post-REOLYSIN<sup>&reg;</sup> injection. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Interim analysis also showed evidence of local responses and an indication of systemic effects. Amongst the first five patients that completed treatment, three patients had partial tumour responses. There was one case of progressive disease at one month, one case of stable disease at one month, two cases of partial responses at one, two and three months and one case of stable disease at one and two months, which became a pathological partial response at three months. CT scans from the treated lymph node tumour in the first patient in the trial clearly show the partial response, which at the time of the interim analysis, had lasted for over eight months. A metastatic tumour in this patient that was outside the radiation field also showed a partial response.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Subsequent to completion of the Phase Ia portion of this trial, we commenced patient enrolment in the Phase Ib portion. The Phase Ib trial will treat patients with a range of two to six intratumoural doses of REOLYSIN<sup>&reg;</sup> at 1x10<sup>10</sup> TCID<sub>50</sub> with a constant radiation dose of 36 Gy in 12 fractions. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The primary objective of our Phase Ib trial is to determine the MTD, DLT, and safety profile of REOLYSIN<sup>&reg;</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 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 this Ib trial.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><i><b><font size=2>U.K. Phase II Combination REOLYSIN<sup>&reg;</sup>/Radiation Clinical Trial</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In 2006, we received a letter of approval from the U.K. Medicines and Healthcare products Regulatory Agency (&#147;MHRA&#148;) for our Clinical Trial Application (&#147;CTA&#148;) to begin a Phase II clinical trial to evaluate the anti-tumour effects of intratumoural administration of REOLYSIN<sup>&reg;</sup> in combination with low-dose radiation in patients with advanced cancers. In December 2006, we initiated patient enrollment. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The trial is an open-label, single-arm, multi-centre Phase II study of REOLYSIN<sup>&reg;</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>&reg;</sup> at 1x10<sup>10</sup> TCID<sub>50</sub> with a constant localized radiation dose of 20 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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
The primary objective of the trial is to assess the anti-tumour  activity of the
combination of REOLYSIN<sup>&reg;</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>&reg;</sup>  in
patients with advanced cancers who are receiving radiation treatment.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>
<I><B><font SIZE=2>U.K. REOLYSIN</font></B></I><font size=2><sup>&reg;</sup></font><i><b><font size=2> in Combination with Paclitaxel and Carboplatin</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In 2006, we received a letter of approval from the MHRA for our CTA to begin a clinical trial using intravenous administration of REOLYSIN<sup>&reg;</sup> in combination with paclitaxel and carboplatin in patients with advanced cancers including melanoma, lung, and ovarian. The combination of paclitaxel and carboplatin chemotherapy is used in cancer patients with ovarian and lung cancers, and is also used widely in the treatment of many other types of cancer. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In studies conducted by the U.S. National Cancer Institute (&#147;NCI&#148;), the combination of REOLYSIN<sup>&reg;</sup> and paclitaxel was uniformly synergistic against six non-small cell lung cancer cell lines examined, including cell lines resistant to paclitaxel or REOLYSIN<sup>&reg;</sup>. Preclinical studies conducted at Cornell University also found that REOLYSIN<sup>&reg;</sup> in combination with platinum drugs enhanced the cytotoxicity of the chemotherapeutic agents. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>This trial has two components. The first is an open-label, dose-escalating, non-randomized study of REOLYSIN<sup>&reg;</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>&reg;</sup> intravenously. A maximum of three cohorts will be enrolled in the REOLYSIN<sup>&reg;</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>&reg;</sup> in combination with standard dosages of paclitaxel and carboplatin. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Eligible patients include those who have been diagnosed with advanced or metastatic solid tumours such as melanoma, lung and ovarian cancers that are refractory 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>&reg;</sup> when administered in combination with carboplatin and paclitaxel. 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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>U.S. Phase I Systemic Administration Clinical Trial</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In 2006, we completed patient enrolment in our U.S. Phase I U.S. clinical trial investigating the systemic delivery of REOLYSIN<sup>&reg;</sup> to treat patients with advanced cancers. A total of 18 patients were treated in the Phase I trial with REOLYSIN<sup>&reg;</sup> at escalating dosages of 1x10<sup>8</sup>, 3x10<sup>8</sup>, 1x10<sup>9</sup>, 3x10<sup>9</sup>, 1x10<sup>10</sup> or 3x10<sup>10</sup> TCID<sub>50</sub>. An MTD was not reached and the treatment appears to have been well tolerated by the patients. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The clinical trial was an open-label, dose-escalation Phase I study in which a single dose of REOLYSIN<sup>&reg;</sup> was administered intravenously to patients diagnosed with selected advanced or metastatic solid tumours that are refractory 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>&reg;</sup>. Secondary objectives include the evaluation of viral replication, immune response to the virus and any evidence of anti-tumour activity.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>U.S. Phase I/II Recurrent Malignant Glioma Clinical Trial</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In 2006, we began patient enrolment in our clinical trial to investigate the use of REOLYSIN<sup>&reg;</sup> for patients with recurrent malignant gliomas. This clinical trial is an open-label dose escalation Phase I/II trial in which a single dose of REOLYSIN<sup>&reg;</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>&reg;</sup> will be administered or infused into the tumour mass and surrounding tissue using a pump. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The primary objective of the study is to determine the maximum tolerated dose, dose limiting toxicity and safety profile of REOLYSIN<sup>&reg;</sup>. Secondary objectives include the evaluation of viral replication, immune response to the virus and any evidence of anti-tumour activity.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>U.S. National Cancer Institute</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In 2006,  the NCI commenced its solicitation process for two clinical trial studies, a Phase II study of REOLYSIN<sup>&reg;</sup> administered systemically in patients with melanoma and a Phase I/II study of REOLYSIN<sup>&reg;</sup> co-administered both systemically and intraperitoneally (&#147;IP&#148;) in patients with ovarian cancer. The purpose of the Phase I portion of the trial is to determine the MTD of REOLYSIN<sup>&reg;</sup> given by IP administration in combination with a constant systemic dose and dosing regimen. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Pre-Clinical Trial and Collaborative Program</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We perform pre-clinical studies and engage in collaborations to help support our clinical trial programs and expand our intellectual property base. Throughout 2006, we continued with studies examining the interaction between the immune system and the reovirus, the use of the reovirus as a co-therapy with existing chemotherapeutics and radiation, the use of new RAS active viruses as potential therapeutics, and to investigate new uses for the reovirus in therapy. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>During 2006, in conjunction with our various collaborators, we reported the results of a number of research collaborations. One of our collaborators presented a poster at the British Society of Gene Therapy 3<sup>rd</sup> annual conference in London U.K. Our investigators concluded that immune interventions which prolong local viral replication, and/or enhance levels of tumour specific T cells, should have significant therapeutic impacts both against the local, injected tumour and against systemic metastatic disease not accessible to direct viral injection.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>As well, a poster by Dr.&nbsp;E. Anders Kolb was presented at the AACR annual meeting in Washington D.C. The investigators tested reovirus against various pediatric sarcoma cell lines </font><i><font size=2>in vitro</font></i><font size=2> and </font><i><font size=2>in vivo</font></i><font size=2>. In all tumour lines evaluated, the reovirus exhibited significant antitumour activity. The investigators concluded that REOLYSIN<sup>&reg;</sup> demonstrates excellent anti-tumor activity </font><i><font size=2>in vitro</font></i><font size=2> and </font><i><font size=2>in vivo </font></i><font size=2>in childhood sarcoma cell lines, and that these promising results suggest that a clinical trial of systemic reovirus in pediatric solid tumours is warranted.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In the fourth quarter of 2006, Dr.&nbsp;Shizuko Sei of SAIC-Frederick, Inc., prime contractor to the U.S. National Cancer Institute at Frederick presented a poster at the 18th EORTC-NCI-AACR symposium on Molecular Targets and Cancer Therapeutics in Prague, Czech Republic. 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. Of particular interest to the researchers, 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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Manufacturing and Process Development </font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>At the beginning of 2006, we completed the production runs that were ongoing at the end of 2005, providing us with sufficient product to complete our U.K. Phase II combination REOLYSIN<sup>&reg;</sup>/radiation clinical trial and our existing Phase I clinical trials. At the same time, our process development activity helped improve virus yields from our manufacturing process. These improvements were transferred to our cGMP manufacturer and we began production runs under this improved process. These production runs are expected to provide sufficient REOLYSIN<sup>&reg;</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. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>
<b><font size=2>Intellectual Property</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>During 2006, four U.S. patents and one Canadian patent were issued. At the end of 2006, we exited with a total of 17 U.S., five Canadian and three European patents. We also have other patent applications filed in the U.S., Europe and Canada and other jurisdictions.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>Financial Impact</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We estimated at the beginning of 2006 that our cash usage would average less than $1,200,000 per month for 2006. Our actual cash usage for the year was $13,033,819 with $12,155,372 from operating activities and $878,447 from the purchases of intellectual property and capital assets. Our net loss for the year was $14,297,524 (see </font><i><font size=2>&#147;Results of Operations&#148;</font></i><font size=2>).</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>Cash Resources</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We have used the equity markets to acquire the cash resources required to fund our operations. In 2006, we received cash proceeds of $241,400 from the exercise of options. We exited 2006 with cash resources totaling $27,613,748 (see </font><i><font size=2>&#147;Liquidity and Capital Resources&#148;)</font></i><font size=2>.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=3>REOLYSIN<sup>&reg;</sup> Development For 2007</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We believe that we will continue to expand our clinical trials to include other studies investigating REOLYSIN<sup>&reg;</sup> in combination with other chemotherapies. As well, we expect to continue to enroll patients in our ongoing clinical trials completing enrollment in our U.K. Phase Ia/Ib and Phase II combination REOLYSIN<sup>&reg;</sup>/radiation clinical trials by the end of 2007. We also believe that we will complete enrollment in our approved chemotherapy co-therapy studies in 2008. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We expect to produce REOLYSIN<sup>&reg;</sup> in 2007 to supply our clinical trial program. We also plan to complete our scale up studies in an effort to continue to improve our manufacturing process.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We estimate, based on our expected activity in 2006 that our monthly cash usage in 2007 may increase to $1,400,000 per month (see </font><i><font size=2>&#147;Liquidity and Capital Resources&#148;</font></i><font size=2>).</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=3>Recent 2007 Progress</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><I><B><font SIZE=2>U.K. REOLYSIN</font></B></I><font size=2><sup>&reg;</sup></font><i><b><font size=2> in Combination with Docetaxel </font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>On January 3, 2007, we announced that we received a letter of approval from the MHRA for our CTA to begin a clinical trial using intravenous administration of REOLYSIN<sup>&reg;</sup> in combination with docetaxel (Taxotere<sup>&reg;</sup>) in patients with advanced cancers including bladder, prostate, lung and upper gastro-intestinal. The principal investigator is Professor Hardev Pandha of The Royal Surrey Hospital, U.K. Docetaxel is used in patients with lung, breast and prostate cancers, and is also used widely in the treatment of many other types of cancers.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The trial has two components. The first is an open-label, dose-escalating, non-randomized study of REOLYSIN<sup>&reg;</sup> given intravenously with docetaxel every three weeks. A standard dosage of docetaxel will be delivered with escalating dosages of REOLYSIN<sup>&reg;</sup> intravenously. A maximum of three cohorts will be enrolled in the REOLYSIN<sup>&reg;</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>&reg;</sup> in combination with a standard dosage of docetaxel.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
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 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>&reg;</sup> when administered in </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><I><B><font SIZE=2>U.K. REOLYSIN</font></B></I><font size=2><sup>&reg;</sup></font><i><b><font size=2> in Combination with Gemcitabine</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>On January 3, 2007, we announced that we had received a letter of approval from the MHRA to begin a clinical trial using intravenous administration of REOLYSIN<sup>&reg;</sup> in combination with gemcitabine (Gemzar<sup>&reg;</sup>) in patients with advanced cancers including pancreatic, lung and ovarian. The principal investigators are Dr.&nbsp;Johann de Bono of The Royal Marsden NHS Foundation Trust and The Institute of Cancer Research, London and Professor Jeff Evans of the University of Glasgow and the Beatson Oncology Centre in Glasgow, Scotland. Gemcitabine is used in patients with lung, pancreatic and ovarian cancers and is also used widely in the treatment of many other types of cancers. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>This trial has two components. The first is an open-label, dose-escalating, non-randomized study of REOLYSIN<sup>&reg;</sup> given intravenously with gemcitabine every three weeks. A standard dosage of gemcitabine will be delivered with escalating dosages of REOLYSIN<sup>&reg;</sup> intravenously. A maximum of three cohorts will be enrolled in the REOLYSIN<sup>&reg;</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>&reg;</sup> in combination with a standard dosage of gemcitabine.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Eligible patients include those who have been diagnosed with advanced or metastatic solid tumours including pancreatic, lung and ovarian cancers that are refractory 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>&reg;</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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><i><b><font size=2>Financing Activity</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>On February 22, 2007, we issued 4,000,000 units at a price of $3.00 per unit for proceeds of $12,000,000. Each unit consisted of one common share and one-half of one common share purchase warrant. Each whole common share purchase warrant shall entitle the holder thereof to acquire one common share upon payment of $3.50 expiring on February 22, 2010. As well, we granted an over-allotment option of 600,000 units to the underwriter which can be exercised, in whole or in part, prior to March 24, 2007 for additional cash proceeds of $1,800,000. The net proceeds from this offering, estimated to be approximately $10,590,000, will be used for our clinical trial program, manufacturing activities in support of the clinical trial program and for general corporate purposes. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>ACCOUNTING POLICIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Critical Accounting Policies and Estimates</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In preparing our financial statements, we are required to make certain estimates, judgments and assumptions that we believe are reasonable based upon the information available. These estimates and assumptions affect the reported amounts of assets at the date of the financial statements and the reported amounts of expenses during the periods presented. Significant estimates are used for, but not limited to, the treatment of our research and development expenditures, the assessment of realizable value of long-lived assets, the amortization period of intellectual property and the calculation of stock based compensation.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The significant accounting policies which we believe are the most critical to aid in fully understanding and evaluating our reported financial results include the following:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
<i><b><font size=2>Research and Development </font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Our research and development costs are expensed as they are incurred. Under Canadian generally accepted accounting principles, development costs should be capitalized if certain criteria are met. Companies with products in clinical trials do not necessarily meet these criteria. Our development costs do not meet the following two criteria: (i) the technical feasibility of the product or process has been established; and (ii) the future market for the product or process is clearly defined. With regard to (i), we have completed six Phase I clinical trials and are presently enrolling or have permission to commence six additional Phase I clinical trial studies for REOLYSIN<sup>&reg;</sup>. We are also planning to add to our clinical trial program. Until the appropriate clinical studies have been completed, the technical feasibility of this product will not be known. With regard to (ii), the future market for the
product will not be clearly defined until the completion of the clinical studies. Clinical studies not only determine the technical feasibility of the product, but also provide information regarding the proper use of the product and, therefore, the future market. Once the feasibility is determined a New Drug Application, or equivalent, is made to the appropriate regulatory body. Regulatory approval is required before the product can be marketed. For these reasons, our development costs are expensed and not capitalized.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Capitalization and Amortization of Patent Costs</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We treat third party costs incurred (primarily legal and registration costs) in the development of our Patent portfolio as limited-life intangible assets, and we amortize the costs related to these assets over the lesser of 17 years or their estimated useful life. We also review the valuation of our Patent costs for impairment when any events that might give rise to impairment are known to us. If there is an indication of impairment, we would assess the fair value of our Patents and would record a reduction if the fair value were less than the book value.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In capitalizing these costs, we are recognizing the inherent future benefit of our Patents, not only in protection of our own potential products, but also as a possible asset that could give rise to revenues in the future through licensing agreements. While Patent life is different in different jurisdictions it is normally considered to be 20 years from date of application. With an assumption of an average of three years from initial Patent application to Patent issuance, we have set a maximum of 17 years to amortize the costs from the date of issuance. We have then assessed the nature of the market and the continuing efforts to develop and market new and better products, as well as the incurrence of costs associated with Patents that have been issued and, as a result, we have chosen to amortize the costs on a straight-line basis over ten years.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>As the product to which the Patents relate is in the development stage, with commercial recognition and revenue potential highly uncertain, should we experience a significant failure in our clinical trial program or other areas of risk, then the value of the Patents could be in serious question, giving rise to a possible write-down or write-off of the asset.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In the event that we are successful in our product development and sales, or other parties enter into licensing agreements with us, then it is also possible that the Patents may have a life and value beyond the ten years assumed for the amortization policy.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In any event, the revision to any of these policies or estimates outlined above would impact losses but not impact cash flows.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Changes in Accounting Policy including Initial Adoption</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Financial Instruments</font></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
On  January  1, 2007,  we  prospectively  adopted  the new  Canadian  accounting
standards  for  financial   instruments  and  comprehensive  income.  These  new
accounting   standards  will  impact  our   accounting   policy  for  investment
securities.  The new rules  will  require us to  classify  these  securities  as
held-to-maturity or  available-for-sale.  Available-for-sale  securities will be
measured  at fair  value  with gains and  losses  recorded  in a new  section of
shareholders&#146;  equity called other comprehensive  income.  There will be
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>no change in accounting for held-to-maturity securities. We do not expect these standards to have a significant impact on our financial statements upon adoption as we expect our short-term investments to be classified as held-to-maturity securities. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Fair Presentation</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We prepare our financial statements in accordance with GAAP. As a result of complying with GAAP, we believe that the following should be mentioned in an effort to understand and fairly present our financial information:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Stock Based Compensation</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>As required by the fair value based method for measuring stock based compensation, we use the Black Scholes Option Pricing Model (&#147;Black Scholes&#148; or the &#147;Model&#148;) to calculate the fair value of our options. Though there are other models available to calculate the option values (for example, the binomial model), Black Scholes is currently widely used and accepted by other publicly traded companies. Therefore, we have concluded that Black Scholes is the appropriate option pricing model to use for our stock options at this time. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Black Scholes uses inputs in its calculation of fair value that requires us to make certain estimates and assumptions. For 2006, we used the following weighted average assumptions:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="336" valign=top style='border-bottom:solid black .25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=top style='border-bottom:solid black .25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Risk-free interest rate</font></p> </td>
        <td width="94" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>4.08%</font></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Expected hold period to exercise</font></p> </td>
        <td width="94" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>3.5 years</font></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Volatility in the price of the our shares</font></p> </td>
        <td width="94" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>63%</font></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Dividend yield</font></p> </td>
        <td width="94" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Zero</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>A change in these estimates and assumptions will impact the value calculated by the Model. For instance, the volatility in the price of our shares is based on the quoted trading price. We assume that weekly trading prices best reflects our trading price volatility. However, an entity can choose between daily, weekly, monthly or quarterly trading prices in the volatility calculation. For example, based upon periods chosen, if we were to use daily trading prices, volatility would increase 5%, resulting in an option value increase of 5% from that calculated from the stated volatility. If we were to use monthly trading prices over the same period, volatility would increase 9%, resulting in an option value increase of 13%. Also, volatility would change based on the period chosen and the frequency of price points chosen.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Model also uses an expected hold period to exercise in its calculation of fair value. When we are estimating the expected hold period to exercise we take into consideration past history, the current trading price and volatility of our common shares and have concluded that 3.5 years is an appropriate estimate. However, our options have a 10 year life and given the fluctuations in our stock price the expected hold period could be different. If the hold period was to increase 1 year, there would have been a 14% increase in our stock based compensation expense. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Consequently, in complying with GAAP and selecting what we believe are the most appropriate assumptions under the circumstances, we have increased our reported non-cash employee stock based compensation expense for the year by $403,550. However, given the above discussion this expense could be increased between 5% - 14% and still be in accordance with GAAP. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Warrant Values</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
Since inception, we have raised cash through the issue of units and the exercise
of warrants and options.  Each issued unit consisted of one common share and one
half of one common share purchase warrant with each whole warrant exercisable at
a specified  price for one additional  common share for up to 36 months from the
issue date.  GAAP requires that when  recording the issued units, a value should
be ascribed to </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>each component of the units based on the component&#146;s fair value. The fair value of our common shares is established based on trading on stock exchanges in Canada and the U.S. However, as the warrants do not trade on an exchange, the Black Scholes Option Pricing Model was used to determine the fair value of the warrants. In the event that the total calculated value of each individual component is greater than the price paid for the unit the value of each component is reduced on a relative basis until the total is equal to the unit&#146;s issue price. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>For reasons discussed above under &#147;Stock Based Compensation&#148;, the Model can produce a wide range of calculated values for our warrants. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Initial Value of Our Intellectual Property</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In 1999, we were acquired by SYNSORB Biotech Inc. (&#147;SYNSORB&#148;) through the purchase of all of our share capital for $2,500,000. In connection with this acquisition, the basis of accounting for the assets and liabilities was changed to reflect SYNSORB&#146;s cost of acquiring theses assets and liabilities. This was achieved through the application of &#147;push down&#148; accounting. At the time, our major asset was our intellectual property; therefore the $2,500,000 was allocated to this asset with the corresponding credit to contributed surplus. This accounting treatment, permitted under GAAP, increased the value of our assets and shareholders&#146; equity. As of December 31, 2006, the net book value of our original intellectual property was $583,333. Consequently, without the application of push down accounting the value of our intellectual property and shareholders&#146; equity would be $583,333
lower than presented in the 2006 audited financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>SELECTED ANNUAL INFORMATION</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="516" style=' border-collapse:collapse'>
    <tr>
        <td width="293" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><b><font size=2>$</font></b></p> </td>
        <td width="74" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><b><font size=2>$</font></b></p> </td>
        <td width="74" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><b><font size=2>2004</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><b><font size=2>$</font></b></p> </td> </tr>
    <tr>
        <td width="293" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Revenues</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0in'><font size=2>&#151;</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0in'><font size=2>&#151;</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0in'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="293" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Interest income</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0in'><font size=2>1,233,809</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0in'><font size=2>783,456</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0in'><font size=2>699,757</font></p> </td> </tr>
    <tr>
        <td width="293" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Net loss<sup>(2)</sup></font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0in'><font size=2>14,297,524</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0in'><font size=2>12,781,831</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0in'><font size=2>12,956,119</font></p> </td> </tr>
    <tr>
        <td width="293" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Basic and diluted loss per share<sup>(2), (3)</sup></font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0in'><font size=2>0.39</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0in'><font size=2>0.39</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0in'><font size=2>0.45</font></p> </td> </tr>
    <tr>
        <td width="293" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Total assets <sup>(1), (3)</sup></font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0in'><font size=2>33,565,692</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0in'><font size=2>46,294,326</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0in'><font size=2>39,488,641</font></p> </td> </tr>
    <tr>
        <td width="293" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Total long term financial liabilities <sup>(4)</sup></font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0in'><font size=2>150,000</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0in'><font size=2>150,000</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0in'><font size=2>150,000</font></p> </td> </tr>
    <tr>
        <td width="293" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Cash dividends declared per share<sup>(5)</sup></font></p> </td>
        <td width="74" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0in'><font size=2>Nil</font></p> </td>
        <td width="74" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0in'><font size=2>Nil</font></p> </td>
        <td width="74" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0in'><font size=2>Nil</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>Notes:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>(1)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>Subsequent to the acquisition of Oncolytics Biotech Inc. by SYNSORB in April 1999, we applied push down accounting. See note 2 to the audited financial statements for 2006.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>(2)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>Included in net loss and net loss per share is stock based compensation expense of $403,500 (2005 &#150; $64,104; 2004 &#150; $2,668,570).</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>(3)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>We issued 284,000 common shares for cash proceeds of $241,400 in 2006 (2005 &#150; 4,321,252 common shares for cash proceeds of $18,780,189; 2004 &#150; 4,685,775 common shares for cash proceeds of $23,495,961). In addition, 21,459 common shares were issued in 2004 as partial consideration for the cancellation of a portion of our contingent payments (see note 9 to the audited financial statements for 2006).</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>(4)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>The long-term debt recorded in 2006, 2005, and 2004 represents repayable loans from the Alberta Heritage Foundation.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>(5)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>We have not declared or paid any dividends since incorporation.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
<B><font SIZE=3>RESULTS OF OPERATIONS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Net loss for the year ended December 31, 2006 was $14,297,524 compared to $12,781,831 and $12,956,119 for 2005 and 2004, respectively. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Research and Development Expenses (&#147;R&amp;D&#148;)</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="611" style=' border-collapse:collapse'>
    <tr>
        <td width="377" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p>
<p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2004</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Manufacturing and related process development expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>4,508,882</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>4,706,203</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>3,868,883</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Clinical trial expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>2,726,331</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,880,059</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>799,990</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Pre-clinical trial expenses and collaborations</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>1,127,612</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>786,488</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>824,889</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Cancellation of contingent payment obligation</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>400,000</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=2>Quebec scientific research and experimental development refund</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>(52,344)</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>(21,436)</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Other R&amp;D expenses</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>2,225,208</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,936,227</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,235,672</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Research and development expenses</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>10,535,689</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>9,308,977</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>7,107,998</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>In 2006, R&amp;D expenses were $10,535,689 compared to $9,308,977 and $7,107,998 in 2005 and 2004, respectively. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Manufacturing &amp; Related Process Development (&#147;M&amp;P&#148;)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>M&amp;P expenses include product manufacturing expenses and process development. Production manufacturing expenses include third party direct manufacturing costs, quality control testing, and fill costs. Process development expenses include costs associated with studies that examine components of our manufacturing process looking for improvements and costs associated with the creation and testing of our master and working viral and cell banks. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="611" style=' border-collapse:collapse'>
    <tr>
        <td width="377" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p>
<p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2004</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Product manufacturing expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>3,050,647</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>4,326,577</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>2,212,586</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Technology transfer expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>457,975</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>656,346</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Process development expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>1,000,260</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>379,626</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>999,951</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Manufacturing and related process development expenses</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>4,508,882</font></b></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>4,706,203</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>3,868,883</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Our M&amp;P expenses for 2006 were $4,508,882 compared to $4,706,203 and $3,868,883 for 2005 and 2004, respectively. In the first part of 2006, we completed the production runs that were ongoing at the end of 2005, providing us with sufficient product to complete our U.K. Phase II combination REOLYSIN<sup>&reg;</sup>/radiation clinical trial and our existing Phase I clinical trials. At the same time, our process development activity helped improve virus yields from our manufacturing process which we subsequently transferred to our cGMP manufacturer. Once this transfer was completed we began additional production runs in the later part of 2006 that will be used to supply our expanding Phase II and Phase I/II clinical trials. Our process development activity has now shifted focus to the examination of the potential scale up of our manufacturing process. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In 2005, we were focused on the production of REOLYSIN<sup>&reg;</sup> that was to be used in our Phase I clinical trials. We entered into multiple cGMP and non-cGMP production runs throughout 2005 with our cGMP manufacturer. In 2004, we entered into an agreement to commence the manufacturing of REOLYSIN<sup>&reg;</sup> and consequently incurred expenses associated with the technology transfer of our manufacturing process. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
We expect that our M&amp;P  expenses in 2007 will decrease  compared to 2006. We
are  expecting to enter into  additional  production  run  contracts to ensure a
supply  of  REOLYSIN<sup>&reg;</sup>  and we  expect to  continue  with  process
development  activity that examines the potential scale up of our  manufacturing
process. We are also examining ways to reduce our economic dependence  resulting
from having only a single cGMP  manufacturer.  This might include  building up a
level of inventory, increasing the scale of each production </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>run, engaging another cGMP manufacturer or manufacturing REOLYSIN<sup>&reg;</sup> ourselves. Depending on how we mitigate our risk of economic dependence our expectation of our 2007 M&amp;P expenses may change. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Clinical Trial Program</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Clinical trial expenses include those costs associated with our clinical trial program in the U.S., U.K. and Canada as well as those incurred in the preparation of commencing other clinical trials. Included in clinical trial expenses are direct patient costs, contract research organization (&#147;CRO&#148;) expenses, clinical trial site costs and other costs associated with our clinical trial program.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="611" style=' border-collapse:collapse'>
    <tr>
        <td width="377" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p>
<p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2004</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Direct clinical trial expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>2,378,211</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,683,120</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>649,405</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Other clinical trial expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>348,120</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>196,939</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>150,585</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Clinical trial expenses</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>2,726,331</font></b></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,880,059</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>799,990</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In 2006, we incurred costs directly associated with ongoing clinical trials of $2,378,211 compared to $1,683,120 and $649,405 for 2005 and 2004, respectively. In 2006, we completed enrollment in our U.S. and U.K. Phase I systemic trials and the Phase Ia portion of our U.K. combination REOLYSIN<sup>&reg;</sup>/radiation clinical trial. As well, we received authorization to begin and commenced enrollment in our U.K. Phase II combination REOLYSIN<sup>&reg;</sup>/radiation trial and continued to enroll in the Phase Ib portion of our Phase Ia/Ib U.K. combination REOLYSIN<sup>&reg;</sup>/radiation and commenced enrollment in our U.S. Phase I/II recurrent malignant glioma trial. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>In 2005, we were actively enrolling in four clinical trials compared to having only two ongoing studies in 2004. Also, we concluded our enrollment in the Canadian glioma study and incurred site closure expenses towards the end of 2005. In 2004, we provided a final update with respect to our T2 prostate cancer study and incurred site closure costs.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>We expect our clinical trial expenses will continue to increase in 2007 compared to 2006. The increase in these expenses is expected to arise from enrollment in our existing clinical trials and enrollment related to the planned expansion into further clinical trials. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Pre-Clinical Trial Expenses and Research Collaborations</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Pre-clinical trial expenses include toxicology studies and are incurred by us in support of expanding our clinical trial program into other indications, drug combinations and jurisdictions. Research collaborations are intended to expand our intellectual property related to reovirus and other viruses and identify potential licensing opportunities arising from our technology base.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="611" style=' border-collapse:collapse'>
    <tr>
        <td width="377" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p>
<p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2004</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Research collaboration expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>1,064,692</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>652,393</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>262,910</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Pre-clinical trial expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:17.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>62,920</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>134,095</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>561,979</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Pre-clinical trial expenses and research collaborations</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>1,127,612</font></b></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>786,488</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>824,889</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In 2006, our research collaboration expenses were $1,064,692 compared to $652,393 and $262,910 in 2005 and 2004, respectively. In 2006, we continued to expand the number of collaborations we entered into compared to 2005. Our research collaboration activity continues to focus on the interaction of 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 of the reovirus as a therapeutic. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
In 2005,  we  began  expanding  our  collaborative  activities  and  started  to
investigate  the  interaction  of the reovirus with the immune system along with
the use of the reovirus as a co-therapy with existing </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>chemotherapies and radiation. In 2004, our collaborative activities included studies that used reovirus as a co-therapy in combination with existing chemotherapies and radiation. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In 2006, we incurred pre-clinical trial expenses of $62,920 compared to $134,095 and $561,979 in 2005 and 2004, respectively. Our pre-clinical trial activity changes from year to year as we move through our collaborative and development program. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In 2007, we expect that pre-clinical trial expenses and research collaborations will decline to levels incurred in 2005 and 2004. We expect to continue with our various collaborations in order to provide support for our expanding clinical trial program. As well, we may expand our collaborative activities to include other viruses. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Other Research and Development Expenses</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Other R&amp;D expenses include compensation expenses for employees (excluding stock based compensation), consultant fees, travel and other miscellaneous R&amp;D expenses. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="611" style=' border-collapse:collapse'>
    <tr>
        <td width="377" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p>
<p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2004</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>R&amp;D consulting fees</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>321,659</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>675,530</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>290,135</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>R&amp;D salaries and benefits</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>1,548,418</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,018,144</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>722,136</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Other R&amp;D expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>355,131</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>242,553</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>223,401</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Other research and development expenses</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>2,225,208</font></b></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,936,227</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,235,672</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In 2006, our R&amp;D consulting fees were $321,659 compared to $675,530 and $290,135 in 2005 and 2004, respectively. In each of the last three years, we incurred consulting activity associated with our ongoing clinical trials and assistance with our clinical trial applications. In 2005, we incurred similar consulting activity as well as activity associated with our scientific advisory board and the hiring of our Chief Medical Officer. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Our R&amp;D salaries and benefits were $1,548,418 compared to $1,018,144 and $722,136 in 2005 and 2004, respectively. The increase is a result of increases in salary levels along with the hiring of our Chief Medical Officer in the third quarter of 2005. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In 2007, we expect that our Other R&amp;D expenses will remain consistent with 2006. We expect that salaries and benefits will increase in 2007 to reflect increasing compensation levels. Our R&amp;D consulting fees should remain consistent with 2006 levels. However, we may choose to engage additional consultants to assist us in the development of protocols and regulatory filings for our additional combination therapy and Phase II clinical trial studies possibly causing our R&amp;D consulting expenses to increase.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Operating Expenses</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="611" style=' border-collapse:collapse'>
    <tr>
        <td width="377" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p>
<p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2004</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Public company related expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>2,494,803</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>2,156,614</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,910,611</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Office expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>1,135,341</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>926,758</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>893,058</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=2>Operating expenses</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>3,630,144</font></b></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>3,083,372</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>2,803,669</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In 2006, we incurred operating expenses of $3,630,144 compared to $3,083,372 and $2,803,669 in 2005 and 2004, respectively. The reason for the change is as follows:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
Public company related expenses include costs associated with investor relations
activities,  legal and accounting fees, corporate insurance,  and transfer agent
and other fees  relating to our U.S. and Canadian  stock  listings.  In 2006, we
incurred  public company related  expenses of $2,494,803  compared to $2,156,614
and  $1,910,611 in 2005 and 2004,  respectively.  The increase in public company
related </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>expenses has been a result of incurring financial advisory services, executive search consulting fees associated with the appointment of two new directors and an increase in our investor relations activity in 2006 compared to 2005 and 2004. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Office expenses include compensation costs (excluding stock based compensation), office rent, and other office related costs. In 2006, we incurred office expenses of $1,135,341 compared to $926,758 and $893,058 in 2005 and 2004, respectively. Our office expense activity has remained consistent over the last three years with increases mainly due to increased compensation levels and a general increase in office costs. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Stock Based Compensation</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="611" style=' border-collapse:collapse'>
    <tr>
        <td width="377" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p>
<p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2004</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=2>Stock based compensation</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>403,550</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>64,104</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>2,668,570</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Non-cash stock based compensation recorded for 2006 was $403,550 compared to $64,104 and $2,668,570 in 2005 and 2004, respectively. This expense is associated with the granting of stock options to our employees, directors, and certain consultants and in 2006 there was an increase in the number of options granted due to the two newly appointed directors compared to 2005. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Foreign Exchange Loss (Gain)</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="611" style=' border-collapse:collapse'>
    <tr>
        <td width="377" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p>
<p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2004</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Foreign exchange loss (gain)</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:17.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>35,270</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>253,608</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>358,068</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>We acquire investments in foreign currency to pay for anticipated expenses that are to be incurred in the U.S. and the U.K. As a result of fluctuations in the Canadian dollar relative to the U.S. dollar and British pound, we recorded a foreign exchange loss of $35,270 compared to $253,608 and $358,068 in 2005 and 2004, respectively. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Sale of Investments</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="611" style=' border-collapse:collapse'>
    <tr>
        <td width="377" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p>
<p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2004</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=2>Gain on partial sale of investment in BCY LifeSciences Inc.</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:27.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>(765)</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>(34,185)</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=2>Net gain from sale of investments </font></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:27.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>(765)</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>(34,185)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>BCY LifeSciences Inc. (&#147;BCY&#148;)</font></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>In 2005, we sold 120,000 (2004 &#150; 697,945) common shares of BCY for net cash proceeds of $7,965 (2004 &#150; $133,609). This resulted in an accounting gain of $765 (2004 &#150; $34,185). </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Commitments</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>As at December 31, 2006, we are committed to payments totaling $650,000 during 2007 for activities related to clinical trial activity and collaborations. All of these committed payments are considered to be part of our normal course of business.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
<B><font SIZE=2>SUMMARY OF QUARTERLY RESULTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The following unaudited quarterly information is presented in thousands of dollars except for per share amounts:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="643" style=' border-collapse:collapse; '>
    <tr>
        <td width="151" style='border:solid black .5pt;border-color:gray;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="4" style='border:solid black .5pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:12pt'><b><font size=2>2006</font></b></p> </td>
        <td width="18" style='border:solid black .5pt;border-color:gray;border-left: none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="4" style='border:solid black .5pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:12pt'><b><font size=2>2005</font></b></p> </td> </tr>
    <tr>
        <td width="151" style='border:solid black .5pt;border-color:gray;border-top: none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="60" style='border-top:none;border-left:none;border-bottom: solid black .5pt;border-right:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><b><font size=2>Dec.</font></b></p> </td>
        <td width="60" style='border-top:none;border-left:none;border-bottom: solid black .5pt;border-right:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><b><font size=2>Sept.<sup> </sup></font></b></p> </td>
        <td width="60" style='border-top:none;border-left:none;border-bottom: solid black .5pt;border-right:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><b><font size=2>June</font></b></p> </td>
        <td width="64" style='border-top:none;border-left:none;border-bottom: solid black .5pt;border-right:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><b><font size=2>March</font></b></p> </td>
        <td width="18" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="57" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><b><font size=2>Dec.<sup> </sup></font></b></p> </td>
        <td width="60" style='border-top:none;border-left:none;border-bottom: solid black .5pt;border-right:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><b><font size=2>Sept.</font></b></p> </td>
        <td width="60" style='border-top:none;border-left:none;border-bottom: solid black .5pt;border-right:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><b><font size=2>June</font></b></p> </td>
        <td width="54" style='border-top:none;border-left:none;border-bottom: solid black .5pt;border-right:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><b><font size=2>March</font></b></p> </td> </tr>
    <tr>
        <td width="151" style='border:solid black .5pt;border-color:gray;border-top: none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><b><font size=2>Revenue</font></b></p> </td>
        <td width="60" style='border-top:none;border-left:none;border-bottom: solid black .5pt;border-right:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="64" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="18" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="57" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>&#151;</font></b></p> </td>
        <td width="54" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>&#151;</font></b></p> </td> </tr>
    <tr>
        <td width="151" style='border:solid black .5pt;border-color:gray;border-top: none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><b><font size=2>Interest income</font></b></p> </td>
        <td width="60" style='border-top:none;border-left:none;border-bottom: solid black .5pt;border-right:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>286</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>320</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>335</font></b></p> </td>
        <td width="64" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>292</font></b></p> </td>
        <td width="18" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="57" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>160</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>211</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>168</font></b></p> </td>
        <td width="54" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>245</font></b></p> </td> </tr>
    <tr>
        <td width="151" style='border:solid black .5pt;border-color:gray;border-top: none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><b><font size=2>Net loss<sup> (3)</sup></font></b></p> </td>
        <td width="60" style='border-top:none;border-left:none;border-bottom: solid black .5pt;border-right:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>4,890</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>3,425</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>2,988</font></b></p> </td>
        <td width="64" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>2,995</font></b></p> </td>
        <td width="18" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="57" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>3,941</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>3,510</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>2,955</font></b></p> </td>
        <td width="54" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>2,377</font></b></p> </td> </tr>
    <tr>
        <td width="151" style='border:solid black .5pt;border-color:gray;border-top: none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><b><font size=2>Basic and diluted loss per common share<sup>(3)</sup></font></b></p> </td>
        <td width="60" style='border-top:none;border-left:none;border-bottom: solid black .5pt;border-right:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><br> <b><font size=2>$0.13</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><br> <b><font size=2>$0.09</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><br> <b><font size=2>$0.08</font></b></p> </td>
        <td width="64" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><br> <b><font size=2>$0.08</font></b></p> </td>
        <td width="18" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="57" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><br> <b><font size=2>$0.12</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><br> <b><font size=2>$0.11</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><br> <b><font size=2>$0.09</font></b></p> </td>
        <td width="54" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><br> <b><font size=2>$0.07</font></b></p> </td> </tr>
    <tr>
        <td width="151" style='border:solid black .5pt;border-color:gray;border-top: none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><b><font size=2>Total assets<sup>(1), (4)</sup></font></b></p> </td>
        <td width="60" style='border-top:none;border-left:none;border-bottom: solid black .5pt;border-right:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>33,566</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>37,980</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>40,828</font></b></p> </td>
        <td width="64" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>43,660</font></b></p> </td>
        <td width="18" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="57" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>46,294</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>34,538</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>38,081</font></b></p> </td>
        <td width="54" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>40,519</font></b></p> </td> </tr>
    <tr>
        <td width="151" style='border:solid black .5pt;border-color:gray;border-top: none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><b><font size=2>Total cash<sup>(2), (4)</sup></font></b></p> </td>
        <td width="60" style='border-top:none;border-left:none;border-bottom: solid black .5pt;border-right:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>27,614</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>31,495</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>34,501</font></b></p> </td>
        <td width="64" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>37,687</font></b></p> </td>
        <td width="18" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="57" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>40,406</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>28,206</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>31,975</font></b></p> </td>
        <td width="54" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>34,713</font></b></p> </td> </tr>
    <tr>
        <td width="151" style='border:solid black .5pt;border-color:gray;border-top: none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><b><font size=2>Total long-term debt<sup>(5)</sup></font></b></p> </td>
        <td width="60" style='border-top:none;border-left:none;border-bottom: solid black .5pt;border-right:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>150</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>150</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>150</font></b></p> </td>
        <td width="64" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>150</font></b></p> </td>
        <td width="18" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="57" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>150</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>150</font></b></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>150</font></b></p> </td>
        <td width="54" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>150</font></b></p> </td> </tr>
    <tr>
        <td width="151" style='border:solid black .5pt;border-color:gray;border-top: none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><b><font size=2>Cash dividends declared<sup>(6)</sup></font></b></p> </td>
        <td width="60" style='border-top:none;border-left:none;border-bottom: solid black .5pt;border-right:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>Nil</font></b></p> </td>
        <td width="60" style='border-top:none;border-left:none;border-bottom: solid black .5pt;border-right:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>Nil</font></b></p> </td>
        <td width="60" style='border-top:none;border-left:none;border-bottom: solid black .5pt;border-right:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>Nil</font></b></p> </td>
        <td width="64" style='border-top:none;border-left:none;border-bottom: solid black .5pt;border-right:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>Nil</font></b></p> </td>
        <td width="18" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="57" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>Nil</font></b></p> </td>
        <td width="60" style='border-top:none;border-left:none;border-bottom: solid black .5pt;border-right:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>Nil</font></b></p> </td>
        <td width="60" style='border-top:none;border-left:none;border-bottom: solid black .5pt;border-right:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>Nil</font></b></p> </td>
        <td width="54" style='border-top:none;border-left:none;border-bottom: solid black .5pt;border-right:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:12pt'><b><font size=2>Nil</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in; text-indent:-0.25in;text-align:left;'><font size=1>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>(1)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>Subsequent to the acquisition of Oncolytics Biotech Inc. by SYNSORB in April 1999, we applied push down accounting. See note 2 to the audited financial statements for 2006.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>(2)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>Included in total cash are cash and cash equivalents plus short-term investments.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>(3)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>Included in net loss and loss per common share between December 2006 and January 2004 are quarterly stock based compensation expenses of $109,670, $34,671, $222,376, $36,833, $38,152, $4,173, $8,404, and $13,375, respectively.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>(4)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>We issued 284,000 common shares for cash proceeds of $241,400 during 2006 (2005 &#150; 4,321,252 common shares for cash proceeds of $18,789,596).</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>(5)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>The long-term debt recorded represents repayable loans from the Alberta Heritage Foundation.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>(6)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>We have not declared or paid any dividends since incorporation.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>FOURTH QUARTER</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Statement of loss for the three month period ended December 31, 2006 and 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="331" valign=top style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><b><font size=2>$</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><i><b><font size=2>(unaudited)</font></b></i><i></i></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><b><font size=2>$</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><i><b><font size=2>(unaudited)</font></b></i><i></i></p> </td> </tr>
    <tr>
        <td width="331" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><b><font size=2>Expenses</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="331" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Research and development expenses</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>3,953,002</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>2,809,943</font></p> </td> </tr>
    <tr>
        <td width="331" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Operating expenses</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>840,497</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>973,470</font></p> </td> </tr>
    <tr>
        <td width="331" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Stock based compensation</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>109,670</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>38,152</font></p> </td> </tr>
    <tr>
        <td width="331" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Foreign exchange loss (gain)</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:17.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>37,973</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>55,127</font></p> </td> </tr>
    <tr>
        <td width="331" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Amortization &#150; intellectual property</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>226,150</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>206,268</font></p> </td> </tr>
    <tr>
        <td width="331" valign=top style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Amortization &#150; property and equipment</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:22.5pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>9,258</font></b></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>17,440</font></p> </td> </tr>
    <tr>
        <td width="331" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>5,176,550</font></b></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>4,100,400</font></p> </td> </tr>
    <tr>
        <td width="331" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="331" valign=top style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Interest income</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:9.0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>(286,445)</font></b></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:10.5pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>(159,841)</font></p> </td> </tr>
    <tr>
        <td width="331" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="331" valign=top style='border-bottom: solid black 2.25pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Net loss</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>4,890,105</font></b></p> </td>
        <td width="84" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>3,940,559</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
<B><font SIZE=2>FOURTH QUARTER REVIEW OF OPERATIONS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>For the three month period ended December 31, 2006, our net loss was $4,890,105 compared to $3,940,559 for the three month period ended December 31, 2005. The reasons for the increase are as follows:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Research and Development Expenses (&#147;R&amp;D&#148;)</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="533" style=' border-collapse:collapse'>
    <tr>
        <td width="377" valign=top style='border-bottom: solid black .25pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p>
<p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><i><b><font size=2>(unaudited)</font></b></i><i></i></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><i><b><font size=2>(unaudited)</font></b></i><i></i></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Manufacturing and related process development expenses (&#147;M&amp;P&#148;) </font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>1,757,675</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,121,774</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Clinical trial expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>805,864</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>725,382</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Pre-clinical trial expenses and research collaborations</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>436,058</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>262,015</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='border-bottom: solid black .25pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Other R&amp;D expenses</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>953,405</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>700,772</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='border-bottom: solid black 2.25pt;padding: 0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Research and development expenses</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>3,953,002</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>2,809,943</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Our R&amp;D expenses were $3,953,002 in the fourth quarter of 2006 compared to $2,809,943 in the fourth quarter of 2005. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Manufacturing &amp; Related Process Development (&#147;M&amp;P&#148;)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="533" style=' border-collapse:collapse'>
    <tr>
        <td width="377" valign=top style='border-bottom: solid black .25pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p>
<p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><i><b><font size=2>(unaudited)</font></b></i><i></i></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><i><b><font size=2>(unaudited)</font></b></i><i></i></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Product manufacturing expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>1,491,554</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>951,667</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Process development expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>266,121</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>170,107</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Manufacturing and related process development expenses</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>1,757,675</font></b></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,121,774</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Our M&amp;P expenses increased to $1,757,675 in the fourth quarter of 2006 compared to $1,121,774 in the fourth quarter of 2005. In the fourth quarters of 2006, we increased our manufacturing activity compared to the fourth quarter of 2005 in order to supply our expanding clinical trial program. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Our process development costs were $266,121 in the fourth quarter of 2006 compared to $170,107 in the fourth quarter of 2005. In the fourth quarter of 2006, our process development activity focused on the scale up of our manufacturing process. In the fourth quarter of 2005, our process development activities related to the improvement of process yields. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Clinical Trial Program</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="533" style=' border-collapse:collapse'>
    <tr>
        <td width="377" valign=top style='border-bottom: solid black .25pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p>
<p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><i><b><font size=2>(unaudited)</font></b></i><i></i></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><i><b><font size=2>(unaudited)</font></b></i><i></i></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Direct clinical trial expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>595,072</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>665,582</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Other clinical trial expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>210,792</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>59,800</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Clinical trial expenses</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>805,864</font></b></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>725,382</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Our clinical trial expenses for the fourth quarter of 2006 were $805,864 compared to $725,382 for the fourth quarter of 2005. In the fourth quarter of 2006, we were actively enrolling patients in three clinical trials which included our U.K. Phase II combination REOLYSIN<sup>&reg;</sup>/radiation trial, the Phase Ib portion of our U.K. Phase Ia/Ib combination REOLYSIN<sup>&reg;</sup>/radiation trial and our U.S. Phase I/II recurrent malignant glioma trial. As well, we incurred activity associated with new clinical trial applications and clinical trial site selection. In the fourth quarter of 2005, we were actively enrolling patients in three clinical trials in the U.S. and the U.K. and incurred clinical trial site closure costs associated with the Canadian malignant glioma trial. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Pre-Clinical Trial Expenses and Research Collaborations</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="533" style=' border-collapse:collapse'>
    <tr>
        <td width="377" valign=top style='border-bottom: solid black .25pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p>
<p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><i><b><font size=2>(unaudited)</font></b></i><i></i></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><i><b><font size=2>(unaudited)</font></b></i><i></i></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Research collaboration expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>430,493</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>224,673</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Pre-clinical trial expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:22.5pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>5,565</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>37,342</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Pre-clinical trial expenses and research collaborations</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>436,058</font></b></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>262,015</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Our pre-clinical trial expenses and research collaborations were $436,058 in the fourth quarter of 2006 compared to $262,015 in the fourth quarter of 2005. In the fourth quarter of 2006 and 2005, our research collaboration activity continued to focus on the interaction of the immune system and the reovirus and the use of the reovirus as a co-therapy with chemotherapeutics and radiation. In the fourth quarter of 2006, we increased the number of collaborations we entered into compared to the fourth quarter of 2005. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Other Research and Development Expenses</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="533" style=' border-collapse:collapse'>
    <tr>
        <td width="377" valign=top style='border-bottom: solid black .25pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p>
<p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><i><b><font size=2>(unaudited)</font></b></i><i></i></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><i><b><font size=2>(unaudited)</font></b></i><i></i></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>R&amp;D consulting fees</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>187,009</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>124,936</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>R&amp;D salaries and benefits</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>641,303</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>455,771</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Other R&amp;D expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>125,093</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>120,065</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Other research and development expenses</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>953,405</font></b></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>700,772</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Our other research and development expenses were $953,405 in the fourth quarter of 2006 compared to $700,772 for the fourth quarter of 2005. The increase mainly related to additional regulatory consulting and an increase in annual bonuses paid to officers in the fourth quarter of 2006 compared to the fourth quarter of 2005. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Operating Expenses</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="533" style=' border-collapse:collapse'>
    <tr>
        <td width="377" valign=top style='border-bottom: solid black .25pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p>
<p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><i><b><font size=2>(unaudited)</font></b></i><i></i></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><i><b><font size=2>(unaudited)</font></b></i><i></i></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Public company related expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>487,338</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>672,010</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Office expenses</font></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>353,159</font></b></p> </td>
        <td width="78" valign=top style='padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>301,460</font></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Operating expenses</font></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>840,497</font></b></p> </td>
        <td width="78" valign=top style='border-top:solid black .25pt; border-left:none;border-bottom:solid black 2.25pt;border-right:none; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>973,470</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Our operating expenses in the fourth quarter of 2006 were $840,497 compared to $973,470 in the fourth quarter of 2005. The decline in operating expenses corresponds to a reduction in professional and investor relations fees. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Stock Based Compensation</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="533" style=' border-collapse:collapse'>
    <tr>
        <td width="377" valign=top style='border-bottom: solid black .5pt;padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p>
<p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2006</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><i><b><font size=2>(unaudited)</font></b></i><i></i></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>2005</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><b><font size=2>$</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><i><b><font size=2>(unaudited)</font></b></i><i></i></p> </td> </tr>
    <tr>
        <td width="377" valign=top style='border-bottom: solid black 2.25pt;padding: 0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:9.0pt;text-indent:-9.0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=2>Stock based compensation</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>109,670</font></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black 2.25pt; padding:0in 4.0pt 0in 4.0pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>38,152</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
Our non-cash stock based compensation recorded in the fourth quarter of 2006 was
$109,670  compared  to $38,152 in the fourth  quarter of 2005.  The stock  based
compensation  expense in the fourth  quarter of 2006  related to the granting of
options  to  directors  and  employees  and the  vesting of  previously  granted
options. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In the fourth quarter of 2005, stock based compensation expense related to the vesting of previously granted options. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>FINANCING ACTIVITIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In 2006 we issued 284,000 common shares for cash proceeds of $241,400 relating to the exercise of stock options. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>LIQUIDITY AND CAPITAL RESOURCES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Liquidity</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>As at December 31, 2006, we had cash and cash equivalents (including short-term investments) and working capital positions of $27,613,748 and $25,719,870, respectively, compared to $40,406,167 and $39,301,444, respectively, for 2005. The decrease in 2006 reflects the cash usage from operating activities and the expenditures on intellectual property of $12,155,372 and $842,610, respectively with cash inflows of $241,400 from the exercise of stock options. This is in line with our 2006 estimate of cash usage of less than $1,200,000 per month. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In February 2007, we increased our cash resources through the sale of 4,000,000 units for net proceeds of approximately $10,590,000. Each unit consisted of one of our common shares and one half of one common share purchase warrant with an exercise price of $3.50 expiring on February 22, 2010. As part of the transaction, we granted an over-allotment option of 600,000 units to the underwriter that, if not exercised, expires on March 24, 2007. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We desire to maintain adequate cash and short-term investment reserves to support our planned activities which include our clinical trial program, product manufacturing, administrative costs, and our intellectual property expansion and protection. In 2007, we are expecting to expand our clinical trial program to include additional co-therapy clinical trials and Phase II clinical trials. We are also expecting to continue with our collaborative studies pursuing support for our future clinical trial program. Therefore, we will also need to ensure that we have enough REOLYSIN<sup>&reg;</sup> to supply our expanding clinical trial and collaborative programs. We presently estimate the cash usage in 2007 to increase to $1,400,000 per month and we believe our existing capital resources (subsequent to the recent financing activity) are adequate to fund our current plans for research and development activities well
into 2009. Factors that will affect our anticipated monthly burn rate include, but are not limited to, the number of manufacturing runs required to supply our clinical trial program and the cost of each run, the number of clinical trials ultimately approved, the timing of patient enrollment in the approved clinical trials, the actual costs incurred to support each clinical trial, the number of treatments each patient will receive, the timing of the NCI&#146;s R&amp;D activity, and the level of pre-clinical activity undertaken. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In the event that we choose to seek additional capital, we will look to fund additional capital requirements primarily through the issue of additional equity. We recognize the challenges and uncertainty inherent in the capital markets and the potential difficulties we might face in raising additional capital. Market prices and market demand for securities in biotechnology companies are volatile and there are no assurances that we will have the ability to raise funds when required. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Capital Expenditures</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>We spent $842,610 on intellectual property in 2006 compared to $1,033,035 in 2005. The change in intellectual property expenditures reflects the timing of filing costs associated with our expanded patent base. As well, we have benefited from fluctuations in the Canadian dollar as our patent costs are typically incurred in U.S. currency. During 2006, four U.S. patents and one Canadian patent were issued. At the end of 2006, we exited with a total of 17 U.S., five Canadian and three European patents. We also have other patent applications filed in the U.S., Europe and Canada and other jurisdictions.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
<b><font size=2>Contractual Obligations</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>We have the following contractual obligations as at December 31, 2006:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="619" style=' border-collapse:collapse'>
    <tr>
        <td width="171" valign=top style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><b><font size=2>Contractual Obligations</font></b></p> </td>
        <td  colspan="5" valign=top style=' border-top:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><b><font size=2>Payments Due by Period</font></b></p> </td> </tr>
    <tr>
        <td width="171" valign=top style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="75" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><b><font size=2>Total</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><b><font size=2>$</font></b></p> </td>
        <td width="109" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><b><font size=2>Less than 1 year</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><b><font size=2>$</font></b></p> </td>
        <td width="88" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><b><font size=2>1 -3 years</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><b><font size=2>$</font></b></p> </td>
        <td width="82" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><b><font size=2>4 &#150; 5 years</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><b><font size=2>$</font></b></p> </td>
        <td width="94" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><b><font size=2>After 5 years</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0in'><b><font size=2>$</font></b></p> </td> </tr>
    <tr>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Long term debt <sup>(1)</sup></font></p> </td>
        <td width="75" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>150,000</font></p> </td>
        <td width="109" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="88" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="82" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="94" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>150,000</font></p> </td> </tr>
    <tr>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Capital lease obligations</font></p> </td>
        <td width="75" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Nil</font></p> </td>
        <td width="109" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="88" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="82" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="94" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Operating leases <sup>(2)</sup></font></p> </td>
        <td width="75" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>394,983</font></p> </td>
        <td width="109" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>89,430</font></p> </td>
        <td width="88" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>178,860</font></p> </td>
        <td width="82" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>126,693</font></p> </td>
        <td width="94" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="171" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Purchase obligations</font></p> </td>
        <td width="75" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>650,000</font></p> </td>
        <td width="109" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>650,000</font></p> </td>
        <td width="88" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="82" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="94" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="171" valign=top style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Other long term obligations</font></p> </td>
        <td width="75" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:33.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Nil</font></p> </td>
        <td width="109" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="88" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="82" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="94" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr>
        <td width="171" valign=top style='border-bottom: solid black 2.25pt;padding: 0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Total contractual obligations</font></p> </td>
        <td width="75" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>1,194,983</font></p> </td>
        <td width="109" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>739,430</font></p> </td>
        <td width="88" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>178,860</font></p> </td>
        <td width="82" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>126,693</font></p> </td>
        <td width="94" valign=top style='border-bottom:solid black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>150,000</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=1>Note:</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="16" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>(1)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>Our long term debt is a $150,000 loan from the Alberta Heritage Foundation. Repayments are required upon the realization of sales (see note 6 of the Company&#146;s audited 2006 financial statements).</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="16" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>(2)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>Our operating leases are comprised of our office lease and exclude our portion of operating costs.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>We intend to fund our capital expenditure requirements and commitments with existing working capital.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Investing Activities</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Under our Investment Policy, we are permitted to invest in short-term instruments with a rating no less than R-1 (DBRS) with terms less than two years. As of December 31, 2006, we had $24,122,237 invested under this policy, currently earning interest at an effective rate of 4.0%. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>OFF-BALANCE SHEET ARRANGEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>As at December 31, 2006, we have not entered into any off-balance sheet arrangements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>TRANSACTIONS WITH RELATED PARTIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>In 2006 and 2005, we did not enter into any related party transactions. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>We do not use financial derivatives or &#147;other financial instruments&#148;. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>RISK FACTORS AFFECTING FUTURE PERFORMANCE</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>All of our potential products, including REOLYSIN</font></b><font size=2><sup>&reg;</sup></font><b><font size=2>, are in the research and development stage and will require further development and testing before they can be marketed commercially.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>
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>&reg;</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, or early
studies in humans,  whether  REOLYSIN<sup>&reg;</sup>  will prove to be safe and
effective in humans.  REOLYSIN<sup>&reg;</sup>  will require additional research
and development, including extensive clinical testing, before we will be able to
obtain the  approval  of the United  States  Food and Drug  Administration  (the
&#147;FDA&#148;)  or from similar  regulatory  authorities in other countries to
market REOLYSIN<sup>&reg;</sup> commercially. There can be no assurance that the
research   and   development   programs   conducted   by  us  will   result   in
REOLYSIN<sup>&reg;</sup>  or any other  products  becoming  commercially  viable
products, </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>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. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>To achieve profitable operations Oncolytics Biotech Inc., 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 favorable results. If we are unable to establish that REOLYSIN<sup>&reg;</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.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>There are inherent risks in pharmaceutical research and development.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Pharmaceutical research and development is highly speculative and involves a high and significant degree of risk. The marketability of any product developed by us will be affected by numerous factors beyond our control, including:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the discovery of unexpected toxicities or lack of sufficient efficacy of products which make them unattractive or unsuitable for human use;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>preliminary results as seen in animal and/or limited human testing may not be substantiated in larger controlled clinical trials;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>manufacturing costs or other factors may make manufacturing of products impractical and non-competitive;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>proprietary rights of third parties or competing products or technologies may preclude commercialization;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>requisite regulatory approvals for the commercial distribution of products may not be obtained; and</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>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.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Our product under development has 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.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Pharmaceutical products are subject to intense regulatory approval processes.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
The FDA in the United States and other relevant regulatory  authorities may deny
approval of a new drug  application  (&#147;NDA&#148;)  or its equivalent in the
relevant jurisdiction if required regulatory criteria are not  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>
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 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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The FDA and other governmental regulators have increased requirements for drug purity and have increased environmental burdens upon the pharmaceutical industry. Because pharmaceutical drug manufacturing is a highly regulated industry, requiring significant documentation and validation of manufacturing processes and quality control assurance prior to 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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>The pharmaceutical regulatory regime in Europe and other countries is, by and large, generally similar to that of Canada and the United States. We could face similar risks in these other jurisdictions, as the risks described above.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Our operations and products may be subject to other government manufacturing and testing regulations.</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>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. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The products anticipated to be manufactured by us will have to comply with the FDA&#146;s current Good Manufacturing Practices (&#147;cGMP&#148;) 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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The FDA or other regulatory agencies may also require the submission of any lot of a particular product for inspection. If the lot product fails to meet the FDA requirements, then the FDA could take any of the following actions: (i) restrict the release of the product; (ii) suspend manufacturing of the specific lot of the product; (iii) order a recall of the lot of the product; or (iv) order a seizure of the lot of the product.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>Our products may fail or cause harm, subjecting us to product liability claims, which are uninsured.</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>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. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Our technologies may become obsolete.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>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 the respective niche markets effectively or adapting our businesses to evolving customer or medical requirements or preferences or emerging industry standards.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>We have no operating revenues and a history of losses.</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>To date, we have not generated sufficient revenues to offset our research and development costs and accordingly have not generated positive cash flow or made an operating profit. As of December 31, 2006, we had an accumulated deficit of $65.0 million and we incurred net losses of $14.3 million, $12.8 million, and $13.0 million, for the years ended December 31, 2006, 2005, and 2004, respectively. 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 and profitable 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. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><b><font size=2>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></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>
As of December 31, 2006, we had cash and cash equivalents  (including short-term
investments)  of $27.6  million  and  working  capital  of  approximately  $25.7
million.  On  February  22,  2007 we  received  net  proceeds  of  approximately
$10,590,000  from for the  issuance of  4,000,000  units at a price of $3.00 per
unit.  Each unit  consisted of one common share and one half of one common share
purchase warrant (see &#150; </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><i><font size=2>&#147;Recent 2007 Progress&#148;</font></i><font size=2>). 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 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.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><b><font size=2>The cost of director and officer liability insurance may continue to increase substantially or may not be available to us and may affect our ability to retain quality directors and officers.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>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. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>We incur some of our expenses in foreign currencies and therefore are exposed to foreign currency exchange rate fluctuations. </font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We incur some of our manufacturing, clinical, collaborative and consulting expenses in foreign currencies, primarily the U.S. dollar and the Great British pound (&#147;GBP&#148;). Over the past few years the Canadian dollar has appreciated relative to the U.S. dollar and the GBP thereby decreasing the Canadian dollar equivalent. However, if this trend reverses, our Canadian dollar equivalent costs will increase. Also, as we expand to other foreign jurisdictions there may be an increase in our foreign exchange exposure.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>We earn interest income on our excess cash reserves and are exposed to changes in interest rates.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We invest our excess cash reserves in investment vehicles that provide a rate of return with little risk to principle. As interest rates change the amount of interest income we earn will be directly impacted.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>OTHER MD&amp;A REQUIREMENTS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We have 40,520,748 common shares outstanding at March 2, 2007. If all of our warrants (4,672,000) and options (3,637,950) were exercised we would have 48,830,698 common shares outstanding.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Our 2006 Annual Information Form is available on www.sedar.com.</font></p>

<p style=' margin-bottom:5pt; margin-top:5pt;text-align:justify;'><b><font size=2>Disclosure Controls and Procedures</font></b><font size=2> </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Evaluation of Disclosure Controls and Procedures</font></i><font size=2>:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Our chief executive and financial officers reviewed and evaluated our disclosure controls and procedures. Based on that evaluation, they have concluded that our disclosure controls and procedures are effective in providing them with timely material information relating to the Company. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>


<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>
<i><font size=2>Management&#146;s Annual Report on Internal Control Over Financial Reporting</font></i><font size=2>:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Our management is responsible for establishing and maintaining adequate internal control over financial reporting, and has designed such internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of financial statements for external purposes in accordance with Canadian generally accepted accounting principles (GAAP), including a reconciliation to U.S. GAAP. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our internal controls and procedures over financial reporting will prevent all error and all fraud. A control system can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Oncolytics Biotech Inc. have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based
in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Management has evaluated the design and operation of our internal control over financial reporting as of December 31, 2006, and has concluded that such internal control over financial reporting is effective as of December 31, 2006. There are no material weaknesses that have been identified by management in this regard. This assessment was based on criteria for effective internal control over financial reporting described in Internal Control &#150; Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As this report is required for U.S. reporting purposes, and we are a &#147;foreign private issuer&#148; as defined in Rule 3b-4 of the U.S. Securities and Exchange Act of 1934, as amended, and we are not a &#147;large accelerated filer&#148;, our auditors have not attested to management&#146;s evaluation of internal controls over financial reporting for the year
ended December 31, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><i><font size=2>Changes in Internal Controls over Financial Reporting</font></i><font size=2>: </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>There were no changes in our internal control over financial reporting that occurred during the last fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>






<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 1; page: 1" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>

<BR><BR>




</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.A
<SEQUENCE>10
<FILENAME>ex_99a.htm
<DESCRIPTION>SECTION 302 CERTIFICATION - CEO
<TEXT>
<HTML>
<HEAD>
<TITLE> </TITLE>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>




<!-- MARKER FORMAT-SHEET="Para Right" FSL="Default" -->
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EXHIBIT 99.A</B> </FONT></P>
<BR><BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>CERTIFICATE AS REQUIRED BY RULE 13A-14(A) UNDER THE EXCHANGE ACT</font></B></p>

<p style=' margin-bottom:8.35pt; margin-top:0pt;text-align:justify;'><font size=2>I, Brad Thompson, certify that:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>1. I have reviewed this annual report on Form 40-F of Oncolytics Biotech Inc.; </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report; </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>4. The issuer&#146;s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have: </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;line-height: 14.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; </font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;line-height: 14.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;line-height: 14.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Evaluated the effectiveness of the issuer&#146;s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and </font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;line-height: 14.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Disclosed in this report any change in the issuer&#146;s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer&#146;s internal control over financial reporting; and</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>5. The issuer&#146;s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer&#146;s auditors and the audit committee of the issuer&#146;s board of directors (or persons performing the equivalent functions): </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;line-height: 14.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer&#146;s ability to record, process, summarize and report financial information; and</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;line-height: 14.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer&#146;s internal control over financial reporting.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Date: March 2, 2007</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><i><font size=2>/s/ Brad Thompson</font></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Brad Thompson, PhD</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Chief Executive Officer</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>



</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.B
<SEQUENCE>11
<FILENAME>ex_99b.htm
<DESCRIPTION>SECTION 302 CERTIFICATION - CFO
<TEXT>
<HTML>
<HEAD>
<TITLE> </TITLE>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>




<!-- MARKER FORMAT-SHEET="Para Right" FSL="Default" -->
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EXHIBIT 99.B</B> </FONT></P>
<BR><BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>CERTIFICATE AS REQUIRED BY RULE 13A-14(A) UNDER THE EXCHANGE ACT</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:8.35pt; margin-top:0pt;text-align:justify;'><font size=2>I, Doug Ball, certify that:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>1. I have reviewed this annual report on Form 40-F of Oncolytics Biotech Inc.; </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report; </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>4. The issuer&#146;s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have: </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;line-height: 14.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; </font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;line-height: 14.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;line-height: 14.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Evaluated the effectiveness of the issuer&#146;s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and </font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;line-height: 14.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Disclosed in this report any change in the issuer&#146;s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer&#146;s internal control over financial reporting; and</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>5. The issuer&#146;s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer&#146;s auditors and the audit committee of the issuer&#146;s board of directors (or persons performing the equivalent functions): </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;line-height: 14.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer&#146;s ability to record, process, summarize and report financial information; and</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;line-height: 14.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer&#146;s internal control over financial reporting.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Date: March 2, 2007</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><i><font size=2>/s/ Doug Ball</font></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Doug Ball, CA</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Chief Financial Officer</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>



</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.C
<SEQUENCE>12
<FILENAME>ex_99c.htm
<DESCRIPTION>SECTION 906 CERTIFICATION - CEO
<TEXT>
<HTML>
<HEAD>
<TITLE> </TITLE>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>




<!-- MARKER FORMAT-SHEET="Para Right" FSL="Default" -->
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EXHIBIT 99.C</B> </FONT></P>
<BR><BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>CERTIFICATION PURSUANT TO 18 U.S.C. &sect;1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>In connection with the Annual Report of Oncolytics Biotech Inc. (the &#147;Company&#148;) on Form 40-F for the year ended December 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the &#147;Report&#148;), I, Brad Thompson, the President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. &sect;1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt;line-height:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt;line-height:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Date:  March 2, 2007</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>/s/ Brad Thompson</font></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Brad Thompson, PhD</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Chief Executive Officer</font></p>

<p style=' margin-bottom:5pt; margin-top:5pt;text-align:left;'><font size=2>This certification accompanies the annual report pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the issuer for purposes of Section&nbsp;18 of the Securities Exchange Act of 1934. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>



</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.D
<SEQUENCE>13
<FILENAME>ex_99d.htm
<DESCRIPTION>SECTION 906 CERTIFICATION - CFO
<TEXT>
<HTML>
<HEAD>
<TITLE> </TITLE>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>




<!-- MARKER FORMAT-SHEET="Para Right" FSL="Default" -->
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EXHIBIT 99.D</B> </FONT></P>
<BR><BR>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>CERTIFICATION PURSUANT TO 18 U.S.C. &sect;1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>In connection with the Annual Report of Oncolytics Biotech Inc. (the &#147;Company&#148;) on Form 40-F for the year ended December 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the &#147;Report&#148;), I, Doug Ball, the Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. &sect;1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt;line-height:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt;line-height:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Date:  March 2, 2007</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>/s/ Doug Ball</font></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Doug Ball, CA</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Chief Financial Officer</font></p>

<p style=' margin-bottom:5pt; margin-top:5pt;text-align:left;'><font size=2>This certification accompanies the annual report pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the issuer for purposes of Section&nbsp;18 of the Securities Exchange Act of 1934. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>



</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.E
<SEQUENCE>14
<FILENAME>ex99_e.htm
<DESCRIPTION>CONSENT
<TEXT>
<HTML>
<HEAD>
<TITLE></TITLE>
</HEAD>
<BODY>

<!-- MARKER FORMAT-SHEET="Para Right" FSL="Default" -->
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>EXHIBIT 99.3</B> </FONT> </P><BR><BR>


<IMG SRC="auditorsconsent.jpg">













<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 1; page: 1" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>15
<FILENAME>auditorsconsent.jpg
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 auditorsconsent.jpg
M_]C_X``02D9)1@`!`@$"*0(I``#_P``1"`-2`E@#`2(``A$!`Q$!_]L`A``%
M`P,$`P,%!`0$!04%!@<-"`<'!P<0"PP)#1,0%!,2$!(2%1<>&146'!82$AHC
M&AP?("$B(109)2<D("<>(2$@`04%!0<&!P\("`\@%1(5%2`@("`@("`@("`@
M("`@("`@("`@("`@("`@("`@("`@("`@("`@("`@("`@("`@("#_Q`&B```!
M!0$!`0$!`0```````````0(#!`4&!P@)"@L0``(!`P,"!`,%!00$```!?0$"
M`P`$$042(3%!!A-180<B<10R@9&A""-"L<$54M'P)#-B<H()"A87&!D:)28G
M*"DJ-#4V-S@Y.D-$149'2$E*4U155E=865IC9&5F9VAI:G-T=79W>'EZ@X2%
MAH>(B8J2DY25EI>8F9JBHZ2EIJ>HJ:JRL[2UMK>XN;K"P\3%QL?(R<K2T]35
MUM?8V=KAXN/DY>;GZ.GJ\?+S]/7V]_CY^@$``P$!`0$!`0$!`0````````$"
M`P0%!@<("0H+$0`"`0($!`,$!P4$!``!`G<``0(#$00%(3$&$D%1!V%Q$R(R
M@0@40I&AL<$)(S-2\!5B<M$*%B0TX27Q%Q@9&B8G*"DJ-38W.#DZ0T1%1D=(
M24I35%565UA96F-D969G:&EJ<W1U=G=X>7J"@X2%AH>(B8J2DY25EI>8F9JB
MHZ2EIJ>HJ:JRL[2UMK>XN;K"P\3%QL?(R<K2T]35UM?8V=KBX^3EYN?HZ>KR
M\_3U]O?X^?K_V@`,`P$``A$#$0`_`/LNBBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`Y?XL^.?^%:
M?#;7O%@MQ<OIEF\T<1Z._1`?;<1GVS7+?#[P_P"*?$7PZT'Q+<^-=4_M[4[>
MVU&Y8%/LVQ]LC0+%MVJNPE`P^?ONKT'Q)X>T[Q;H%_H6KVXN+"_MWM[B(\;D
M88//8^_:N8\"_#K6O!&B:=X<C\6R7>B:8%CM5>R5;KRD/R1/+NVLH`"\1J2!
MUH`\Y^'OBWQ-\8_!?CWQF=?U#29K'4+NST&"U<)':)!&"C.F,2LS'Y@X(P,`
M"N9O/BW\2O%WPW\#?%+PG,_VFWTZZOM=T1!^ZU&.WGCADV`YVG#.XQV]2!GU
MF/X('1K;Q5IGAC7WT?2?%$\ES?6WV02O!+*H25[=]P";@!PRN`>0`.*W?"OP
MUL_!,VB6NARQ6VC:/IDFGP69A+.P=D8N9-W7,8)^7G+>O`!Y9J?Q8U/7?AIJ
MOCWP'_;.O:4^NVK75M:S$W,%C]GA>XCB'.UQ([`XY`+8(`!&!\0OC.=0_9VU
MKQMX`\:ZM*T6M6\=L9OEN=/1O*1[>08^;G>06W'YA\QQFO7M$^"EEX.M9K?P
MEJ<NBQ/X@DUQ(DA5XE9X/*>$J2,QDDM@$$=`1@$8GC7]FZS\:>%O$.DR:Q%8
M77B/4X=1U&ZMK'"EH@@14CW_`"CY`226)+,>XP`,N(M4U7X?>)-9T+Q7XBM%
MNF%GIYO2PFL9X;F6%Y`KJK8;Y3L?^[VS7,?#7XD>)?%NH6OPZ\5ZG=:5X\T*
MYGL[\Q2%4OH?LTK0W048##<(V..^.@;%>H:AX"\0:LMX+OQ-9*)HD2&*#2RD
M41\T2.Y4RDLS%5&2V!C@<FKNH?#/1]0^(>C^/&01:UIMK+:-+&N!/$X^ZW^Z
MW(],D=^`#RK3H?$VH_'[Q+X`B\<>(H[&Q\-P7EG(UPK,EPS`%V^7#`]UZ>F*
MZ;X]_$#6O#_B'P'X,T*Z;3YO%>K_`&:XOD4%X+>/:9`F00'8,`&(..>^"-_2
M_A4^F_&35/B-_;`D?4=.33WLOLN`B(05(??UR.>,?2KOQ(^&6G?$6#2I9KB6
MQU/1;]-0TN^B4,T$RGNIX9&'#*>H[@@$`'#7'BS5?!W[0MA\.6U&^OM!\0Z'
M)=P">=GFLIXR^XK*?G*,J]"3ANA`XKE?V6_&NM_$OPQX:NM3\4>))]=59[Z^
M:966UN(4N#$(QE`K?*<Y0\%1GKBO5['X6'_A.KGQWJVIQ7_B$Z<-.LG6U,=O
M90Y+'9'O)+,Q)+%\XX&!U/@K\)H/@YX%L/"L6HC4X[`S>1<O;B.0+)(9&4_,
M1]X]L=!0!R_Q"\1:S8_M*?#GP[:ZK>P:3J]I?R7UI'*529HHBT9]1@^F,]\U
MYYJ'Q4\8?#+6O$>A^,=<O)]`\0KJ!\+:QOVO87,#RHMLS]\[$P3G)(ZY;'M/
MBCX52>(_BKX8\>KK"V\OAZ&XAAM#:[UE$R;'+-O';I@?G47B7X,:=XW^'%WX
M.\2W,=Z)KJ6\ANHK?RVMYGE:574%FY4N1UY7(/4T`<=JEWKM_P#M.R^`[;Q1
MK-AI#>"O[1C6&XW-'<BY\H2Y8'/R_P`)RI[BO/;WX[^+_$GP=\%:W/JUW8:N
MOCV'PWK$^GJ5^V0X<N5C4'E@$^Z,Y!QC.*]MUCX0:C>?%F;XB:=XGCL+Z30S
MHJQ'3_-$<1D\S>"9!\X;H2"OJIK%U3]F/2/^$'\*^$M`U>73+7P[K46MI--!
M]HENKE"QW2'<HP2YS@#H`,`4`<Q\8?$^O^%OV</$'CGP[XGUV.2:>VN-,>[D
M/GVB-/'$R$%1P5R=K`D%CZ"JWCCQ9\0M#\+?%?4;*^URV\/:7:03>';^_A:"
MX6?`\Y4WJK/&"3RX/L37?_$/X(ZE\3/!NO>&M8\5Q10:N]O_`,>NF[$MEBE\
MW"*9#EF<Y9B3Z8Z5TWQ+\!R_$GX=ZEX1N=32S_M*W$$]S';[L#()*J6XZ=R<
M>]`'GG@S5-2U_P"'6K^)+;Q)XCW6FA/#/'>,R'[7]EAN%GC#*&4`NP[JPP0"
M.N#X"^(_BBQ\4P?";X@ZO=_\)/8:G%/8ZC&_DC6;!RQSA>"1T('/'JK&O2;;
MX6:W'H*:)-XIMC91:.^FQI#I?E[G,:Q">0^:=S+&I``VCYO85J>(/A?I?BC6
M_"WB#42AUKPY.9K>[BCV[PR%'0C)^4Y!QDX('OD`\2;QEXU%A\:M6L/%FI17
M/@S4FDTJ.5EEA$*(9&A=&!W*0",_>'&#4?B;XVZE?^+O`6LOJ&N6&BZWX/FU
M>^T[3F=B9EC++MV@E0#QNX&.3W->@-^S@]P/&EI<^*Y1IWC*^%UJD5O9".4+
MWBCD+L%4C@DJ3C.,5IZK\"XI?'7AWQ+HVJ6FGP>'])?2;/3I;`S0F%EVD-^\
M4G`P!TZ<YH`YKXO:?\3/"ND:(?!/B6^U'5]*BO-1GM[C#_VK!%-&1"X``W^7
M*1E0"=N.XQI?#7Q5;?'>TF\1Z!XDUBQTYYK>6:VAN</"?)<26_?;^\*DD=0H
MQ@&NST3P7K&GZMI^IW_B*/4)X$NEN2UEL\[SI$8!</A`BQQJ!SD`Y.33O!OP
MSTGP!?>)+KP^JVJZ[>_;Y(2F8XIB@5BH!'!(W$<<DXQV`/./V6;_`,2^./!M
MMXIUKQ7JM[/#JE[:SP32!HIHE)5!MQPRG!R/?.>V_P#M'_$O7?AKX/BU+PW:
M?:KJUGCO[]`!E;&*6/S\>YWJO^Z6/\-;?P7^%8^#WA*3P['JQU.)KR6Z65K?
MRF!D;<P(W'(STZ5)KWPJTWQ;J>L7?B.#2M72]M%M+2.ZTX.;-`&SM8MSDN22
M-IZ<\#`!Q7Q[\<7]K!\+]2\+ZW<V]GX@\56%G.]M(0MS:39)'MD8Y&"/6KGQ
MLU;5?#?ASXA:EI6KZA:W&F^&K>\LMEPVV"8O<`N!TY$29!R./<Y2#]G!1\+?
M#?@RY\57-Q<^%]2AU'1=3-JH>%XF+1JZ;B'4!BN,CC'IFND\5_"ZZ\9^#O$.
MC:IKD?V[7[1;*YNX;,JD4*AL+'&7)&"[G+,W+'M@``\TTSXC^)?!_B/X01W>
MLWFJZ7X[TI8]0@N2&:&Y\B-Q-&X`8;FDP5S@`<`5?^`T_B+XDZ/XF?5?%FM+
M_9/C:]LT:.XVNUK%&%CASC@!I`Q/WCM`)KK/#WP,M[#6/"VK:UJ[:M<>$]-_
ML_1(Q;"&&#,:QM,R[F+R%549W`#'`!YJ]\*?A3-\+--\06EOK27S:SJ\^K;Y
M+38(990NY<!SE1M&!D'KS0!XW\,_B9XKTW]F-_C!JGB'4M7U*SMKU)+2Y<-!
M,_G&.%BH`QM(7.,9!;V(UO''C?Q5\*O@EX1^)[>(+_4]1EDLYM;MYV#07<4Z
M@O&D>-L94L-A0#ISNS7H?PX^!6E^!_A%-\,]1O/[;TB99XW,D'E,R2LS,#AC
MR"QP1C'%56^`B:EX=\-^%-?\02:IX;\.SQ36MH;41RW'DC$*3R!B'51CA57=
M@9[Y`/*/'GQ9U3PWXS^+NF2>,-:LKO36TZ'PG;Q9E4W<UNS^3@JRL'<#A^@S
MC&*ZCXB_%CQ-\/+KPC?_`!#L=:L=`N]"C&IWVB<BPU0E=YE`SE`/N@Y4DM\K
MXXZ36OV:]+\4:C\0+C6]3%U!XS2V\V);78UE);H4ADC;<>1G)R.3Z`D5NZ5\
M-?$>G6<<-QXS75'.DQ:7="_TP2QW*QF0B5EW@^81)@G.TXY4]@#I?`U\NI^"
M]$O%U>/6?-L(6.H1@!;H[!F4```;CDXP,9K9K&\#^$-/\`>$=+\,:5YGV+3;
M9;>(R'+,`.I]R<GCCFMF@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`*
M***`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HH
MHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB
M@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`
M"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`*
M***`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HH
MHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB
M@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`
M"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`*
M***`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HH
MHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB
M@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHKC_^%LZ,
M+W[&UIJ*2+KG]A/NC0".X,8D7=\W",I!#=\CU%`'8453TS58]4%R8H98T@N'
MM]SXQ(5."5P3QG(YQR#Q5S@4`%%&1TS29'J*`%HHR/457NM1M+&2WCN+B.)[
MF7R8%9L&1]I;:/4[58_0&@"Q15<:C:'4#IXN(S=K$)FA!^8(20&([`D$#Z'T
MJ6>XAM+>2XGE2*&)2[N[`*J@9))[`"@!]%8VB>+]/U_5]1TRS6;?81P2-(P`
M2195+(5YST'.0*V00>AH`**JZ;?O?VS2RV=Q9%9I(Q'/MW$*Y4.-I(VL`&'.
M<,,@'@6LCIF@`HHR,9R,4`@]"*`"BC(]15>]U&TTV));NXC@1Y4A0NV-SNP5
M%'N6(`^M`%BBJNG7SWR3-)97%IY4[Q*)MO[P*<!UVD_*>HS@^H%6LCID4`%%
M95KXFM+KQ5J/AM8ITN["SM[R1V"['29IE3:<YR#`^00.W7-:N1ZB@`HHR/4<
M5B:IXOM]-URWT6&QO+^\D1)I$M@A\B)I!&)&W,/ER3]W)PK'''(!MT49'J*3
M(QU%`"T49''(HX[4`%%5=,OWU"U,TMG<63"62/RKC;N(5RH;Y21M8#<.<X(R
M`<@)J.KVFE^6D\JB:8/Y,(8;Y2JEB%!]@?:@"W16+IGBV'6O"&F^)=.T^]NH
M-1M[>YAMT""4)+M()!8*-H;)YZ`XSQG:!'0$4`%%9`\7Z0?&)\)"Y_XFPL/[
M0\G'_+'?LSG_`'L<>X]:U\CID4`%%)D=B*"P`.!D@=!WH`6BN4E^)^DP_#M?
M'+6M]_9IB$IC")YH!?9R-V.OO6EX=\76'B.[U.QACN+:]TJ=8+VVN$`>)F0.
MIR"5(*L"""1VZ@B@#9HI,CU%+D4`%%5XM1M)K^:PCN(VNH(TEEB#?,BN6"DC
MT)1L?[IK"UGXBZ9H\D$:VUY>>?J2Z7&ULJ%6N"K$IEF`XVD$]`>.H.`#I:*J
MZ7J!U*S$[VES9MO=##<!0X*L5_A)&#C(()R"*L[EZ9%`"T4`@]"*PM5\=:)H
MFMOI%]<F&:+3)M4FD*_NXH(F0.6;L?WBG'H#[9`-VBL?PSXML?%"W*VT5Q;S
MVI036]PH61`Z!T.`3P58=^H(.""!1TSX@P:Q<WL-EHFK2K97TEA/(%BVK*B[
MB/\`69P<J`<8RPSCG`!TU%5M+U2TUK3H-0L91+;3H'C;!''N#R#V(/(/%4?$
MGBBV\-)9H]M<7EU?3-!:6MOM\R9UB>4J-S*H^2)SR1TQWH`UZ*CM9C<VT4QB
MDB\Q`WER##+D="/45)0`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%
M%`!1110`4444`%%%%`!1110`5XY\4OA'X@\0>*-9U+0C&(+G3X=2M@7"D:Q:
M,1;'J,*R,H)_Z9+7L=<-=?%=(?#FJ^*X=,\[PYI5Q-%<70GQ*R0.8YY4CVX9
M$97_`(@2$)`/&0#"\?>!M>NH_#UJNEW.N::;*YM=5@L[F&&1;B8QL+D&7C`9
M9?F0B1?,RN>16I\2/#VKZA?:,/\`A'G\3:.;*XL;^S2[2%XY)/*\NX#.R_="
M2*64[U\S*@G(KJ[7QKX:O;]M/MM?TN:[579H([I&<!,;\@'^'(SZ9H/C3PX+
M"2_.NZ:+6.0Q/-]I7:K!=Q4G/!V_-_N\].:`/-M8^'WB?4C=A].W:E'J%_-_
M:*2QXO+2:WE6*VR6W?*SPKM8!1Y(;/`K,B^%_B.RTN\MK319[-GCT^:%8A:S
M127,=I)',9HG<"12=BMR&)VL#\N1Z5'\1=.B\7ZAHE]/8V=M!:V$UK=R7:A;
ME[J2=$C4'`W9@X`)W;ABGZS\1M"T[4+O1XM4TW^U8+":\\JXN1%$@CP#YC\[
M!D\\$@`G''(!Y?>_#GQAJ</B*UU+P]-+?R:=<_V?>6U]"+8^;9^4+;#$2G;)
M@`/\F%#Y#`"KL/PQU6S\3V5ZOA5&L+;Q';:AY2M!PATQK>60`MC(F*%NYV[A
MNP*]4B\5Z.'CMKG5=-BNV@\YX1=*<*%#,1G!(`(.<#@@U'JWBNTM/"FIZ_IS
MV^HQV%M+,5CF`#&-2Q0L`<'C'3B@#A?B%X(UV_\`&VI:QHVCI.;C2+*(3AXE
M,OD7;236[%B&'FPMY8.-O)R0!6C%X%O9?!/CG2H[!+>WUHSMIFFR%-MN'M40
MJ0"57=,LCX!P-^>"2*=9?%J6?S;:[TVPL+IO#HUVWDEU'_1EC.!MGD*`Q?,1
MSM(P&(SM(KJW\5:/;2QVUWJMA#=O'O\`)^T`DX3><="?E!;IT&<4`>2V/PUU
MX:M::I#X6-C+!=Z0T+&2WWP1Q1LESC:YQPQ!`/S`]ZZ7X)^%=;T""63Q#I-W
M9:JEI%97ES)=PR1:@\9;]^BQ\_-N)+2`2?-@YVYKJ]$^(?ACQ!I>E:C9:S9^
M3JT,<UFKRJKR!QE1M)SD],=<@BJ/B?XFZ3H4-M)9W>GWP.I6UE=XNU7[*LKE
M?,;&>!ANN`=IYX-`'ENN_"/Q/J6@ZE;)X<WW!TKQ+'9;IX/DN+G4!/8E3O\`
ME(4;@?X#Z&M_5/!_BW4)?$T$?AXQZL_VJ33==-\B+-!*%*VS!6WAAM6/YEVJ
M%#*V:]`\1^-K/2?A]J?C'3#;ZM:66G2W\?DS@).D:%R%<`CD*1G!YI]AXYT*
MYFL["?5],@U2Y5!]A%VK2!V3?L`X).W)Z#CG%`'G=]\++G6_%FG7,WAH1^')
MM8^TW.ERM"%MT.GS0NQ17*X>5XLJN>4W'K7,^&/`6LZSH?\`:_AC3#8W,8U2
MWNY3(B?VHO\`:09(,ALXV1RH&?&W?@<$X]ZTW7=*UF2>+3]1M+M[?`F6&57*
M9SC('3.#CZ'TJ"34/#_A1(;)[C3=+25_W4.Y(0S,V.!QR68#W+#N:`/-#\*[
MG4?&EC=7/AY1X=?59[LZ?*T6RT4V:)DH&(^:92^U,@'YN"37-67PR\4S&:>^
M\&2!'?1+J2S,]O(OG6]].]T$+2$N3%(AWR'<X!!(X4>MZ'XY;Q)XLU;2M-BL
MI;32+LV=[(;K]ZLGDQRAE0*05_>;#D@@J>M:8\9>'<RK_;NF`PO&DF;I!M9W
MV(#S_$_RCU/`YH`\S@\`:^NHW8U+PZ;_`$:YNM6!L1-#PT\D303@%\?=21<_
M>7?P,$U!H'PP\3Z7XET[4;ZP^V7MKK=G+-J8ECW2PKI0MYY!EMV&F&2N,G@X
M.*]/F\>>%K>>&"7Q'I"2SS-!$AO(PSR+(L3(!GEA(RH1U#$#K4E]XR\.:9JG
M]E7NO:9;7^S?]FEND23;M=MVTG.-L<ASZ(Q[4`>?_$+X:ZAXG\>:EJ,.DJ[7
M&G:7%INI[T!L)[>ZN))7Y8.#LF7&T'=\RG`/.E\,?#\5EKVM"PN;"[\/6E[+
M-I+6[AQ$]P%DGCXX^5]VTC^&4K_#72WGQ'\'Z=`D]YXIT6VB<.5:6]C0$(P1
M^I_A9@I]"0#5BVU?PUHLRZ-;7FEV4BAG6UCD2/'&]B%&.QW'V.:`/+M;^&^N
MP3ZSKMCX;-S=R>)C<O`DMN);_3S`J%%,A,?$N)`DF!F/L3FH]3^%WB"(7,F@
MZ&UO,GAF&UM'N+J)G\Q+AG-NTF203$?+W8*#.,D"O1]+^)_A#7=>M]$TGQ!I
M^H7=Q`\\8M9UD7:GEY&0<9Q*A`ZX.>E-\1_$"RT+Q1X?T"-[2XN-4OWM)D^T
M`26RBUFGWE<'(_=`<XQO!H`\\@^%>H:QJ6EW0\-W.EPBPU*11?7$$C6-Y)):
MO;OMB;:,/#(X$8(!.>"QJ+0?AKK%]'X=FU3P=<6S1:M$^KVUS=VTL<BI97$+
M2*J$*R,TD0Y&]@/F7Y17IDOQ,\)QRZ?''KMC.=0O/L5N89E<&7RC*`2#@?(-
MPSU#+C[PS>'B_0#'<NNM:>1:E1-BX4^66.%!Y[D$#U(('-`'E?@CP1XKTK_A
M';#7_"\EZL&EV$<%[]NCSI$\&\2!L/N8,"I&S<&^Z^%KH/@GX6UK0+663Q#I
M%W8ZHMI#9WD\EW#+%?O'N_?H(^?FW$EI`)#N`.=H-7U^*Q;X.ZG\0UTR*5;"
MUO+K[+'=965+=Y!\LFW^(1Y!QWK<@\5BRAGN/$!TS2[:,)LF%^'4L5+,IW*N
MTA0&[\'/8T`>/:I\)/%%[I&H1#PWON!I^LK8YG@_=SS:F;BU*G?\K"/Y@W&W
MID'BO1OB#X8N]6\5>%=7MM$&H)8-=)-@Q!X?,A(1OG8<!@.A)S@X[BWI'Q1T
M:^\6:OX=O+[3;*YM+E(;)6O5WWJM;1SEU4XZ!SP,\*3GTO6OQ*\&7L$\]MXL
MT*6&W@:XF=+^(K'$JHS.QW<*!)&2>@#KZB@#R;1?A1XFTGPFVFP^'O)D;1O#
MD<D<<\(#W5K.QNF/SX+"/RQN/W@H`)Q7>>`?#FM:'XQ\07-Q9LNF7;-+#+<K
M%]HWF:1B@>-COBPVY=X#*&VY/;J+CQAX>L[NYM+C7--AGM(FFN(Y+E%,2*%+
M,P)X"AT))Z!E)ZBHM-\>^%=8%T=/\2:1=_9(S+<^3>1OY*!BI9\'Y1E6&3QE
M3Z4`<+JO@WQ-_;NA^-[2RNI=7AUJ1[O3S)`NVRE7R77=N`.V-('P&.6C]ZY7
MQ!\)/$]QI6NI8>'`MYJ%AXEM@ZSP*9/M,X>R!._IU(_N'.<9KU;Q_P",-6\&
MZ>^J67AX:I86<1N-0?[6(GCB'7REVMYC@`G:2@P!@DG%6%\2:JGC2+1)]$1-
M/N+:6:"]2[W.#&4!$D>T!0=_RD,Q..0M`'G_`/P@.N:7XN;4;+PVQTR/Q2;Z
M.VBEA7-O)I'V:1@I<`#[026!Y/+88UC>$/`'C+2[_P`"27OAFXAFT2#3H+NY
MCNX'W(EA+#*&)DR-LKCY4`4CYCN)POL_B.^U>PT\/H>E0ZE>LX5(I[K[/&!@
MDEG"N0.,<*>2.@R1Q3?'"V32K?4'T::)(M+BU35$DF`:RA>4Q9&`1)@I*>H!
M6/(Z@4`9U]X&\12_LXGPDNDR-K)M1$;59XP0?.#??W[>G/WJHWO@;QEH6DZ_
MI>FZ9-JL<FLPZM%=-=0BXU&`LIDM96D)S)&%VJSC8R*BDC!KKK;XJK?:H;.S
MTDS)<37UIITGV@`W-Q:';)&05P@++(`V3Q&2<<5K>#/$>M:[-JMOK6BV>F3Z
M?<+`1;7YN5<F-9.IC3&`Z]CUH`\<U3X>2:GK=QX=M/#]U#J!\-P2Z>\]Q$[Z
M3,U[</'*6#8!3(P(\@!2B\8SJ^*_AEXMUKPMK%I#IA.M&SUFW>[$T0&IK<+)
M]F3);(VEHC\^`GE$#C&?3K[7M&T;Q3<2:C<:!9%;.%6N9;I$N<O*RHC*0,(6
MP%.[EB0!Q5L>-?#9T^WU`:]IAM+EBD,XN4V2$-L8`YP<-\I]#Q0!RW@OP%#X
M3^)6LZA8^&X;'3K[2;18IXA$-LRRW#3*P#;MQ\U#G!!QUXKF[3PCK&H>%M`T
M86=Q<76D^-+BZU,QW`A=(C/<2"7)93\RS1N-O.&KO-"^(5A?WNL6FI2V6FR6
M&I2V4*R70S<+'#'*S@$#HKY(&<`9S47B7XC:3H=QHBV,VGWT^L7EM;($NE#>
M3*3ME7`.X=2.@/)!X-`'-^-_AYK%])J&FZ?;37=I-X?BL=%NY)U9]*O(WD(G
M9G;?D[X6++ECY'/49S#\)KJ:^:^N/#$4MS+XP:ZGE=X29+##8S\W*9;[G7D_
M+R:]/'B_0&CN776M/*VI43$7"GRRQPH//<@@>I!`YK$T7XB'6_AG+XOCCTRT
M(%QL%U?[+;]W*\8+3;>%.P'.WOTH`YCX/_#[6/!VLZ?-=:*+"(:$UI=.LL1W
M2K<L8E;:Q+;8C@'D`<<=*C\;?"7Q5XFU74K<:M826&I^']8L'G^QF-XY+DP"
M)6/FG=@1CY@N`L6",L"/1[;Q=X?O-6.D6VMZ=-J"EU-K'<HT@*8W#:#G(W#/
MIFN?\4?%K2-`OI;"WDM[FYM-1LK._1YO+%NMQ(%WYP<[0P)Z#GKVH`H:%X2\
M4W7B#5_$2WA\.RW_`-CB-L\,=R6CAB.X'#$+EY'`(.<*#WJ;X=^#[G1=7\2Z
MOJ]K=V3SZY<W5KOO-T4D#H@#E%<J#\IY(##\:Z>/QEX=DM;.Z37--:"^(%K(
M+E-LV6"C:<\_,0OU('4UE_$#Q9JGA2R:]MO#B:KID$?F:B[70C=(B<'RDVMY
MK`9)4E.,8))Q0!R^D>'=?F^$=Q%81,T]SKTVJ16C,$,UD^I-<>1EL`>9`2N&
MP/GP<#-0Q_#>_7Q/H5Z-!4Z9!XHGU*.V<P_\2ZV?3WAVXW8^:Y)DVIG&_/!%
M;M]\9-,TK4;@7ML8=)AO;G3Q?>9DF>"V:XD&S'"A(Y1G/WHR,<@U`?C78Z?I
MUU)K-@;&^CCLY(;07`;S1=!O)&XA0IW1RAL\*(RV<4`>A456TNZ>^T^"YD^S
MYE0/_H\WFQD'D%7P-PQWP*LT`%%%%`!1110`4444`%%%%`!1110`4444`%%%
M%`!1110`4444`%%%%`!1110`4444`%><R_"W4H_!&M>`;6YM%T'5IKH&Y9V$
M]O;W,CO-$$VX8YDD56+#`89!V_-Z-7(W?Q<\+V+WJ7%Q=1_8^6_T20[Q]H-N
M2H`R0)1M_(]"#0!R.K_!#5=5CO+..^L[*VN;S4I%DB9F>*.YM/(3`*@%E/)&
M<8'6MNT\'^+Y-5TKQ)J">'AJUOY\5Y:VC2)!<))'&OF%RA8R`PIC*X"DKGC)
MNW?QH\*6-H;B:341L6[:2)=/E,D8MBHGW*%XV[E/N#D9K0_X65X=^W?8A=R>
M9]O73\B)BOG-;?:5&<8P8?FST[=>*`//M1^&-MX0\.7^FZG>S26EYH&FZ%I\
MMI!)+<)=6S7#QRA54A?GE0KDX!09-;>L_#+7K]7:*ZT^6:\\,7>E7LDC-'_I
M$Q#F50%/RERV1Q@8QFK>I_%>WU"VTZ7P[+R^LV-G=I<VS*PAN`KJR@XQN1E(
M/;D$`CC;\0?$GP_X8UAM*U*:ZCGCM/MLS):2/'!!\W[QW52JKE&&2>N/44`<
MMIOPU\1V:ZIIMXOA_4](O(GFC%R)/.25[40/#N`XC.#\XPVUBNWO6OIO@?6K
M3X<:UX;N-1^UW-[%<16C7-PTQA1TVHCS%0\FW^\PW8P#G&2/\;/"0#)%/?75
MRLTD!MK6RDGD#I$LK#"`_P#+-U8<]_4$"_;?%'PQ>I936E\UQ:7CP1174<3&
M(23(LD*,V/E9U="`?[Z@X+*"`<.WP1U633+F&V71M(ED\)3Z%(ED[;+Z61%5
M9ICL7B/:VWY2?WC<]CMV7PQU1;UHKNZM6LCK4&LK*LC>=')'"B&(#;@J3'][
M(.UBNWC)N:-\9-%\1^(-)TK2;+59X]2CFDCNY+)X8ML6P,07`W<N!QTP<XX!
MO'XDZ?'XFU70YK2[CDT]K>)7V9^TRRJ65(QWX&<G'1B<!<T`</X1^"_B/03H
M%K?MX?OK*TTG3]/NQ*TKO"]D3Y<T(P`2W#88#8P!!;'-[2?A?XJA\/:'I&I3
M:!*VB7=@D-W"KK+=6UJ^Y3*2IP^.B#*@LQSS@=Q#XYT2?PV?$"71%D)3;MO0
MHRRB7R3&RG&UA)\A!Q@US<GQ7BT[QY=:;J2S0Z4;&P:W/V)P\4]Q=7%OB4\[
M5+1Q@$@#YL\CD`#E^'>K#X,ZWX+,UE]OU"VU"".0.WE)]I>5E).W/RB49X[5
MFS_"G6[K56O&GL(U?4=.NCLF?<JV\!C<`[.I)R/UQ70W7Q?\*V1O/M%S=1BT
M*;O]$D.\-<&V!4`$D>:I7\CT()RO%7QMT.QT#4!IMV8-96PGEM(+RV9")TMF
MN!$Z'#!M@W$''0C.1B@"UX`\,>+O"FBVEA?_`/".W$UG';:>MS`KH]Q:Q9&^
M0XX?:3A!E02W/S<-\;_#G4/$VHZ^(+J`6/B'1(])NO,=EDM-CS%98L`@MB=N
M"5P40YZU>T3XGZ1J5BB,UTVHI(EL]K]F9)))6@$WR*0,J4RV>F`>XJA;_%6S
MG\3^8E["_AZ31(KZ%U@82M*]P8@F#SN)VJ$VAMQQUXH`V/"OA>^T?4_%EQ=R
M0B/6M4%Y`8)"6C3[+!!@Y`PV82W&?O>U<3-\&-<N/#>EV<EWIWV[0],MM.LW
M5W"7BPW-O,K2_+E"1;*.`VTR.>>ATM(^-6FZ?8ZS=^*KI;,6FIW<44?D%'2W
M@$>]F7)SMWC)&<Y&`:VXOBWX:N-0EL;9[^>6.Z-H"EE($DF"[S&CD!6;:"V`
M<D#C/%`&+X2^&6LZ1XQLM;U%],DBADU>1DB=F(-Y<P3)MRH^[Y)!Z=<BI?&G
MPPU3Q/J_B>]MKNRMFU+2K"VL9'#,8YK6>>;YU`'R,9E4@'.`?6NOU'Q/8Z;;
MV<D@GDDO1_HUO'$3++A"YPOLH).<>G4@'E[;X@3^+?&5AI?ANZ5-/?38-5^U
MM:&1+B-Y2I3!*E/E1AGJ&(R#M*D`Y'4_!>L#Q=H^EG2O#\%[J?A[6DO%@:0V
MT;S/8KNW%-TC$(3A@N0&&1MS6]I7PAU#288-+%]#<Z?8ZJ-3M+B21A<%OLYB
M\IOEQC<3\P/W#MV]ZO'QUKNL:=XJU?1([%;;0+J>UAMYXV+7CP*#+EPP\L%M
MR+P<;=QSG:+.@?&CPKXA;3X[>:[C:^:*-#+:NL:226HNE1GQM!,1W=<<8ZT`
M4O!7PWU7PI<^"9"^GNFB>&GT6^V.P+/_`*-B2/Y?F&;<@@[<;@><8JAJ_P`,
M/%%SKQEM+O2&LTUZ;6()KDNTH,MA-;&)H]I5@K2!@=W*C;@8R>MMOB1H=V%6
M$W;2RF,6L1MV5KH2(TB&/.`P*1NWL$.<8KGKWXQZ?9:RNH&Y#^&%T&;49I$M
M7,L3QW"1/N'4!<L&!4%2ISTX`,70?A#XITS4;+4)IM)#P:O;:@T:7<K<)I[V
M<@5C&,8+[U``&/EPH`--\/\`P<\4:%I>BD-X=DU+P_<6ZVLZ>:AU*WB22,+.
MQ!,;;92P"AE#C/?`[K4/B'9V7BVP\-QV5Y--=B8F9(LQQB.-'/3DG$J=/?\`
M&KX8^)6D7^B:'+)J4FI/?6MN[7T-B\43-+%YB,R\^5N4%MI)VY4$C*Y`,Q_A
MKK$OP.UOP*T]@NHZE:7]NDH=O)3[0\K`D[<_*).F.U.\7?#.\N;?1+CPW9:'
M;W%C.[W=A/OCMKE9(A&_S1KD,-JD';R`01SD==H'B.T\5:4;_2VD$+`>5)+$
M0KAD5U=?[RE64\'U'!!`\R^'_P`;-7\2KX96_GT>=]8T&;4[Q;&UD5M/:,(0
M2#(WF*2Y&T8;C/(Z`&K:_"&\MM3E13IB:<=2L-1A\@&-HFM;>.)8E3!"J3$O
M.XX5F7'<XNH_`[Q`_P`/](\/65QI"W5OX+O/#-U([NJ;IHX%$RX3+<P<@XX;
M.3C![?2?B9HG]C:5-<ZDUW]I@M!+>QVC1Q>9<*OE;EY\LR%EPI)QN4$\C-&R
M^.?A=M!M]6U.2;2TG:4B.X4;DC2;RO,8`\+G'3/\74*2`#GO$?PC\5Z]K6JW
MAGT9$N[;4;:(B:1,+<P1QH2@3;N5H\%N68$'(P%K6D\-VU[XZ\/VUG+);W^D
MV"PZS'';/Y,]L0KQKYA4*2)HU(`R=IE&!FK?CGXIPZ7H%[/H;LUW;O&4DEM7
M:*5!=)!+L(P"5+$?7!`(K>M_&%MKGA?4M6T9F$EGY\12Y@93'-%D%70X/4>V
M0>#0!5\<6/BS4)[.+0;70Y[*/]Y.FH7,L9>0$&/A$;*@C.,C)QV!S5U'PKJ5
MYXKA\4S6.E6]]I5M<0VD\,KL]VKJ-J2@("J!ANV@OR`0?6CX6^,NEW6@:"VN
MR/'JM_IVFW=T+:RE$$37I*0_,<@*9%9!EC@XS74Z3XOTS6]2DL+-IV=4:1)#
M"PCE57,;%&Q@X88_(C((-`%+6#XOU+P?9_V9;:9;ZS.D1O(Y[F2..(%<R*CJ
MA;.>`<#KGJ*Y;6OA-JOB&WG2Y.E68U71X='U.&U+^7#!%.[H(<KDG9+*O.WD
M@]L5Z=10!P/A_P"%]QH_B6RN9+B!M-TR_P!1U"R52?,:2\<NP88P`ADF`P3D
M,O3'.OI]EK?AZ&P@M[>SNI+S49I]3<NX*)(SME#MP=N44;L95<=<5T]%`'GG
MCSX;:MXH\33:E9S6*020Z8@661@V;6_%TW`4C#*-H]ZSK3X7>*M)U)KNSGT&
MYANKG4DO+6]5Y(_(N;LW"NHV\NN=I0_*W'S#%>J44`>7W_PLU]M8N-3M)],9
MY-:NKU4EE=0(9K(6_)"'YU*AMO0CC<*S]'^#GBC28;#3S>:5-9QWFF7\LIED
M62)[:VBMWCC&S!5A"'!)!!9ACG->P44`>/>'_@[XHT+3-%(;P[)J7A^XMUMI
MT\U#J5O$DD86=B"8VVRE@%#*'&>^!O?\*UU=_@GJG@EY[!=1O8;R-9%=O)4S
M2R..=N>`_IVKT.B@#SO3?AMK%IXQM]:DEL/)CU^[U-E61BWERVHA51\N-P(R
M>V*3Q#\-M:U/Q3?W]M+I_P!CN]4TO4!YDCB1?LKJ73:%(Y"#!SU/.,9/HM%`
M'D&F_!?7]/U2&61M!OK*Y,T=_;W7F,(E-]/=121``!F`N"I5@!E5(/&#VOC:
MQ\6ZA=V<>A6VA3V,?[V9-0N)4+2A@4.$1LJI&[&1DXZ8YZJB@#S'5?@FVNSW
M6G7]W#_8LNI7FIKY>1+YMS:/;NA&,;1YTS@Y[J,<9,7_``I[5;C4;'Q#>7&G
M3:Q83:>8HLMY$J6L4\?S';E2WVN9AP=I"=<9KU.B@#G_`(=>$CX'\'V>AM*D
MAA:60[/N(9)6DV)_LKOVK[**Z"BB@`HHHH`****`"BBB@`HHHH`****`"BBB
M@`HHHH`****`"BBB@`HHHH`****`"BBB@`KR^X^`S75W>7$WB661[H,CN]HI
MD9?M:W*[VW98KMV9X&T*`!CGU"B@#SN]^"J7LU_(VM,OVQ=34@6WW1>A`W\7
M\/EC'KFDD^"[-JBW<7B*XMT%[#?E8K=0PG2R-GN#$G`*;2!CA@>3GCT6B@#S
M31/@>VD["^O^<PO;&]D*V03>]LNW)^8G+X!)))R6/.0!O^)OAM:>*M3U>YO;
MV5+?5-$.D2Q1+M=%W.WF*^>&&\XX["NLHH`\ROO!7BRU\0^$7.O2ZI=6DEV;
MG4I;!%2)6@V(#&A49)YSGD^V`+VA_!32_#MJNE6%[*-&^T6-VUI(@9C/:)$L
M3A\C`/V>`L,<E.",FN_HH`XG0/A<?#Y\+M#J[.^@Q7,&3;@">.9E9AC/RD%%
MYYXSQSD&M?"P:IXIN/$$&KO;7#7-K>0+Y`8130J\>3R-R-&[*5X/S$@@XQVU
M%`'-KX$MHO"EYH4;V\@OKF6YNC<VJS13-+*9)%:,G!0[BN,Y"XYR,US-O\"K
M>UM'MH=;F$;06,*!XB_EK:WLEVBJ2V=N9"@!)PBJ,DC)]*HH`\N;X#227%S/
M+XFDEDN/+WR/9J7?R[P72%VW99LC83Q\H7`&.=74_A-<7MWXD6W\37=OI>OQ
M2&>P^SHZQS20^2TBO][:0`VS.-PSG&0>\HH`X*'X1_9=>37;;63'J$-S#/`Q
MM\H-EK]F9&7=\RLASU!#`'/&#6O/@;93Q;+;5Y[5DM8DAD2)2R7$=Y]L6?G@
M_ON2N,8XXKT:B@#SB'X-7]IJR:W9^+[FTU5KJYEN)HK*,QRQS^49(A&V[&&A
M0JV21@YW9-7+[X26]_H>K:1<7=M=6VIZH]_(EW9^:J[HPH4?,"&4JK!P000*
M[NB@#FK_`,#&8>'9[35)TO\`004AN;A?.\]&B\MQ*,@MN&&R"#N4'ID&OX4^
M&UMX1UJ&_LKQFABTI-.\EXQEMLCR&0L#U+2-D`8]*ZVB@#D;GX<8CUZST[59
M+'3M?E::^A6(,ZNZ!)6A?/R%P`3D-@DD8S6<WP8T\7YDANQ%9?VI%?K:+!\J
MK'8_8Q$#NZ>7SGKFN_HH`X#2OA/?Z;INC6\WBV\OKC0;E)-)FGMDQ#&L3P[)
M%7'F$QRLI;()PI&".4F^'MMX2\S5H+"\UU#97%G/IMO%'ON3=77G3/EW50-S
M,2N>%SC/`KT"B@#AO#WPN;0[3PBT&J2I<Z#:RP.9AYYG$JKO!;(.047!]`1[
MBKX-^#ESX'^PP:5XKO8[*+3K:SN[;[.F+E[>(11R[CDH2JH&`X;:.G.?0Z*`
M.8\#>`8?`UIJ45E/"IOI_M!B@M_*MXGV*I*1!B%W%=S8(!))P*P="^"PTO3O
M#-C=:W]JC\,V<MMINRU$9+/"82\AW'=A&/`VC)R>@QZ+10!Y]HWP7M-'T^/3
M!JCS:>\6GB[A:$9FDLQ&(W4Y^7<(HPPP<A>-I)-1:9\&;K1+NQN=,\67=HUN
M)[>8):H1/;23&58SG.UT9FQ(/[QXZ8]&HH`\]/P>N1HVHZ$/%-VVD3W7VBSM
M7MT(M,W`G9=PP7&X$+D_*I(YX(W])\%G2=)UVP2^WG5KNXNBYB_U1EZC&><?
MA71T4`>;V_P02WL+>T&ML1!I^CV*M]FZKIUPT\;?>ZN6(;VZ8K6\-_#W5?"U
MO<V5AXLN_L/GE["WDM8V%JC3"1XR>KC&Y%)Y53W(S7944`%%%%`!1110`444
M4`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110
M`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!
M1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%
M%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`444
M4`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110
M`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!
M1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%
M%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`444
M4`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110
M`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!
M1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%
M%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`444
M4`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110
M`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!
M1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%
M%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`444
M4`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110!S?BOXC:#X1O8--N
MYY[K5;E"]MIMC`UQ<RJ#C<(T!(7/&]L*.Y%>6^$_!OQ*\9SQZE\2?#D,LLMT
M7\E_%,UM%9P[\J([:W1E9PN.9)"2<_,`<"CJW@3Q1XN^.WC#6O#UW%;V,`L[
M'4])O+V:S.I!8=Z2K-$A>.+]X5P,ARCYSC%:^J_`[5=9LO(TKPSX.\#7JE73
M5]'O9I[I&!!X(AAY)&,L7&"<J>E`'LESJ%G926\5S=0027,GE0+)(%,KX)VJ
M#U.`3@=@:GKPWQA\#/'6OWOAWQ:WB#3=0\9:9J\=SYL[RV]E:6RI(&AAC3).
MYF0N6P7QC*C`%Z^_9_\`$6K>-;+6KOX@ZO$GV&2'5;JUF:*XO6=@?)C7.RWA
M7:I78-_+9;/S$`]C>1(@"[JH)"C)QDGH*X;XC?';P+\--%U&]U+Q%I4M[9(<
M:;'?1_:)9.BQA,Y!)QR1@#)/`KR[Q7^R[XZO++PO!I_Q$CU<:*!#Y6KVVV*.
M-61DEB"983C809"VXAC@J.#JZI\!]<L_B9X>^(<]KIOBC5+1[@W%I"D>GVUN
MSH/+>-"&+88N69V9R2I'3%`'L?A;Q%:>*-"M=3M+FPG$L:F7[%=K<Q(^`602
M+PV"<9P,^@JS<:O86NHVNFS7<27EVKM;PEOFD"`;R!Z#(R?<>M9^I>'W\7>$
M;C1O$:B%KZ`QW(T^YD39GLD@VMQQS@9QT`.*\:^`O[/&K>#_`!YXCUSQ3=:[
M/9VEW]E\,QWNMO.WV56+%W",%(8B-@C#@KR,X-`'M?BG4-9TO1I+G0-%CUF^
M5E"6CW@M@X)Y.\@@8'/3FN(^''QCOO$?@C7?&WBW2;'PYH>GSS);NEY]H\V.
M$E9)=X50074A<#G'?(SZ%JL<4NE7<<]R;2)H'#SAPAB7:<L">!@<Y]J^1M.^
M'UW\5M<\.?#'3O%WB6X\*:+9B^@U7R(K2"2"$B.+R80N929"O[Z0D'8Y0=20
M#Z-^$>J>)-?T>ZUOQ3.D%UJ,PN;?2`%!TRW(_=1OCDR%<,Q/=B``!7:U\]>%
MOV5==TG0[RZN/%4EAXJ%C<6\.I:1<RQ27LLAW>==S,#(Y++'\@X0*<$DYJ;1
M/@Y\8=*_X0EE\2>'H[;0X6A?31Y[00N8M@NF;AKF7+.VUMBY(QW-`'O]))(D
M,9>1U1%&2S'``KP[Q#^SMXI\1^(/$"-\0O$%MI&I:,D#O]N9GNK[,F)610HB
MB0%/W<>T-C!XSGRO]I/PW\1M2EL/"GBSQIHVJF_:WM]&T'1EFBN+MMP621XV
M;&0,D/)(4&T_*"<@`^Q@01D$8KGM-^(GA_5?`\WC2WNV&APPS3M</&5_=Q%@
M[@'G'R$@]Q@]ZY6/2/'LOPQO/#NA:!I'A@QZ3]@TB.?4VN)83L"(TA2/:I4<
M\%\D#FN?U#X3?$FZ^"(^&Z7OA!%BCM;&*>..>-&M8V'F&1><LRJJE00#N?YA
MQ0!Z%XS^)NE>"/"=OXGO;/4KG3Y_+YMX!NC#C*L^XJ$'0<D<D#J:G\"?$/2?
M'\.H'3HKVUN=-N?LM]:7MN8IK>3:&"L.G*L"""1S7$_$+X<>,_BGX(TG0?$K
MZ9:N->MKB_71KR:.,V<9W,`S`,6+`$#`P=I'*YKT/PGX/T3P1I(TO0-/BLK7
M>9&"DLTCG[SNQ)9V/=F))]:`->BBB@`HHHH`****`"BBB@`HHHH`****`"BB
MB@`HHHH`****`"BBB@`HHHH`*X_1O&FK>*K*ZUC0;"TFTR&_DLXDED*R7(BE
M,4LJD<*`R/M4@[PHY7/'85R'A/P7JW@S[5I6FZC:?V'+>S7D"O"?/M?-D:62
M('.UAO=BI(&T'&&Q0!#XM^*FFZ7X?U>[T2ZM;Z_TU5=H'W!2/.\IB#QN`<.I
M*DX9<&M>]^(/AC3+N:UO-9M;>2!)7D,A*JHB4-+\W3Y`REN>,C-<#=_!#7KZ
M35I+G7["634+1[4R_97#$&[\]6/S8&`=NU0!QD=:RQX6\2:UXIU^VT](;$W,
M]_';O<:5<H;$S+M:=7;,,H<QQGY3G#'`4EA0!Z7-\4/"5LD+3:S%$TT[VZ1/
M&ZR>8F-RE"-P(W*3D="#TYK2T;Q3I'B"WM;C3+U;F*Z61H65&PPC;8_4<88X
MY[UQ'A;X3:GX>\46^L3ZC8R0PW]U>F&*%PW[Z".,C<S$D@QDY/)SZFG>%='U
M&TTW7O$'A:&>!M4OUN=.L=7LGB%NKE&N!Y9*NGF2>:W/<AL$8!`.FU[Q7):>
M*-,\+:;%$^I7]O-=L\N?+MX(BBLY`Y8EI44+D9R3D8Y1_&UMH2)#XIFM=-NY
M)76-8W9T>,.J"7./E4F2,'=PI<+D\$Q>)?!]W>^*M*\5Z+=06^IV%O-9O'<(
M6BN;>4HS(2#E2&C1@PSC!&#GC"^(GPS\0^.XXD.N6,:?97C>)[5BBR&6-U9<
M,"0!'M^;/)W#'2@#HX_B7X3DGNH1KEJIM(KB6=G)5$6!MLQ+$8^0D;AG(R">
M"*I>)OBCHVD>$=3UFQNXYY[2"X9+=XI`WF0IN973&Y`/ER2``&!)Y%<W<_!S
M7'BE:UUVSMKEO[89)1;E@K7TJR+\I/\``5P?7.1BJ8^!FOV\FJ7%IKNF1R:E
M%?VTL36LC(L5U'"&()?<75X`<G[P8YYQ@`[[0O'FCZO-9Z>;Z$:I-`KO;J#@
M/Y22,@/3<%D5MN<[6!QCFNAKS71?A/K>F^,M,UNZURRNH=/F+(OV5E?RS:+`
M4'S[1\R[LXR<C).T5Z50`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%
M%%`!1110`4444`%%%%`!1110`E%&*,4`%%&*,4`%%&*,4`%%&*,4`><?$9_^
M$P^(7A[X=3N5TJYM)]7U:/./M4,+QHEN?5&>4%AW5-IX8U'\$T7Q#J'BKQR4
M`CU34VL--P,!+*T+0QA1V!D$S_\``Q6M\2OAM>>+;G3M=\/:R-#\2Z4DL=G>
MF#SD:.1</%(F1N4X4@@@J5!'H=GP#X/MO`/@K1_#-I)YL6FVB6_FE<&5@/F<
MCU9LL?<T`;E%&*,4`07UY%I]E/=S9\J"-I'P,G`&3Q^%>$?"_3;?XA^)/#/B
M(_9[S4%_XJ77;Y"&\N6:!TL[)6](XIF.WML4D9DR??BH88(!!XQ5#0O#FD>%
M[`6&AZ58Z9:!R_D6=NL*;B<D[5`&3ZT`7Z*,48H`*!1BE`Q0`4444`%%%%`!
M1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!7F7A_P")FK6V
MN>*M&UI8[BXMY'N-"VIL-S#Y[6PB)'&Y9D4$^DJ?6O3:Y;_A6FDR:MINK7,D
MT]]IEU=7-G*VT;#<$LZ$``,H8A@#T*J<Y%`',^!_C$%\#^%[[Q3]IFO]7$*2
MW,%NJ0++-/Y,:C)'5R!A=Q`Y.!S6Q9?&+2]1BG:TT77IFB^T%(TM5+SBWD:.
M8QC?\VQU`(ZDNF`<UF1?`#3+>PTVRA\1:VL.GPVT46?(8GR+L74;<Q\'>`&V
MXW!5SG:*T#\'K6"STU-.\1:SIU[IUW=W$-]!Y)D*W4K2S1,&C*%"Q&/ER-BG
M.1R`0>%_B5))XTU?0=46\D2;7C8:7-Y"HB8T^&Z\INC;L&9@2IX7!(.`=/Q-
M/XJT[Q/I%QI^HVCZ?<7T=J^FFURTD14F27S,Y5EP6`QMPN.K##;;X5Z=:Z[%
MJZ:C?F6+6CK*HS(5\TV7V+:3MR5\KGKG=SGM5O4?!5]?>*DUR/Q=K=K$H13I
M\,=L8&13DKEHC(`Q'S;7!.!SP,`&SK,%_<Z;+#I=W%9W3X5)Y(O,$8R,L%R,
MG&<9XSC/%>9?\)WXNBAM-$EO+5M1:WU:\34!;!5N8;1T2(E,D#>TR9(/(4E<
M;@1VR>&-6O/!;Z'?^)M12^EWJVIP+")PI<D`?N]F0F%SL]^O-9T_PKBO=/@@
MO_$>KWEW#'/;K?.D"2B"9%22$+'&J!<(A&%!!4')YR`<OH?QFU'Q#)::W;1)
M%I<NL6.DFT9>2;BRCN/,W8R"KSQKZ;5;C)!'6^#CXEB\4:K8ZQX@BU:VM;>'
M!CL5@"3.6+)P2>$$9P>SBGP?"S0[36(;ZV$L-O%<Q78LEQY1GB@\B.3IG(C"
MC&<913U'._I6CPZ4][*CO))>W+7,SOC)8A5`X[!411[+0!=HHHH`****`"BB
MB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****
M`"N3U?Q)>WGQ#M/!MA.;(?V8^IW=TJ*S[1((XXT#`J,DL22#@*`!\V1UE8&O
M>"X=8UVQUZUO[K3-5LHGMUN+<(?,A<J6B=6!#+N56'0@C@C)!`.3U?X@:MX#
M\61VWB*XEOM.CTJ:ZN#:6Z#RU%VJ)*V2#\L;KN"DY.2%[5JZS\9O#^@W6IVU
M[:ZFCZ=9SWKCR!F6*&1(Y&1=V[`:1<$@!NJ[@*?XE^$]CXI-RU]J^I[[G2WT
MV5U,>2CR+(SC*8#94`?P@=JRM2^`FFZK-J$D_B+6@+Z&^A=1Y.52[ECED`8Q
MDG#1*%R3A0%Z`"@"U!\9;--:U*QU/1=1TJ.S6V6-KMH4:629I`$QOP.(R020
M,`DXXRY/CCX<<[OLFJB%+%;ZXG-NOEV\1:9!O.[KO@=.,Y)7&0<U-XG^$EGX
MEU:\U4:WJNGWEPMJT<MJ8P8)K=G,<J[D/.)&4J<J5)&*?=_"73M375!J>JZI
M>MJFD1Z7=2.Z*Y"/+()5*J-LFZ9SQA1A<*,4`9WB+XPV,GA76I-#CO6U>UM+
MR1(D2)S%Y$:,TN=Q1D'FQ?=+$[\8R&`Z4^(Y;#P'!K=P%FN6L8W520OFS.H"
MKZ#<[`?C6#?_``<75;2$7OB[7[C4%L[FQGOW\CS+BWG5`\;*(@@`\N,@JH.0
M3D[CGHIO"-O/I^CZ?)=3R6NF,C>4ZHRW.Q"BB0;<$`D-QCYE4]L4`8'@+XE-
MJ_@;3;W6(P^N-=R:5=6MKC,EY$760)D@`$1O(,G[G.:T[7XD:==M;"/3M759
M!%]I9[0K]A,BEE$ZD[DX')P0,@D@$&LJ_P#@OIMQ<ZG<V&LZII4UYJ4.JVYM
M!$JV-S'$(?,B4H1\Z#:X8,#D\#-6H/A9!;Z\=57Q!K++<P1Q:G:NT1BU%DSM
MDD^3*MR01&44@`8P,4`(WQ@T&(6YFM]0B%TMG):EHE_?Q7,Z012K\WW=\B!@
M<,H8$KS574OCCX>TNWGGEL=6>.VAOYYS'"A\J.RN!!<N?GZ*Q!XR2.@)XIS_
M``7TJ31+?37U347:Q@MK?3[EC&9+6.WGCGB`^7#8>*+)8'(09[DU;GX#Z1>6
M%_9S:UJ[I?V6IV4S9BW;+^=9IR/DQN#*-O&`">#V`+%Q\8[33$\0SZCHFIQ6
MVCZC)9F2,1L'"6ZS,Y.\!1@X`8C.5`R20+:?%W19M932[>RU*9GNDLTF6)!&
MTKVOVF-<E@?FCZ'&`>#C(S1UKX)V.M7=_._B#5X$OKJ2ZEAC$)0/):BV?`:,
M]54$'J#G&`2*L:=\'M/T^[M[H:OJ4LD&HV^H#?Y>&DAM?LJ@X0?*4&3CG=T(
M'%`"^"OBW8^+K#0F.G75O?:MIL&I?9M\;&*&7(5R-^67(()4''&X+D5V]<)I
M7P8TO3;3PW:2:G?7D'AQ85TX31Q!XO*R%PZH&&5(5L'Y@H![Y[N@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
M`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"
MBBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`**
M**`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHH
MH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`"BBB@
C`HHHH`****`"BBB@`HHHH`****`"BBB@`HHHH`****`/_]D_
`
end
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.F
<SEQUENCE>16
<FILENAME>ex_99f.htm
<DESCRIPTION>CODE OF ETHICS
<TEXT>
<HTML>
<HEAD>
<TITLE> </TITLE>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>

<!-- MARKER FORMAT-SHEET="Para Right" FSL="Default" -->
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>EXHIBIT 99.F</B> </FONT> </P>

<BR><BR>


<p style=' margin-bottom:6pt; margin-top:0pt;text-align:center;'><b><font size=2>ONCOLYTICS BIOTECH INC. (&#147;the Company&#148;)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=3>CODE OF ETHICS</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:6pt; margin-top:0pt;text-align:justify;'><u><font size=2>This Code of Ethics is applicable to the Chief Executive Officer, the Chief Financial Officer, the Controller and all accounting officers performing similar functions.</font></u></p>

<p style=' margin-bottom:6pt; margin-top:0pt;text-align:justify;'><font size=2>The Company requires ethical conduct in the practice of financial management and any and all activities that impact on the financial results of the Company from all its officers and employees (collectively, the &#147;Financial Officers&#148;). </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>The Financial Officers hold important roles in corporate governance and financial reporting. They are uniquely positioned and empowered to ensure that the Company&#146;s and its stockholders, interests are appropriately balanced, protected and preserved. This code provides principles that these officers must adhere to and advocate. This code is designed to designed to deter wrongdoing and to promote: </font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>full, fair, accurate, timely, and understandable disclosure in reports and documents that a company files with, or submits to, the SEC and in other public communications made by the company;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>compliance with applicable governmental laws, rules and regulations;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the prompt internal reporting of code violations to an appropriate person or persons identified in the code; and</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>accountability for adherence to the code.</font></p> </td> </tr></table>


<p style=' margin-bottom:6pt; margin-top:0pt;text-align:justify;'><font size=2>The Financial Officers will:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Act at all times with honesty, integrity and independence, avoiding actual or apparent conflicts of interest in personal and professional relationships</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Discuss with the appropriate level (senior management or board), in advance, any transaction that reasonably could be expected to give rise to a conflict of interest.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Provide full, fair, accurate, complete, objective, and timely financial disclosures in documents filed or submitted to the Securities and Exchange Commission, any other government agency or self-regulatory organization, or used in public communications.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Comply with the Company&#146;s policies and procedures, which includes compliance with all applicable rules and regulations of applicable </font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="233" style=' border-collapse:collapse'>
    <tr>
        <td width="233" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Approved by Resolution April 23, 2003</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>
<BR>


<!-- MARKER FORMAT-SHEET="Page Rule Double" FSL="Default" -->
<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:1in;text-align:justify;'><font size=2>governments, commissions and exchanges in jurisdictions within which the Company conducts its activities.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Act in good faith with due care, diligence and without knowingly misrepresenting material facts or allowing my better judgment to be subordinated.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Protect and respect the confidentiality of information acquired in the course of my work except when authorized or otherwise legally obligated to disclose. Confidential information acquired in the course of my work will not be used for personal advantage.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Be recognized as a responsible partner among my colleagues.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Responsibly use and control assets and other resources employed or entrusted to my supervision.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Proactively promote and be an example of ethical behavior as a responsible partner among peers, in the work environment and the community.</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Promptly report to the Chairman of the Audit Committee any conduct that the individual believes to be a violation of law or business ethics or any provision of the Company&#146;s Codes of Conduct, including any transaction or relationship that reasonably could be expected to give rise to such conflict.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Violations of this Code of Ethics, including failures to report potential violations by others, will be viewed as a severe disciplinary matter that may result in personnel action, including termination of employment. If you believe that a violation of the Code of Ethics has occurred, please contact the Chairman of the Audit Committee.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:6pt; margin-top:0pt;text-align:justify;'><font size=2>It is against the Company&#146;s policy to retaliate against any employee for good faith reporting of violations of this code.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>2</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>



</BODY>
</HTML>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
