Oncolytics has $2.43M cash, flags going-concern risk
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Rhea-AI Filing Summary
Oncolytics Biotech Inc. (ONCY) reported a third-quarter 2026 net loss of $9.705 million, versus $9.878 million a year earlier. For the nine months ended September 30, 2026, net loss increased to $28.390 million from $19.866 million, and operating cash use rose to $22.346 million from $13.681 million. Cash and equivalents were $2.430 million as of September 30, 2026.
Management said existing resources and capital available under equity-distribution arrangements were insufficient to fund planned operations for at least 12 months from issuance, raising substantial doubt about continued operations. ATM sales generated $19.626 million net in the first nine months; from October 1 through November 13, 2026, ONCY sold 3,633,301 more shares for $1.654 million net.
In REO 033, substantially all planned Part A sites were activated and multiple patients enrolled by quarter-end; in September, ONCY aligned with the FDA on the concept for a potential pivotal Part B expansion. Nasdaq gave ONCY until January 15, 2027, to meet its $1.00 minimum closing bid requirement. ONCY said it may, if appropriate, consider a reverse split.
0 points · 0 major1 major · 4 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- None.
Negative
- Major pointGoing-concern warning: resources fall short of at least 12 months of planned operations.
- Moderate pointNine-month net loss increased to $28.390 million from $19.866 million.
- Moderate pointNine-month operating cash use increased to $22.346 million from $13.681 million.
- Moderate pointNasdaq’s $1.00 minimum bid deadline is January 15, 2027.
Filing Explained
By November 13, 136,140,469 shares were outstanding, with another 40,705,829 reserved for potential issuance or plan grants, not already issued.
This quarterly report records common shares issued through the at-the-market agreement and for consultant services; outstanding shares increased from 108,021,271 on
By
The report also lists 40,705,829 shares reserved for future issuance, including options, restricted share units, inducement awards, warrants and shares available for grant; this is a mix of potential issuance and plan capacity, not additional shares already issued.
After quarter-end, the company received the final PanCAN grant payment, shown as
Key Figures
Third-quarter net loss: $9.705 million
Nine-month net loss: $28.390 million
Net cash used in operating activities: $22.346 million
+5 more
8 metrics
Third-quarter net loss
$9.705 million
Three months ended September 30, 2026; $9.878 million in the comparable 2025 period.
Nine-month net loss
$28.390 million
Nine months ended September 30, 2026; $19.866 million in 2025.
Net cash used in operating activities
$22.346 million
Nine months ended September 30, 2026; $13.681 million in 2025.
Cash and cash equivalents
$2.430 million
As of September 30, 2026.
Net ATM proceeds
$19.626 million
Nine months ended September 30, 2026; from ATM share sales.
Minimum closing bid requirement
$1.00 per share
Nasdaq compliance deadline was January 15, 2027.
Objective response rate
33%
Pelareorep-based therapy in second-line KRAS-mutant, MSS metastatic colorectal cancer; approximately 10% with standard of care.
Median progression-free survival
16.6 months
Pelareorep-based therapy in second-line KRAS-mutant, MSS metastatic colorectal cancer; 5.7 months with standard of care.
Key Terms
going concern, at-the-market offering agreements, Fast Track Designation, objective response rate, +2 more
6 terms
going concern financial
"These conditions raise substantial doubt about our ability to continue as a going concern."
Going concern is the accounting assumption that a company will keep operating and meeting its obligations for the foreseeable future. The phrase matters most when a company or its auditors disclose substantial doubt about it, a formal warning that the business may not have enough resources to continue without raising money, restructuring, or selling assets. That language in a filing or press release signals elevated financial risk.
at-the-market offering agreements financial
"Proceeds from at-the-market offering agreements, net of issuance costs"
Fast Track Designation regulatory
"received Fast Track Designation for pelareorep"
Fast track designation is a status the U.S. Food and Drug Administration grants to drugs intended to treat serious conditions and address an unmet medical need. It gives the developer more frequent communication with the FDA and can allow parts of the application to be reviewed on a rolling basis, and it may pave the way to priority review or accelerated approval. It can shorten development timelines, though it does not guarantee approval.
objective response rate medical
"demonstrating a 33% objective response rate"
The objective response rate (ORR) is the percentage of patients in a clinical trial whose tumors measurably shrink or disappear according to preset rules. Investors use it as a quick, objective signal of a drug’s ability to produce a clear treatment effect—like counting how many plants visibly respond after applying a new fertilizer—and higher ORR can improve odds of regulatory approval, commercial success, and company valuation.
progression-free survival medical
"a median progression-free survival of 16.6 months"
Progression-free survival is the length of time during and after a treatment that a patient's disease does not get worse, measured from the start of treatment until the disease shows measurable signs of progression or the patient dies. Investors care because longer progression-free survival in clinical trials often signals that a drug is effective, improving chances of regulatory approval, market adoption, and revenue potential—think of it as a stopwatch showing how long a therapy can keep the illness at bay.
process performance qualification technical
"preparation for process performance qualification"
Process Performance Qualification is the final proof stage where a manufacturer runs full-scale production under normal conditions to show the method consistently produces safe, effective, and high-quality products. For investors, it signals that manufacturing is reliable and compliant with regulators—reducing the risk of supply interruptions, costly recalls, or regulatory delays and helping predict production capacity and future revenue.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were ONCY’s net loss and cash position in Q3 2026?
ONCY reported a net loss of $9.705 million for the three months ended September 30, 2026, and cash and cash equivalents of $2.430 million as of September 30, 2026. Its net loss for the first nine months of 2026 was $28.390 million.
What is the status of ONCY’s REO 033 colorectal cancer study?
By the end of the third quarter, substantially all planned clinical sites for Part A were activated and multiple patients were enrolled. In September 2026, ONCY aligned with the FDA on the concept for a potential pivotal Part B expansion.
When must ONCY regain Nasdaq’s minimum bid-price compliance?
Nasdaq gave ONCY until January 15, 2027, to regain compliance with the $1.00 minimum closing bid requirement. If ONCY does not regain compliance within the applicable period, Nasdaq may provide notice that its common stock is subject to delisting; ONCY would then be entitled to appeal.
What clinical data supported Fast Track for ONCY’s colorectal cancer treatment?
The clinical data cited for pelareorep-based therapy in second-line KRAS-mutant, microsatellite-stable metastatic colorectal cancer showed a 33% objective response rate, compared with approximately 10% with standard of care. Median progression-free survival was 16.6 months versus 5.7 months, and median overall survival was 27 months versus 11.2 months.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| (Mark One) | ||||||||
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the quarterly period ended | ||||||||
| or | ||||||||
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO . | ||||||||
Commission file number: 001-38512
(Exact name of Registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
Registrant’s telephone number, including area code: (403 ) 670-7377
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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. Yes ý No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company in Rule 12b-2 of the Exchange Act.
Large accelerated filer o | Accelerated filer o | ||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No ý
As of November 13, 2026, the registrant had 136,140,469 common shares outstanding.
ONCOLYTICS BIOTECH INC.
FORM 10-Q
September 30, 2026
TABLE OF CONTENTS
| Page | ||||||||
Cautionary Note Regarding Forward Looking Statements | 3 | |||||||
PART I. Financial Information | ||||||||
Item 1. | Financial Statements | 4 | ||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 19 | ||||||
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 28 | ||||||
Item 4. | Controls and Procedures | 28 | ||||||
PART II. Other Information | ||||||||
Item 1. | Legal Proceedings | 28 | ||||||
Item 1A. | Risk Factors | 28 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 29 | ||||||
Item 3. | Defaults Upon Senior Securities | 29 | ||||||
Item 4. | Mine Safety Disclosures | 29 | ||||||
Item 5. | Other Information | 29 | ||||||
Item 6. | Exhibits | 30 | ||||||
Signatures | 31 | |||||||
2
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
All references in this quarterly report on Form 10-Q to the terms “we,” “our,” “us,” “the Company,” and “Oncolytics” may refer, as the context requires, to Oncolytics Biotech Inc., or collectively to Oncolytics Biotech Inc. and its subsidiaries. Unless otherwise indicated, all references to “$” and “dollars” in this report mean U.S. dollars.
Certain statements in this report and the documents attached as exhibits to this report, constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, as amended. 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 “expects,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “potential,” “possible” and similar expressions, or that events or conditions “will,” “may,” “could” or “should” occur.
The forward-looking statements in this report are subject to various risks and uncertainties, most of which are difficult to predict and generally beyond our control. Some of the important risks and uncertainties that could affect forward-looking statements are described further under the section heading “Item 1A. Risk Factors” below. If one or more of these risks or uncertainties materializes, or if underlying assumptions prove incorrect, our actual results may vary materially from those expected, estimated or projected. Forward-looking statements in this document are not a prediction of future events or circumstances, and those future events or circumstances may not occur. Given these uncertainties, users of the information included herein, including investors and prospective investors are cautioned not to place undue reliance on such forward-looking statements. Investors should consult our quarterly and annual filings with the securities commissions or similar regulatory authorities in Canada and the United States (“U.S.”) Securities and Exchange Commission (“SEC”) for additional information on risks and uncertainties relating to forward-looking statements. We do not assume responsibility for the accuracy and completeness of these statements.
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, except as required by applicable law.
3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ONCOLYTICS BIOTECH INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
| September 30, 2026 | December 31, 2025 | |||||||||||||
| (unaudited) | ||||||||||||||
| ASSETS | ||||||||||||||
| Current assets | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Other receivables | ||||||||||||||
| Prepaid expenses | ||||||||||||||
| Total current assets | ||||||||||||||
| Property and equipment, net | ||||||||||||||
| Right-of-use assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||||
| Current liabilities | ||||||||||||||
| Accounts payable | $ | $ | ||||||||||||
| Accrued liabilities | ||||||||||||||
| Operating lease liabilities, current | ||||||||||||||
| Warrant derivative | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Contract liability | ||||||||||||||
| Stock option liability | ||||||||||||||
| Operating lease liabilities, non-current | ||||||||||||||
| Total liabilities | ||||||||||||||
| Commitments and contingencies (Note 10) | ||||||||||||||
| Stockholders’ Deficit: | ||||||||||||||
Common stock, par value $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Accumulated other comprehensive income | ||||||||||||||
| Accumulated deficit | ( | ( | ||||||||||||
| Total stockholders’ deficit | ( | ( | ||||||||||||
| Total liabilities and stockholders' deficit | $ | $ | ||||||||||||
See accompanying notes to the condensed consolidated financial statements.
4
ONCOLYTICS BIOTECH INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited)
(in thousands, except share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| Research and development | $ | $ | $ | $ | ||||||||||||||||||||||
| General and administrative | ||||||||||||||||||||||||||
| Total operating expenses | ||||||||||||||||||||||||||
| Loss from operations | ( | ( | ( | ( | ||||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||||
| Change in fair value of warrant derivative | ( | ( | ||||||||||||||||||||||||
| Fair value loss from Standby Equity Purchase Agreement (“SEPA Arrangement”) | ( | |||||||||||||||||||||||||
| Foreign exchange gain (loss) | ( | |||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||
| Total other income (expense), net | ( | ( | ||||||||||||||||||||||||
| Loss before income taxes | ( | ( | ( | ( | ||||||||||||||||||||||
| Income tax recovery (expense) | ( | |||||||||||||||||||||||||
| Net loss | ( | ( | ( | ( | ||||||||||||||||||||||
| Other comprehensive loss: | ||||||||||||||||||||||||||
| Translation adjustments | ( | ( | ||||||||||||||||||||||||
| Comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
| Basic and diluted net loss per share | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
| Weighted average common shares outstanding - basic and diluted | ||||||||||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
5
ONCOLYTICS BIOTECH INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY
(unaudited)
(in thousands, except share amounts)
| Three Months Ended | ||||||||||||||||||||||||||||||||
| Number of Common Shares | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total | ||||||||||||||||||||||||||||
Balance at December 31, 2025 | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ( | |||||||||||||||||||||||||||
| Issued pursuant to restricted share unit awards | — | — | — | — | ||||||||||||||||||||||||||||
| Issued pursuant to at-the-market offering agreements, net of issuance costs | — | — | ||||||||||||||||||||||||||||||
| Issued pursuant to consulting services agreements | — | — | ||||||||||||||||||||||||||||||
| Reclassification of warrants | — | — | — | |||||||||||||||||||||||||||||
| Stock option liability reclassification | — | ( | — | — | ( | |||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | |||||||||||||||||||||||||||||
Balance at March 31, 2026 | ( | ( | ||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ( | |||||||||||||||||||||||||||
| Issued pursuant to at-the-market offering agreements, net of issuance costs | — | — | ||||||||||||||||||||||||||||||
| Issued pursuant to consulting services agreements | — | — | ||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | |||||||||||||||||||||||||||||
Balance at June 30, 2026 | ( | ( | ||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ( | |||||||||||||||||||||||||||
| Issued pursuant to at-the-market offering agreements, net of issuance costs | — | — | ||||||||||||||||||||||||||||||
| Issued pursuant to consulting services agreements | — | — | ||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | |||||||||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
ONCOLYTICS BIOTECH INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY (Cont.)
(unaudited)
(in thousands, except share amounts)
| Three Months Ended | ||||||||||||||||||||||||||||||||
| Number of Common Shares | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total | ||||||||||||||||||||||||||||
Balance at December 31, 2024 | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Net loss and other comprehensive loss | — | — | ( | ( | ||||||||||||||||||||||||||||
| Issued pursuant to restricted share unit awards | — | — | — | — | ||||||||||||||||||||||||||||
| Issued pursuant to at-the-market offering agreements, net of issuance cost | — | — | ||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | |||||||||||||||||||||||||||||
Balance at March 31, 2025 | ( | |||||||||||||||||||||||||||||||
| Net loss and other comprehensive loss | — | — | ( | ( | ( | |||||||||||||||||||||||||||
| Issued pursuant to restricted share unit awards | — | — | — | — | ||||||||||||||||||||||||||||
| Issue pursuant to SEPA Arrangement | — | — | ||||||||||||||||||||||||||||||
| Issued pursuant to at-the-market offering agreements, net of issuance cost | — | — | ||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | |||||||||||||||||||||||||||||
Balance at June 30, 2025 | ( | |||||||||||||||||||||||||||||||
| Net loss and other comprehensive loss | — | — | ( | ( | ( | |||||||||||||||||||||||||||
| Issued pursuant to restricted share unit awards | — | — | — | — | ||||||||||||||||||||||||||||
| Issued pursuant to at-the-market offering agreements, net of issuance cost | — | — | ||||||||||||||||||||||||||||||
| Issued pursuant to consulting services agreements | — | — | ||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | |||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
6
ONCOLYTICS BIOTECH INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
| Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||
| Depreciation of property and equipment | ||||||||||||||
| Non-cash lease expense | ||||||||||||||
| Stock-based compensation expense | ||||||||||||||
| Value of shares issued to consultants | ||||||||||||||
| Unrealized foreign exchange loss | ||||||||||||||
| Change in fair value of warrant derivative | ||||||||||||||
| Fair value loss from SEPA Arrangement | ||||||||||||||
| Value of shares issued for SEPA Arrangement commitment fees | ||||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| Other receivables | ( | |||||||||||||
| Prepaid expenses | ( | |||||||||||||
| Accounts payable | ( | |||||||||||||
| Accrued liabilities | ( | |||||||||||||
| Operating lease liabilities | ( | ( | ||||||||||||
| Net cash used in operating activities | ( | ( | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Acquisition of property and equipment | ( | ( | ||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Proceeds from at-the-market offering agreements, net of issuance costs | ||||||||||||||
| Proceeds from SEPA Arrangement | ||||||||||||||
| Net cash provided by financing activities | ||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | |||||||||||||
| Net decrease in cash and cash equivalents | ( | ( | ||||||||||||
| Cash and cash equivalents, beginning of period | ||||||||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||||||||
| Supplemental disclosure of cash flow information: | ||||||||||||||
| Cash paid for income taxes | $ | $ | ||||||||||||
See accompanying notes to the condensed consolidated financial statements.
7
ONCOLYTICS BIOTECH INC.
Notes to the Condensed Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share amounts and where indicated)
Note 1: Nature of Operations
Oncolytics Biotech Inc. is a Nevada corporation. The Company was originally incorporated on April 2, 1998, and completed a change in jurisdiction to the State of Nevada on March 31, 2026. This change in jurisdiction had no impact on our operations. Our shares are publicly traded on the Nasdaq Capital Market. Our principal place of business is located at 4350 Executive Drive, Suite 325, San Diego, California, U.S.
Unless otherwise indicated, all references in these financial statements to the terms “we,” “our,” “us,” “the Company,” and “Oncolytics” may refer, as the context requires, to Oncolytics Biotech Inc., or collectively to Oncolytics Biotech Inc. and its subsidiaries.
We are a clinical-stage biopharmaceutical company developing pelareorep, a well-tolerated intravenously delivered immunotherapeutic agent that activates the innate and adaptive immune systems and weakens tumor defense mechanisms. This improves the ability of the immune system to fight cancer, making tumors more susceptible to a broad range of oncology treatments. Our primary focus is to position pelareorep as a platform immunotherapy for the treatment of gastrointestinal (“GI”) and human papillomavirus (“HPV”)-associated tumors and advance pelareorep to registration-enabled clinical studies. We are exploring opportunities for registrational programs and investigator-sponsored trials in metastatic pancreatic cancer, second-line or later anal cancer, second-line Rat Sarcoma-mutant, microsatellite stable metastatic colorectal cancer, and HPV-associated tumors.
Going Concern
These condensed consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, these condensed consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should we be unable to continue as a going concern. Such adjustments could be material.
We have incurred operating losses since inception and expect to continue to incur losses for the foreseeable future as we advance the development of pelareorep and incur research and development, manufacturing, and general and administrative expenses. We do not expect to generate significant revenues unless and until pelareorep receives regulatory approval and becomes commercially viable.
As of September 30, 2026, we had cash and cash equivalents of $2,430 . Based on our current operating plan, we expect that our existing cash resources, even when considered together with capital that may be raised under our equity distribution arrangements, are not sufficient to fund our planned operations for at least twelve months from the date of issuance of our condensed consolidated financial statements included in this quarterly report. These conditions raise substantial doubt about our ability to continue as a going concern.
Our ability to continue as a going concern depends on our ability to obtain additional financing to fund ongoing operations. Management has plans to raise additional capital, including through the use of our at‑the‑market equity sales agreement and potential strategic collaborations or other financing arrangements. However, there can be no assurance that we will be able to obtain additional financing when needed, on acceptable terms, or at all. If we are unable to obtain additional funding as required, we may need to reduce or delay research and development activities, scale back operations, or pursue strategic alternatives.
Liquidity and Capital Resources
To date, we have funded our operations mainly through issuing share capital via public offerings, equity distribution arrangements, and the exercise of warrants. Until such time as we can generate revenue from product licensing or sales, if ever, we expect to finance our operations through public or private equity or debt financings or other capital sources, which may include strategic collaborations or other arrangements with third parties. If we are unable to raise capital or enter into such other arrangements as and when needed, we may have to significantly delay, scale back or discontinue our planned expenditures.
Our primary use of cash and cash equivalents is to fund operating expenses, which consist of research and development and general and administrative expenditures. Factors that will affect our future capital requirements include, but are not limited to, expansion of our clinical trial program; the timing of patient enrollment in our clinical trials; the actual costs incurred to support each clinical trial; the number of treatments each patient will receive; the timing of activity with our clinical trial research
8
ONCOLYTICS BIOTECH INC.
Notes to the Condensed Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share amounts and where indicated)
Note 2: Basis of Presentation
Use of Estimates, Judgments and Assumptions
Note 3: Summary of Significant Accounting Policies
The condensed consolidated financial statements have been prepared using accounting policies that are consistent with the policies used in preparing the Company’s audited consolidated financial statements for the year ended December 31, 2025.
Functional and Reporting Currency
Management uses its judgment to determine the functional currency that most accurately represents the economic effects of the underlying transactions, events and conditions and considered various factors including the currency of future expenditures and the currency in which funds from financing activities are generated. A company’s functional currency is only changed when significant changes in economic facts and circumstances indicate clearly that the functional currency has changed.
Effective January 1, 2026, the functional currency of Oncolytics Biotech Inc. and its subsidiary, Oncolytics Biotech (Barbados) Inc. was changed to the United States (U.S.) dollar (“USD”) from the Canadian dollar. The change was made to reflect that U.S. dollars has become the currency of the primary economic environment in which the Company operates, accounting for a significant part of the Company’s labor, operations and financing.
The change in functional currency was accounted for prospectively in accordance with ASC 830 – Foreign Currency Matters. Accordingly, translated balances at December 31, 2025 became the new accounting basis at January 1, 2026. Results of operations prior to the change were not restated.
Concentration of Credit Risk
9
ONCOLYTICS BIOTECH INC.
Notes to the Condensed Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share amounts and where indicated)
Fair Value Measurement
U.S. GAAP defines fair value, establishes a consistency framework for measuring fair value and specifies disclosure for each major asset and liability category measured at fair value on either a recurring basis or nonrecurring basis. Fair value is the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants, at the measurement date. In determining the fair value measurement of our financial instruments, we prioritize the related inputs used in measuring fair value into the following hierarchy:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 – Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable;
Level 3 – Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.
As of September 30, 2026, the carrying amount of our financial instruments, including cash and cash equivalents, other receivables, accounts payable, and accrued liabilities, approximated their fair value due to their short-term maturity.
Our liability-classified stock options are measured at fair value on a recurring basis and are classified within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs, including expected volatility and expected life.
Stock-Based Compensation
Awards of options that provide for an exercise price that is not denominated in: (a) the currency of a market in which a substantial portion of the Company’s equity securities trades in, (b) the currency in which the employee’s pay is denominated, or (c) the functional currency of the employer’s operations, are required to be classified as liabilities. Following the change in functional currency effective January 1, 2026, certain outstanding stock options with a Canadian dollar exercise price were reclassified from equity-classified to liability-classified options. The reclassification is accounted for as a share option modification in accordance with ASC 718 – Compensation – Stock Compensation (“ASC 718”). Under ASC 718, when an award is reclassified from equity to liability, if at the reclassification date the original vesting conditions are expected to be satisfied, then the minimum amount of compensation cost to be recognized is based on the grant date fair value of the original award. Fair value changes below this minimum amount are recorded in additional paid-in capital. For each reporting period after the modification date, the stock option liability is adjusted so that it equals the portion of the requisite service provided multiplied by the modified award’s fair value at the end of the reporting period. Increases in the fair value of the liability in excess of the minimum grant date compensation cost described above are recognized as stock-based compensation in operating expenses in the condensed consolidated statements of operations and comprehensive loss. For all grants of liability-classified option awards, the compensation cost is remeasured at each reporting period until the settlement date.
Future Accounting Pronouncements
10
ONCOLYTICS BIOTECH INC.
Notes to the Condensed Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share amounts and where indicated)
Note 4: Balance Sheet Details
Prepaid Expenses
Prepaid expenses consisted of the following:
| September 30, 2026 | December 31, 2025 | |||||||||||||
| Prepaid research and development expenses | $ | $ | ||||||||||||
| Prepaid insurance | ||||||||||||||
| Prepaid professional fees | ||||||||||||||
| Prepaid other | ||||||||||||||
| Total prepaid expenses | $ | $ | ||||||||||||
Accrued Liabilities
Accrued liabilities consisted of the following:
| September 30, 2026 | December 31, 2025 | |||||||||||||
| Accrued research and development costs | $ | $ | ||||||||||||
| Accrued professional fees | ||||||||||||||
| Accrued other | ||||||||||||||
| Total accrued liabilities | $ | $ | ||||||||||||
PanCAN Grant Agreement
In 2023, we were selected by the Pancreatic Cancer Action Network (“PanCAN”), a not-for-profit entity, as the recipient of its Therapeutic Accelerator Award to conduct a clinical trial with pelareorep in combination with modified FOLFIRINOX chemotherapy with or without an immune checkpoint inhibitor in pancreatic cancer patients. Under the terms of the award agreement, we are entitled to receive up to $5,000 in funding for eligible research expenses, and we must comply with the conditions set out in the award agreement, including providing periodic performance progress reports.
Funding received for the three and nine months ended September 30, 2026 was nil nil and $1,125 , respectively. During the three and nine months ended September 30, 2026, we recognized nil and $648 , respectively, as a reduction of research and development expenses based on eligible costs incurred in accordance with the agreement. During the three and nine months ended September 30, 2025, we recognized $597 and $2,127 , respectively, as a reduction of research and development expenses based on eligible costs incurred in accordance with the agreement.
Note 5: Leases
Our operating lease costs were $50 and $71 for the three months ended September 30, 2026 and 2025, respectively. Our operating lease costs were $194 and $216 for the nine months ended September 30, 2026 and 2025, respectively. Our variable lease costs were $11 and $13 for the three months ended September 30, 2026 and 2025, respectively. Our variable lease costs were $73 and $46 for the nine months ended September 30, 2026 and 2025, respectively. Variable lease costs consist primarily of a pro rata share of operating costs, insurance costs, utilities and real property taxes.
11
ONCOLYTICS BIOTECH INC.
Notes to the Condensed Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share amounts and where indicated)
Future minimum operating lease liabilities as of September 30, 2026 are presented in the following table. Variable lease costs are not included in these payments:
| 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| Total future minimum lease payments | ||||||||
| Less: Interest | ||||||||
| Present value of operating lease liabilities | $ | |||||||
Note 6: Capital Stock
We are authorized to issue 1,000,000,000 shares of common stock and 100,000,000 shares of preferred stock, each with a par value of $0.001 one vote per share at meetings of shareholders, to receive such dividends as declared by our board of directors (“Board”), and to receive our remaining property and assets upon dissolution, liquidation or winding up, subject to any preferential rights of holders of outstanding preferred stock. All issued and outstanding shares are fully paid and non-assessable. The Board is authorized to issue preferred stock in one or more series and to determine the rights, preferences and privileges of each series. No
At-the-Market Offering Agreements
On April 6, 2026, we entered into an Open Market Sale Agreement with Jefferies LLC, which allows us to sell shares of our common stock, par value $0.001 per share, with an aggregate offering price of up to $75,000 . During the three and nine months ended September 30, 2026, we sold 6,819,647 and 14,679,006 common shares for gross proceeds of $5,405 and $12,557 at an average price of $0.79 and $0.86 per share, respectively. For the three and nine months ended, we received net proceeds of $5,241 and $12,012 , after issuance costs of $163 and $545 , respectively (including commissions of $162 and $377 , respectively).
On October 17, 2025, we entered into an ATM offering agreement with BTIG, LLC, which allowed us to issue common shares, at prevailing market prices, with an aggregate offering value of up to $50,000 through the facilities of the Nasdaq Capital Market. During the three months ended March 31, 2026, we sold 7,446,574 common shares for gross proceeds of $7,861 at an average price of $1.06 per share. We received net proceeds of $7,614 after issuance costs of $247 (including commissions of $236 ). This ATM agreement was terminated on March 21, 2026.
On August 2, 2024, we entered into an ATM offering agreement with Cantor Fitzgerald & Co, which allowed us to issue common shares, at prevailing market prices, with an aggregate offering value of up to $50,000 over a 25-month period through the facilities of the Nasdaq Capital Market. During the three and nine months ended September 30, 2025, we sold 3,872,394 and 12,441,368 , common shares for gross proceeds of $3,242 and $9,392 , at an average price of $0.84 and $0.75 , per share, respectively. For the same three and nine months ended, we received net proceeds of $3,089 and $9,018 , after issuance costs of $153 and $374 (including commissions of $97 and $282 ). This ATM agreement was terminated on August 22, 2025.
Consultant Services Shares Issued
During the three and nine months ended September 30, 2026, we issued 750,000 and 2,050,000 common shares to consultants valued at $678 and $1,839 , respectively, or a weighted-average price of $0.90 1,951,699 1,985 1.02 736 and $2,123 , respectively, related to consultant services. For the three and nine months ended September 30, 2025, we recognized stock-based compensation expense of $1,658 related to consultant services.
12
ONCOLYTICS BIOTECH INC.
Notes to the Condensed Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share amounts and where indicated)
As of September 30, 2026 and December 31, 2025, we had nil and $283 , respectively, recorded in prepaid expenses related to services not yet performed.
Compensation Warrants
In consideration of the services rendered by the underwriter as part of a public offering in 2023, we issued 536,693 compensation warrants. Each compensation warrant is exercisable into one common share at an exercise price of $2.25 up to 60 months from the date of issuance. At the issuance date, we used the Black-Scholes Model to estimate the fair value of the services rendered. The resulting fair value was included as part of the public offering transaction costs, and was allocated to share issue costs and operating expenses based on the relative fair values of the common share and warrant of each unit issued. As of September 30, 2026 and December 31, 2025, there were 536,693
Warrants
Following the change in functional currency on January 1, 2026, warrants issued in 2023 pursuant to an underwritten public offering no longer met liability classification and as such were reclassified as equity at that date. The warrants have an exercise price denominated in U.S. dollars and are indexed to our stock because of the change in functional currency.
Each warrant entitles the holder to purchase one common share at an exercise price of $2.81 up to 60 months from the date of issuance. The expiration of the warrants may be accelerated by us at any time prior to the expiration date if the volume weighted-average price of the issued and outstanding common shares on the Nasdaq Stock Market is greater than $6.50 for any 20 consecutive trading days, at which time we may, within 10 business days, accelerate the expiration date by issuing a press release announcing the reduced warrant term whereupon the warrants will expire on or after the 75 th calendar day after the date of such press release. As of September 30, 2026 and December 31, 2025, there were 7,667,050
Common Shares reserved for future issuance are as follows:
| September 30, 2026 | |||||
| Common shares issuable upon exercise of employee and non-employee stock options | |||||
| Common shares issuable upon vesting and settlement of restricted stock units | |||||
| Common shares issuable upon vesting and settlement of Inducement Share Awards | |||||
| Common shares available for grant under the 2026 Incentive Award Plan | |||||
| Common shares issuable upon exercise of warrants | |||||
| Total | |||||
Note 7: Stock-Based Compensation
Amended and restated Stock Option and Incentive Share Award Plans
Our amended and restated Stock Option Plan and Share Award Plan (collectively, the “Equity Incentive Plans”) were approved
by our shareholders on May 9, 2023. The Equity Incentive Plans provide for the grant of stock options, restricted share unit awards and performance share unit awards to our employees, consultants and directors. Upon the effective date of the 2026 Plan described below, we ceased granting awards under the Equity Incentive Plans, but any awards granted under the Equity Incentive Plans will remain subject to the terms of the applicable plan.
2026 Incentive Award Plan
The 2026 Incentive Award Plan (the “2026 Plan”) was approved by our shareholders at a Special Meeting of Shareholders held on January 15, 2026 and became effective on March 31, 2026. The 2026 Plan provides for the grant of options, including incentive stock options and nonqualified stock options, restricted stock, dividend equivalents, restricted stock units (“RSUs”), performance shares, other incentive awards, stock appreciation rights and cash awards, to our employees, consultants and directors.
The number of shares reserved for issuance under the 2026 Plan equals the sum of (i) 6,500,000 shares; (ii) any shares that remain available under the prior Equity Incentive Plans; (iii) any shares that are subject to awards under the prior Equity Incentive Plans which are forfeited or lapse unexercised and which are not issued under the prior Equity Incentive Plans; and (iv) an annual increase on the first day of each calendar year beginning January 1, 2027 and ending on and including January 1,
13
ONCOLYTICS BIOTECH INC.
Notes to the Condensed Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share amounts and where indicated)
2036, equal to the lesser of (A) 6 % of the aggregate number of shares outstanding on the final day of the immediately preceding calendar year and (B) such smaller number of shares as is determined by the Board or the compensation committee.
Inducement Equity Awards
We have granted inducement equity awards to certain of our key executives. These awards included stock options subject to a service condition, performance-based stock options (collectively, the “Inducement Stock Options”), and performance-based restricted share award units (“Inducement Share Awards”). The grants were made as a material inducement to employment in accordance with Nasdaq Listing Rule 5635(c)(4), and therefore did not require shareholder approval.
Stock-Based Compensation Expense
Our stock-based compensation expense was as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Stock-based compensation expense: | ||||||||||||||||||||||||||
| Pursuant to Equity Incentive Plans and Inducement Equity Awards | $ | $ | $ | $ | ||||||||||||||||||||||
| Pursuant to consulting service agreements | ||||||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
| Stock-based compensation expense in operating expenses: | ||||||||||||||||||||||||||
| Research and development | $ | $ | $ | $ | ||||||||||||||||||||||
| General and administrative | ||||||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
Stock Options
Our stock option activity for the nine months ended September 30, 2026 was as follows:
| Stock options subject only to a service condition | ||||||||||||||||||||||||||
| Number Outstanding | Weighted- Average Exercise Price (i) | Aggregate Intrinsic Value | Weighted- Average Remaining Contractual Life (in years) | |||||||||||||||||||||||
| Outstanding at December 31, 2025 | $ | $ | ||||||||||||||||||||||||
| Granted (ii) | $ | |||||||||||||||||||||||||
| Forfeited | ( | $ | ||||||||||||||||||||||||
| Expired | ( | $ | ||||||||||||||||||||||||
Outstanding at September 30, 2026 (iii) | $ | $ | ||||||||||||||||||||||||
Vested and exercisable at September 30, 2026 | $ | $ | ||||||||||||||||||||||||
i.The weighted-average exercise prices reflect the conversion of Canadian dollar denominated stock options translated into U.S. dollars using the applicable foreign exchange rate as of the date of grant. ii.Includes iii.Includes | ||||||||||||||||||||||||||
14
ONCOLYTICS BIOTECH INC.
Notes to the Condensed Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share amounts and where indicated)
| Stock options subject to a performance condition | ||||||||||||||||||||||||||
| Number Outstanding | Weighted- Average Exercise Price (i) | Aggregate Intrinsic Value | Weighted- Average Remaining Contractual Life (in years) | |||||||||||||||||||||||
| Outstanding at December 31, 2025 | $ | $ | ||||||||||||||||||||||||
Outstanding at September 30, 2026 (ii) | $ | $ | ||||||||||||||||||||||||
Vested and exercisable at September 30, 2026 | $ | $ | — | |||||||||||||||||||||||
i.The weighted-average exercise prices reflect the conversion of Canadian dollar denominated stock options translated into U.S. dollars using the applicable foreign exchange rate as of the date of grant. ii.Includes | ||||||||||||||||||||||||||
As of September 30, 2026, unrecognized compensation expense related to unvested stock options was $5,389 . These costs are expected to be recognized over a remaining weighted-average period of 1.6 years.
Stock option grants subject only to a service condition typically vest either immediately or annually over periods ranging from to 3 years. The performance-based Inducement Stock Options will vest upon generating a minimum of $25,000 in cumulative proceeds from new financing transactions after June 11, 2025. As of September 30, 2026, the performance condition continues to be probable and compensation expense has been recognized based on our estimate of the derived service period.
We use the Black-Scholes Model to estimate fair value. We use historical data to estimate the expected dividend yield and expected volatility of our stock in determining the fair value of the stock options. The risk-free interest rate is based on the U.S. Treasury rate applicable to the expected life of the award. The expected term of options is estimated considering the vesting period at the grant date, the contractual life of the options, and the average length of time similar grants have remained outstanding in the past. The expected dividend yield is zero , as we do not expect to pay dividends for the foreseeable future.
The fair value of options granted during the nine months ended September 30, 2026 was determined using the following weighted-average assumptions:
| Risk-free interest rate | ||||||||
| Expected life (years) | ||||||||
| Expected volatility | % | |||||||
| Expected dividend yield | ||||||||
| Weighted-average grant date fair value | $ | |||||||
Liability-Classified Stock Options
As discussed in note 3, certain employee stock options previously classified as equity were reclassified as liabilities, effective January 1, 2026. The related stock option liability is measured at fair value on a recurring basis and is classified within Level 3 of the fair value hierarchy.
15
ONCOLYTICS BIOTECH INC.
Notes to the Condensed Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share amounts and where indicated)
The fair value of the liability-classified options as of September 30, 2026 and January 1, 2026 was determined using the following weighted-average assumptions:
| September 30, 2026 | January 1, 2026 | |||||||||||||
| Risk-free interest rate | % | % | ||||||||||||
| Expected life (years) | ||||||||||||||
| Expected volatility | % | % | ||||||||||||
| Expected dividend yield | % | % | ||||||||||||
| Weighted-average fair value | $ | $ | ||||||||||||
| Number of liability-classified stock options outstanding | ||||||||||||||
A summary of the stock option liability for the nine months ended September 30, 2026 was as follows:
| Stock option liability | ||||||||
Balance at December 31, 2025 | $ | |||||||
| Reclassification of liability from equity | ||||||||
| Stock-based compensation expense | ||||||||
| Fair value adjustment of liability to APIC | ( | |||||||
Balance at September 30, 2026 | $ | |||||||
RSUs
Our RSU activity for the nine months ended September 30, 2026 was as follows:
| Number of RSUs | Weighted- Average Grant Date Fair Value (i) | |||||||||||||
Outstanding at December 31, 2025 | $ | |||||||||||||
| Vested and released | ( | $ | ||||||||||||
| Forfeited | ( | $ | ||||||||||||
Outstanding at September 30, 2026 | $ | |||||||||||||
i.The weighted-average grant date fair value prices reflect the conversion of Canadian dollar denominated RSUs translated into U.S. dollars using the applicable foreign exchange rate as of the date of grant. | ||||||||||||||
As of September 30, 2026, unrecognized compensation expense related to non-vested RSUs was $50 . These costs are expected to be recognized over a remaining weighted-average period of 0.6 year.
Inducement Share Awards
16
ONCOLYTICS BIOTECH INC.
Notes to the Condensed Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share amounts and where indicated)
Note 8: Net Loss Per Share
The following table shows the calculation of net loss per share:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Numerator: | ||||||||||||||||||||||||||
| Net loss - basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
| Denominator: | ||||||||||||||||||||||||||
| Weighted-average common shares outstanding used to compute basic and diluted net loss per share | ||||||||||||||||||||||||||
| Net loss per share, basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
The amounts in the table below were excluded from the calculation of diluted net loss per share due to their anti-dilutive effect:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Outstanding warrants | ||||||||||||||||||||||||||
| Outstanding stock options | ||||||||||||||||||||||||||
| Outstanding RSUs and Inducement Share Awards | ||||||||||||||||||||||||||
Note 9: Contract Liability
We entered into a licensing agreement (the “Licensing Agreement”) with Adlai Nortye Biopharma Co., Ltd. (“Adlai”). Under the terms of the Licensing Agreement, Adlai will have exclusive development and commercialization rights to pelareorep in China, Hong Kong, Macau, Singapore, South Korea, and Taiwan. Pursuant to the Licensing Agreement, we are entitled to receive upfront license fees, development and regulatory milestone payments, royalties, and sales-based milestone payments.
Our contract liability balance at September 30, 2026 and December 31, 2025, which we expect to record in revenue over the next five years , was as follows:
| September 30, 2026 | December 31, 2025 | |||||||||||||
| Balance, beginning of period | $ | $ | ||||||||||||
| Foreign exchange impact | ||||||||||||||
| Balance, end of period | $ | $ | ||||||||||||
Note 10: Commitments and Contingencies
Indemnification of Officers and Directors
Our corporate bylaws require that, except to the extent expressly prohibited by law, we will indemnify our 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 us. The bylaws provide no limit to the amount of the indemnification. We have purchased directors’ and officers’ 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. We believe that we have adequate insurance coverage, however, there is no guarantee that all indemnification payments will be covered under our existing insurance policies.
There is no pending litigation or proceeding involving any of our officers or directors as to which indemnification is being sought, nor are we aware of any threatened litigation that may result in claims for indemnification.
17
ONCOLYTICS BIOTECH INC.
Notes to the Condensed Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share amounts and where indicated)
Commitments
Note 11: Segment Information
We manage our operations as a single reportable and operating segment for the purposes of assessing performance and making operating decisions. Our chief operating decision maker (“CODM”) is made up of our Chief Executive Officer and Chief Financial Officer. The CODM assesses performance and manages and allocates resources on a total company basis. Further, the CODM reviews and utilizes functional expenses at the consolidated level to manage our operations. The measure of segment assets is reported on the consolidated balance sheets as total assets.
The following table provides information about our single segment:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||||
| Significant components of research and development (R&D) expenses: | ||||||||||||||||||||||||||
| Clinical trial expenses | $ | $ | $ | $ | ||||||||||||||||||||||
| Manufacturing and related process development expenses | ||||||||||||||||||||||||||
| Personnel-related expenses | ||||||||||||||||||||||||||
| Significant components of general and administrative (G&A) expenses: | ||||||||||||||||||||||||||
| Public company-related expenses | ||||||||||||||||||||||||||
| Personnel-related expenses | ||||||||||||||||||||||||||
| Intellectual property expenses | ||||||||||||||||||||||||||
| All other R&D and G&A expenses | ||||||||||||||||||||||||||
| Total operating expenses | ||||||||||||||||||||||||||
| Loss from operations | ( | ( | ( | ( | ||||||||||||||||||||||
| Total other income (expense), net | ( | ( | ||||||||||||||||||||||||
| Income tax recovery (expense) | ( | |||||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Note 12: Subsequent Events
From October 1, 2026 to November 13, 2026, we sold 3,633,301 common shares pursuant to the Sales Agreement, for gross proceeds of $1,705 at an average price of $0.47 per share. We received net proceeds of $1,654 after commissions of $51 .
On November 13, 2026, we received the final payment of $1,175 under the Therapeutic Accelerator Award grant from PanCAN.
18
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read together with our condensed consolidated financial statements and related notes included elsewhere in this quarterly report and our audited financial statements and related notes included in our annual report on Form 10-K for the year ended December 31, 2025 . The following discussion contains forward-looking statements that involve numerous risks and uncertainties. Our actual results could differ materially from the results described in or implied by these forward-looking statements. See “Cautionary Note Regarding Forward-Looking Statements” for additional cautionary information.
All references to the terms “we,” “our,” “us,” “the Company,” and “Oncolytics” may refer, as the context requires, to Oncolytics Biotech Inc., or collectively to Oncolytics Biotech Inc. and its subsidiaries. Unless otherwise indicated, all references to “$” and “dollars” in this management’s discussion and analysis of financial condition and results of operations mean thousands of U.S. dollars.
Company Overview
We are a clinical-stage biopharmaceutical company developing pelareorep, a well-tolerated intravenously delivered immunotherapeutic agent that selectively replicates in tumors, activates the innate and adaptive immune systems, and weakens tumor defense mechanisms. This improves the ability of the immune system to fight cancer, making tumors more susceptible to a broad range of oncology treatments.
Pelareorep is a proprietary isolate of reovirus, a naturally occurring, non-pathogenic double-stranded RNA virus commonly found in environmental waters. Pelareorep has shown promising results in changing the tumor microenvironment (“TME”). This creates a more immunologically favorable TME, making the tumor more susceptible to various treatment combinations. These treatments include chemotherapies, checkpoint inhibitors, and other immuno-oncology approaches such as CAR T therapies, bispecific antibodies, and RAS or CDK4/6 inhibitors. Pelareorep induces a new army of tumor-reactive T cells, helps these cells to infiltrate the tumor through an inflammatory process, and upregulates key inflammatory cytokines resulting in the formation of tertiary lymphoid structures and the expansion of tumor-infiltrating lymphocytes. By priming the immune system with pelareorep, we believe we can increase the proportion of patients who respond to various cancer treatments, including immunotherapies, especially in cancers where existing treatment regimens have failed or provided limited benefit.
As our clinical development program advances, we anticipate pelareorep’s ability to enhance innate and adaptive immune responses within the TME will play an increasingly important role. This greatly increases opportunities for expanding our clinical program, business development, and partnering opportunities to address gastrointestinal and human papillomavirus (“HPV”)-associated cancers in combination with various therapies. We believe this approach has the most promise for generating clinically impactful data and offers the most expeditious path to regulatory approval.
Our primary focus is to position pelareorep as a platform immunotherapy for the treatment of gastrointestinal (“GI”) and HPV-associated cancers and advance pelareorep to registration-enabled clinical studies. We are exploring opportunities for registrational studies and investigator-sponsored trials in second-line Rat Sarcoma (“RAS”)-mutant microsatellite stable (“MSS”) metastatic colorectal cancer, second-line or later anal cancer, metastatic pancreatic cancer, and HPV-associated tumors. We expect to continue discussions with strategic partners and collaborators to efficiently advance pelareorep’s development.
Going Concern
We have incurred operating losses since inception and expect to continue to incur losses for the foreseeable future as we advance the development of pelareorep and incur research and development, manufacturing, and general and administrative expenses. We do not expect to generate significant revenues unless and until pelareorep receives regulatory approval and becomes commercially viable.
As of September 30, 2026, we had cash and cash equivalents of $2,430. Based on our current operating plan, we expect that our existing cash resources, even when considered together with available capital under our equity distribution arrangements, are not sufficient to fund our planned operations for at least twelve months from the date of issuance of our condensed consolidated financial statements included in this quarterly report. These conditions raise substantial doubt about our ability to continue as a going concern.
Our ability to continue as a going concern depends on our ability to obtain additional financing to fund ongoing operations. Management has plans to raise additional capital, including through the use of our at‑the‑market equity sales agreement and potential strategic collaborations or other financing arrangements, as discussed under “Capital Requirements.” However, there
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can be no assurance that additional financing will be available when needed, on acceptable terms, or at all. If we are unable to obtain additional funding as required, we may need to reduce or delay research and development activities, scale back operations, or pursue strategic alternatives.
The accompanying condensed consolidated financial statements have been prepared on a going‑concern basis and do not include any adjustments that might result from the outcome of these uncertainties. Such adjustments could be material.
Program Development Updates and Outlook
The following are the development updates and outlook for our program for the three months ended September 30, 2026, through to the date of this quarterly report.
Clinical Trial Program
Second-line metastatic colorectal cancer (“mCRC”)
In the first quarter of 2026, we received Fast Track Designation for pelareorep in combination with bevacizumab and fluorouracil, leucovorin, irinotecan (“FOLFIRI”) for the treatment of patients with Kirsten rat sarcoma (“KRAS”)-mutant, MSS mCRC in the second-line setting. The application was supported by clinical data demonstrating a 33% objective response rate (“ORR”) for pelareorep-based therapy compared to approximately 10% ORR with standard-of-care1 in this patient population. In addition, pelareorep combination therapy was associated with a median progression-free survival of 16.6 months, compared to 5.7 months with standard-of-care2, a duration of response of 19.5 months, compared to historical benchmarks of approximately 4–6 months3 in this setting, and a median overall survival of 27 months, compared to 11.2 months with standard-of-care4.
Randomized Phase 2 second-line mCRC study – REO 033
In March 2026, we announced the launch of a randomized Phase 2 study, known as REO 033, evaluating second-line RAS-mutated (which includes KRAS) MSS mCRC patients. Patients will receive either the control arm of bevacizumab (Avastin®) and FOLFIRI or the experimental arm of pelareorep, bevacizumab, and FOLFIRI.
1 Bennouna J. Lancet Oncol (14):29-37, 2013 / Iwamoto S. Ann Oncol. Jul;26(7); 1427-33, 2015
2 Bennouna J. Lancet Oncol (14):29-37, 2023
3 FDA grants accelerated approval to adagrasib with cetuximab for KRAS G12C–mutated colorectal cancer. Published June 21, 2024. Accessed April 28, 2026. https://www.fda.gov/drugs/resources-information-approved-drugs/fda-grants-accelerated-approval-adagrasib-cetuximab-kras-g12c-mutated-colorectal-cancer
4 Bennouna J. Lancet Oncol (14):29-37, 2023
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The first study site was initiated in early April 2026 and by the end of the third quarter of 2026, substantially all planned clinical sites for Part A of REO 033 were activated and multiple patients were enrolled.
In September 2026, we aligned with the U.S. Food and Drug Administration (“ FDA”) on the concept for a potential pivotal Part B expansion of REO 033. Under the proposed regulatory strategy, Part B would build upon the ongoing randomized REO 033 study and could support a potential accelerated approval submission based on objective response rate, with progression-free survival providing the basis for potential full approval.
Throughout the third quarter of 2026, site initiations continued and enrollment activity commenced.
Squamous cell carcinoma of the anal canal (“SCAC”)
GOBLET Cohort 4
Pelareorep is being studied in combination with atezolizumab in the rare, but deadly, relapsed, unresectable SCAC indication.
In January 2026, we reported updated clinical data from patients with third-line SCAC. The data showed four of 14 evaluable third-line patients receiving pelareorep and atezolizumab achieved objective responses, resulting in an ORR of approximately 29%. These responses included two complete responses and two partial responses. The median duration of response is approximately 17 months (67 weeks), indicating both depth and durability of clinical benefit in a heavily pretreated population. In historical third-line SCAC studies, objective response rates are typically approximately 10% or less5, with limited durability. In the second-line setting, pelareorep and atezolizumab achieved a 30% ORR, more than doubling the 13.8% ORR that was approved by the FDA for the current standard of care therapy6. Enrollment in Cohort 4 has been completed and we continue to monitor patients on the study.
Potential second-line or later SCAC registrational study
We participated in a Type C meeting with the FDA in mid-April of 2026 and aligned on the design of a pivotal study in second-line or later SCAC in the U.S. The final study protocol is being finalized and is expected to be a randomized controlled trial of pelareorep and a checkpoint inhibitor, compared with a control arm, which could be sufficient for accelerated approval and full approval at different points in time within the same study.
In July 2026, the FDA granted Fast Track designation to pelareorep in combination with a checkpoint inhibitor for the treatment of patients with inoperable, locally recurrent or metastatic SCAC who have progressed on or were intolerant to one or more prior lines of systemic therapy.
Preclinical program
In September 2026, we announced data published in the Proceedings of the National Academy of Sciences show pelareorep’s ability to change an immunologically inactive liver cancer tumor microenvironment into one that is immunologically active and potentially susceptible to immune-based therapy. Pelareorep has previously shown the ability to initiate coordinated changes in the tumor microenvironment, including the formation of tertiary lymphoid structures, that are associated with improved responses to immunotherapy. In this paper, there is a noted increase in CD8+ T cells, PD-1/PD-L1 upregulation, and Inducible T cell Co-stimulator-ICOSL signaling. These are all necessary conditions for immunotherapies like checkpoint inhibitors to work in liver cancer, which is an especially challenging tumor type.
In September 2026, we announced the completion of preclinical studies evaluating pelareorep in combination with a pan-RAS inhibitor in a RAS-driven colorectal cancer model. We plan to expand our preclinical evaluation of pelareorep with RAS inhibitors across additional dosing schedules and RAS-driven tumor models. These studies will be designed to further characterize pelareorep’s contribution to the combination, including its potential impact on the depth and durability of tumor response and the development of resistance to RAS-targeted therapy.
Program development for the remainder of 2026
For the remainder of 2026, our clinical objectives will primarily revolve around our randomized second-line mCRC clinical study. We remain focused on executing REO 033, advancing activities that may support future registration-focused development opportunities, and generating clinical data to further evaluate pelareorep's potential in metastatic colorectal cancer. We are actively evaluating multiple strategic partnership options and continue to engage with collaborators, academic partners, and other stakeholders to determine the most effective path forward for pelareorep in mPDAC and second-line or later SCAC.
5 Marabelle et al. Pembrolizumab for previously treated advanced anal squamous cell carcinoma: results from the non-randomised, multicohort, multicentre, phase 2 KEYNOTE-158 study. Lancet Gastroenterol Hepatol. 2022 May;7(5):446-454. doi: 10.1016/S2468-1253(21)00382-4.
6 Rao S, et al. A phase II study of retifanlimab (INCMGA00012) in patients with squamous carcinoma of the anal canal who have progressed following platinum-based chemotherapy (POD1UM-202). ESMO Open. 2022 Aug;7(4):100529. doi: 10.1016/j.esmoop.2022.100529. Epub 2022 Jul 8
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Following the recent Fast Track designation in metastatic anal cancer, we continue to evaluate development opportunities in this indication. Preclinical objectives this year will focus on studies evaluating pelareorep in combination with a range of RAS inhibitor modalities and generating additional translational data supporting pelareorep's potential as a backbone immunotherapy.
Manufacturing and Process Development
While we currently have sufficient drug product supply to support our clinical development program, we continued our activities to expand our production capabilities as we focus on advancing our active drug substance and finished drug product towards registration and commercial readiness. In the third quarter of 2026, we completed an analytical study utilizing the human tumor cell line potency assay and progressed analytical development activities to support upcoming process characterization in preparation for process performance qualification. We also labeled and packaged additional drug product for ongoing studies, progressed preparation activities for an upcoming drug product fill and incurred storage and distribution costs to maintain our product supply. Ongoing bulk manufacturing and expanded filling capabilities are both part of the planned process validation. Process validation is required to ensure that the resulting product meets the specifications and quality standards and will form part of our submission to regulators, including the FDA, for product approval.
For the remainder of 2026, our manufacturing program will focus on preparatory activities for validation of our drug substance production process, additional drug product manufacture to support the clinical program, and supply distribution for our ongoing and planned studies.
Intellectual Property
At September 30, 2026, we had 140 patents, including 11 U.S. and 7 Canadian patents, and issuances in other jurisdictions. We have an extensive patent portfolio covering pelareorep and formulations that we use in our clinical trial program. We also have patents covering methods for manufacturing pelareorep and screening for susceptibility to pelareorep. These patent rights extend until 2044.
In June 2026, we secured a new U.S. patent covering key aspects of the methods used to manufacture pelareorep, protecting our proprietary manufacturing process and extending our patent rights until 2044. Developed through our contracted collaboration with the National Research Council of Canada (“NRC”), this jointly arising intellectual property is automatically assigned to NRC and exclusively licensed to Oncolytics, subject to a nominal royalty, for the production and commercialization of pelareorep. The patent is designed to protect the Company’s ability to consistently produce pelareorep at commercial scale and represents a significant addition to the Company’s growing intellectual property portfolio.
The Company also announced that a previously filed method-of-use patent covering pelareorep as an immunotherapy for cancer had been issued in several countries, and we expect the US issuance to occur in the near term. If issued, this method-of-use patent is expected to provide protection into the late 2040s.
We continue to analyze additional patent protections and have placed an emphasis on patent extension strategy and growing our patent portfolio. Oncolytics has three patent application families pending, including multiple method-of-use patents and is working with an academic partner on a modified form of pelareorep that could lead to a “next generation” pelareorep.
Financing Activity
On April 6, 2026, we entered into an Open Market Sale Agreement (the “Sales Agreement”) with Jefferies LLC (the “Agent”), pursuant to which we may offer and sell from time to time through or to the agent, acting as agent or principal, shares of our common stock, par value $0.001 per share, having an aggregate offering price of up to $75,000. During the three months ended September 30, 2026, we sold 6,819,647 common shares for gross proceeds of $5,405 at an average price of $0.79 per share. We received net proceeds of $5,241 after issuance costs of $163 (including commissions of $162).
From October 1, 2026 to November 13, 2026, we sold 3,633,301 common shares pursuant to the Sales Agreement for gross proceeds of $1,705 at an average price of $0.47 per share. We received net proceeds of $1,654 after commissions of $51.
On November 13, 2026, we received the final payment of $1,175 under the Therapeutic Accelerator Award grant from PanCAN.
Cash Resources
As of September 30, 2026, we had cash and cash equivalents of $2,430 (see “Liquidity and Capital Resources”).
Other Corporate Matters
In October 2025, we filed a Registration Statement on Form F-4 with the U.S. Securities and Exchange Commission (as amended by Amendment No. 1 to Form F-4, as filed on December 5, 2025) that included a management circular, prospectus and other relevant documents related to various proposals contained therein. It included plans to hold a Special Meeting of Shareholders to vote on, among other things, a series of transactions that would change the jurisdiction of Oncolytics from the
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Province of Alberta in Canada to the State of Nevada in the U.S. (the “Domestication”). On January 15, 2026, all resolutions described in this registration statement were approved by our shareholders. On March 17, 2026, as part of the Domestication process, we changed our jurisdiction of incorporation to the Province of British Columbia in Canada. On March 31, 2026, we completed the Domestication and changed our jurisdiction to the State of Nevada.
Components of Results of Operations
Research and Development Expenses (“R&D”)
Our R&D expenses consist primarily of costs incurred to conduct research and development on pelareorep, including clinical trial expenses, manufacturing and related process development expenses, personnel-related expenses, translational science expenses, and other R&D expense. Clinical trial expenses include regulatory and consulting activities, contract research organization expenses, data management expenses, and other costs associated with our clinical trial program. Manufacturing and related process development expenses include product manufacturing and process development activities. Product manufacturing expenses include third-party direct manufacturing costs, quality control testing, filling, labeling, packaging, and storage costs. Process development expenses include costs associated with studies examining components of our manufacturing and analytical processes and costs associated with planned process validation and related conformity testing. Translational science expenses are intended to expand our intellectual property related to pelareorep and identify potential licensing opportunities arising from our technology base. Personnel-related expenses include salaries and wages, stock-based compensation, and other employee-related expenses.
General and Administrative Expenses (“G&A”)
Our G&A expenses consist primarily of public company-related expenses, personnel-related expenses, intellectual property expenses, office expenses, lease expense and depreciation. Public company-related expenses include investor, media, and public relations, marketing communications, business development, financial advisory activities, legal and accounting fees, corporate insurance, transfer agent costs, and other fees relating to our U.S. and Canadian stock listings (we voluntarily delisted from the Toronto Stock Exchange in August 2025). Personnel-related expenses include salaries and wages, director fees, stock-based compensation, and other employee-related expenses. Intellectual property expenses include legal and filing fees associated with our patent portfolio. Office expenses include administrative costs associated with operating our business.
Results of Operations
Comparison of the three and nine months ended September 30, 2026 and 2025:
Net loss for the three months ended September 30, 2026 was $9,705 compared to $9,878 for the three months ended September 30, 2025. Net loss for the nine months ended September 30, 2026 was $28,390 compared to $19,866 for the nine months ended September 30, 2025.
Research and Development Expenses
Our R&D expenses increased by $71 from $5,081 for the three months ended September 30, 2025, to $5,152 for the three months ended September 30, 2026. The following table summarizes our R&D expenses for the three months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | ||||||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||||||
| Clinical trial expenses | $ | 2,297 | $ | 632 | $ | 1,665 | ||||||||||||||
| Manufacturing and related process development expenses | 574 | 2,937 | (2,363) | |||||||||||||||||
| Personnel-related expenses | 2,235 | 1,485 | 750 | |||||||||||||||||
| All other R&D expenses | 46 | 27 | 19 | |||||||||||||||||
| Total R&D expenses | $ | 5,152 | $ | 5,081 | $ | 71 | ||||||||||||||
The increase in our R&D expenses for the three months ended September 30, 2026, was primarily due to the following:
•Increased clinical trial expenses due to start-up and site activation costs for our phase 2 second-line mCRC study launched in the first quarter of 2026.
•Increased personnel-related expenses due to increased headcount.
•The above increases were offset by decreased manufacturing and related process development expenses as we substantially completed a cGMP production run and drug product fill in the third quarter of 2025.
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Our R&D expenses increased by $4,169 from $9,797 for the nine months ended September 30, 2025, to $13,966 for the nine months ended September 30, 2026. The following table summarizes our R&D expenses for the nine months ended September 30, 2026 and 2025:
| Nine Months Ended September 30, | ||||||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||||||
| Clinical trial expenses | $ | 4,100 | $ | 1,424 | $ | 2,676 | ||||||||||||||
| Manufacturing and related process development expenses | 1,494 | 3,776 | (2,282) | |||||||||||||||||
| Personnel-related expenses | 8,205 | 4,511 | 3,694 | |||||||||||||||||
| All other R&D expenses | 167 | 86 | 81 | |||||||||||||||||
| Total R&D expenses | $ | 13,966 | $ | 9,797 | $ | 4,169 | ||||||||||||||
The increase in our R&D expenses for the nine months ended September 30, 2026, was primarily due to the following:
•Increased personnel-related expenses due to increased non-cash stock-based compensation expense and increased headcount. Our non-cash stock-based compensation expense also included an adjustment to reclassify options from equity-classified to liability classified as discussed in note 3 of the condensed consolidated financial statements.
•Increased clinical trial expenses due to start-up and site activation costs for our phase 2 second-line mCRC study launched in the first quarter of 2026.
•The above increases were partly offset by lower manufacturing and related process development expenses as we substantially completed a cGMP production run and drug product fill in 2025.
General and Administrative Expenses
Our G&A expenses increased by $108 from $4,482 for the three months ended September 30, 2025, to $4,590 for the three months ended September 30, 2026. The following table summarizes our G&A expenses for the three months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | ||||||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||||||
| Public company-related expenses | $ | 2,957 | $ | 3,205 | $ | (248) | ||||||||||||||
| Personnel-related expenses | 1,316 | 864 | 452 | |||||||||||||||||
| Intellectual property expenses | 136 | 237 | (101) | |||||||||||||||||
| All other G&A expenses | 181 | 176 | 5 | |||||||||||||||||
| Total G&A expenses | $ | 4,590 | $ | 4,482 | $ | 108 | ||||||||||||||
The increase in our G&A expenses for the three months ended September 30, 2026 was primarily due to the following:
•Increased personnel-related expenses due to increased non-cash stock-based compensation expense and increased headcount.
•The above increase was partly offset by decreased public company-related expenses. The decrease was due to lower non-cash stock-based compensation expense for consulting services offset by increased investor relations activities.
Our G&A expenses increased by $4,998 from $9,438 for the nine months ended September 30, 2025, to $14,436 for the nine months ended September 30, 2026. The following table summarizes our G&A expenses for the nine months ended September 30, 2026 and 2025:
| Nine Months Ended September 30, | ||||||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||||||
| Public company-related expenses | $ | 9,341 | $ | 5,985 | $ | 3,356 | ||||||||||||||
| Personnel-related expenses | 3,917 | 2,489 | 1,428 | |||||||||||||||||
| Intellectual property expenses | 587 | 429 | 158 | |||||||||||||||||
| All other G&A expenses | 591 | 535 | 56 | |||||||||||||||||
| Total G&A expenses | $ | 14,436 | $ | 9,438 | $ | 4,998 | ||||||||||||||
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The increase in our G&A expenses for the nine months ended September 30, 2026 was primarily due to the following:
•Increased public company-related expenses due to higher investor relations activities and legal, tax, audit and accounting professional fees related to the Domestication. Our public company-related expenses for the nine months ended September 30, 2026 and 2025 included non-cash stock-based compensation expense for consulting services of $1,614 and $1,366, respectively.
•Increased personnel-related expenses due to increased non-cash stock-based compensation expense and increased headcount.
•Increased intellectual property expenses related to executing our patent extension strategy and new patent applications.
Liquidity and Capital Resources
As of September 30, 2026 and December 31, 2025, we had cash and cash equivalents as follows:
| September 30, 2026 | December 31, 2025 | |||||||||||||
| Cash and cash equivalents | $ | 2,430 | $ | 5,202 | ||||||||||
We have no debt other than accounts payable and accrued liabilities and operating lease liabilities. We have commitments relating to completing our research and development of pelareorep.
Cash Flows
The following table summarizes our cash flows for the periods indicated:
| Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Operating activities | $ | (22,346) | $ | (13,681) | ||||||||||
| Investing activities | (13) | (5) | ||||||||||||
| Financing activities | 19,626 | 11,366 | ||||||||||||
| Effect of exchange rate changes on cash | (39) | 114 | ||||||||||||
| Total increase (decrease) in cash and cash equivalents | $ | (2,772) | $ | (2,206) | ||||||||||
Cash used in operating activities
The increase in net cash used in operating activities reflects reflects higher operating activities and unfavorable working capital movements in 2026, partly offset by higher non-cash expenses. Overall, net cash used in operating activities for the nine months ended September 30, 2026 and 2025 was primarily related to the funding of our research and development activities, including personnel-related expenses, manufacturing and clinical trial costs, and other costs associated with general and administrative expenses.
Net cash used in operating activities for the nine months ended September 30, 2026 consisted of a net loss of $28,390 and non-cash working capital changes of $1,669, partially offset by non-cash adjustments of $7,713. Non-cash items primarily included stock-based compensation expense and the value of shares issued for consulting services. Non-cash working capital changes were primarily driven by increases in prepaid expenses and other receivables, including amounts related to the PanCAN Therapeutic Accelerator Award.
Net cash used in operating activities for the nine months ended September 30, 2025 consisted of a net loss of $19,866, offset by non-cash adjustments of $5,550, and non-cash working capital changes of $635. Non-cash working capital changes mainly reflected increased accounts payable and decreased other liabilities.
Net cash used by investing activities
Net cash used by investing activities for the nine months ended September 30, 2026 and 2025 were related to the acquisition of property and equipment.
Net cash provided by financing activities
Net cash provided by financing activities during the nine months ended September 30, 2026 consisted of net proceeds from sales of our common shares pursuant to ATM offering agreements. Net cash provided by financing activities during the nine months ended September 30, 2025 consisted of net proceeds from sales of our common shares pursuant to our ATM and SEPA arrangements.
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Capital Requirements
As a clinical‑stage biopharmaceutical company, we have not been profitable since inception and do not expect to generate significant revenues unless and until pelareorep receives regulatory approval and becomes commercially viable. We expect to continue to incur operating losses as we advance pelareorep through clinical development and incur costs associated with manufacturing, intellectual property protection, and operating as a public company. Historically, we have funded our operations primarily through the issuance of equity securities, including public offerings, at‑the‑market equity programs, and the exercise of warrants.
Our near‑term capital requirements are driven primarily by the advancement of our second‑line metastatic colorectal cancer and second‑line or later squamous cell carcinoma of the anal canal programs, as well as ongoing manufacturing readiness activities and general corporate costs. Conducting clinical trials necessary to obtain regulatory approval is costly and time‑consuming, and the timing and cost required to complete such trials are inherently uncertain. As a result, we are unable to predict with certainty the duration or total costs of our research and development programs or when, if ever, we may generate revenues from the commercialization of pelareorep.
As discussed under “Going Concern,” our current cash resources are not sufficient to fund planned operations for at least twelve months from the date of issuance of our condensed consolidated financial statements included in this quarterly report. To support our near‑term liquidity needs, we have access to capital through the Sales Agreement with the Agent, which provides flexibility to raise capital opportunistically and manage our cash resources. We expect to continue to utilize this equity distribution arrangement as appropriate to support ongoing operations; however, there can be no assurance that sufficient capital will be available under this or other arrangements on acceptable terms or at all.
Our future capital requirements beyond the near term will depend on several factors, including the timing, scope, and results of our clinical trials; regulatory interactions and outcomes; the costs associated with manufacturing process validation and supply; potential partnerships or collaborations; and broader market conditions. Although our Board of Directors reviews and approves our annual budget and multi‑year operating plans, actual funding requirements may differ materially from our expectations due to the inherent risks and uncertainties associated with drug development.
To fund our operations beyond the near term, we expect to seek additional capital through the sale of equity securities, strategic collaborations, licensing arrangements, or other financing sources. Additional financings may result in dilution to existing shareholders, and any debt or collaborative financing, if available, may include terms that restrict our operating flexibility or require us to relinquish rights to pelareorep or future revenues. If we are unable to obtain additional financing when required, we may need to reduce or delay certain development activities, pursue strategic alternatives, or take other measures to conserve capital.
For the nine months ended September 30, 2026, we raised net cash proceeds of $19,626 from the issuance of 22,125,580 common shares through our ATM offering agreement.
We are not subject to externally imposed capital requirements, and there have been no changes in how we define or manage our capital in 2026.
Contractual Obligations and Commitments
As of September 30, 2026, our contractual obligations are comprised primarily of our accounts payable, accrued liabilities and operating lease obligations. In addition, we are committed to payments of approximately $144 for activities mainly related to our manufacturing program, which are expected to occur over the next year. The ultimate amount and timing of these payments are subject to changes in our research and development plan.
As of September 30, 2026, we had not entered into any off-balance sheet arrangements.
Critical Accounting Policies and Estimates
There have been no material changes to our critical accounting policies and estimates from those disclosed in “Part II. Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates,” included in our annual report on Form 10-K for the fiscal year ended December 31, 2025, except for a change in the Company’s functional currency from the Canadian dollar to the U.S. dollar, effective January 1, 2026.
Functional and Reporting Currency
Management uses its judgment to determine the functional currency that most accurately represents the economic effects of the underlying transactions, events and conditions and considered various factors including the currency of future expenditures and
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the currency in which funds from financing activities are generated. A company’s functional currency is only changed when significant changes in economic facts and circumstances indicate clearly that the functional currency has changed.
Effective January 1, 2026, the functional currency of Oncolytics Biotech Inc. and its subsidiary, Oncolytics Biotech (Barbados) Inc. was changed to the United States (U.S.) dollar (“USD”) from the Canadian dollar. The change was made to reflect that U.S. dollars has become the currency of the primary economic environment in which the Company operates, accounting for a significant part of the Company’s labor, operations and financing.
The change in functional currency was accounted for prospectively in accordance with ASC 830 – Foreign Currency Matters. Accordingly, translated balances at December 31, 2025 became the new accounting basis at January 1, 2026. Results of operations prior to the change were not restated.
Smaller Reporting Company Status
We are a “smaller reporting company” as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We may continue to be a smaller reporting company if either (i) the market value of our shares held by non-affiliates is less than $250 million as of the last business day of the most recently completed second fiscal quarter or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our shares held by non-affiliates was less than $700 million as of the last business day of the most recently completed second fiscal quarter.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a smaller reporting company, we are not required to provide disclosure pursuant to this Item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered in this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of such period to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the three months ended September 30, 2026 that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may be involved in legal proceedings, claims and litigation arising in the ordinary course of business, including contract disputes, employment matters and intellectual property disputes. We are not currently party to any material legal proceedings or claims outside the ordinary course of business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
ITEM 1A. RISK FACTORS
There have been no material changes from the risk factors previously disclosed in Part I, Item 1A, “Risk Factors”of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, except as set forth below.
Our failure to maintain compliance with Nasdaq’s continued listing requirements could result in the delisting of our common stock.
On July 20, 2026, we received a letter from the Listing Qualifications Staff of the Nasdaq Stock Market, LLC (“Nasdaq”) indicating that, based upon the closing bid price of our common stock for the last 30 consecutive business days, we are not in compliance with the requirement to maintain a minimum bid price of $1.00 per share for continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Notice”). We were provided a compliance period of 180 calendar days from the date of the Notice, or until January 15, 2027, to regain compliance with the minimum closing bid requirement, pursuant to Nasdaq Listing Rule 5810(c)(3)(A).
We will continue to monitor the closing bid price of our common stock and seek to regain compliance with all applicable Nasdaq requirements within the allotted compliance periods and may, if appropriate, consider available options, including implementation of a reverse stock split of our common stock, to regain compliance with the minimum closing bid requirement. If we seek to implement a reverse stock split in order to remain listed on Nasdaq, the announcement or implementation of such a reverse stock split could negatively affect the price of our common stock. If we do not regain compliance within the allotted compliance periods, including any extensions that may be granted by Nasdaq, Nasdaq will provide notice that our common stock will be subject to delisting. We would then be entitled to appeal that determination to a Nasdaq hearings panel. There can be no assurance that we will regain compliance with the minimum bid price requirement during the 180-day compliance period or maintain compliance with the other Nasdaq listing requirements. A delisting could substantially decrease trading in our common stock, adversely affect the market liquidity of our common stock as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws, adversely affect our ability to obtain financing on acceptable terms, if at all, and may result in the potential loss of confidence by investors, suppliers, customers and
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employees and fewer business development opportunities. Additionally, the market price of our common stock may decline further and stockholders may lose some or all of their investment.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Rule 10b5-1 Plan and Non-Rule 10b5-1 Trading Arrangement Adoptions, Terminations, and Modifications
During the quarterly period ended September 30, 2026, none of our directors or “officers” (as defined in Rule 16a-1(f) under the Exchange Act) adopted terminated
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ITEM 6. EXHIBITS
The documents listed below are incorporated by reference or filed or furnished with this quarterly report on Form 10-Q:
| EXHIBIT NUMBER | DESCRIPTION | |||||||
| 3.1 | Articles of Domestication of Oncolytics Biotech Inc. (incorporated by reference to Exhibit 3.1 of the registrant’s Current Report on Form 8-K (File No. 001-38512) filed with the SEC on April 1, 2026). | |||||||
| 3.2 | Articles of Incorporation of Oncolytics Biotech Inc. (incorporated by reference to Exhibit 3.2 of the registrant’s Current Report on Form 8-K (File No. 001-38512) filed with the SEC on April 1, 2026). | |||||||
| 3.3 | Bylaws of Oncolytics Biotech Inc. (incorporated by reference to Exhibit 3.3 of the registrant’s Current Report on Form 8-K (File No. 001-38512) filed with the SEC on April 1, 2026). | |||||||
| 31.1* | Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 31.2* | Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32.1** | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32.2** | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Schema Calculation Linkbase Document. | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Schema Definition Linkbase Document. | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Schema Label Linkbase Document. | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Schema Presentation Linkbase Document. | |||||||
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and included in Exhibit 101). | |||||||
| * | Filed herewith. | |||||||
| ** | Furnished herewith. | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| ONCOLYTICS BIOTECH INC. | |||||||||||
| Registrant | |||||||||||
Date: November 13, 2026 | By: | /s/ Jared Kelly | |||||||||
| Jared Kelly | |||||||||||
| Chief Executive Officer | |||||||||||
| (Principal Executive Officer) | |||||||||||
Date: November 13, 2026 | By: | /s/ Kirk Look | |||||||||
| Kirk Look, CA | |||||||||||
| Chief Financial Officer | |||||||||||
| (Principal Financial and Accounting Officer) | |||||||||||
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