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BIOALBERTA ANNUAL REPORT 2012

The life sciences industry is an integral part of the world stage and will have a major impact on all sectors of the global economy. As we all know, however, success is usually achieved on an incremental basis, propelling our companies and technologies forward to the next stage. Even through the economic downturn and financial challenges, our sector continues to gain momen-tum. Of course, some members have experienced company and product setbacks, but on the whole, the industry is achieving milestones along the path to market. This year’s annual report highlights the concept that milestones provide that forward momentum. During this last fiscal year we saw a number of major milestones achieved by stakeholders throughout the life science continuum. Here are a few examples:

Industry• The medical product and diagnostic sector continues to attract interest from investors and buyers. Companies like Innovative Trauma Care Inc., Exciton Technologies Inc., and Circle Cardiovascular Inc. achieved major milestones in 2011/2012. Funding programs like the Medical Product Development Program (MPDP) have allowed us to help our members along the product development path.

Government• The BioAlberta Policy Committee has been working for the past few years to influence change to the provincial Scientific Research and Experimental Development (SR&ED) tax credit system. We were very pleased to see this change implemented in the 2012 Government of Alberta budget, which announced that the “grind” will be eliminated from the provincial SR&ED system. This change has the potential to add up to $100,000 to our member company’s refundable tax credit. A great team effort!

Putting Alberta on the Map• In September of 2013, Calgary will be host to the world for the Agricultural Biotechnology International Conference (ABIC 2013). BioAlberta is pleased to be working with Alberta Innovates BioSolutions and AVAC Ltd as cohosts for this international conference. Plan to be there! www.abic.ca/abic2013

I hope you will continue reading in order to explore our Milestones=Momentum theme and how BioAlberta is working on behalf of you – the membership.

Best regards,

Ryan RadkePresident

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TABLE OF CONTENTS

MESSAGE FROM THE PRESIDENT

MESSAGE FROM THE CO-CHAIRS

ADVOCATE

MARKET

DEVELOP

FINANCIAL STATEMENTS

BIOALBERTA MEMBERSHIP LIST

BIOALBERTA BOARD OF DIRECTORS

BIOALBERTA STAFF

BIOALBERTA CONSULTANTS



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Today, BioAlberta is the gathering point for more than 140 individual and company members, representing an industry of more than 16,000 employees in our province. The continued momen-tum and success of our life sciences industry depends on the interaction and involvement of our members and our association. We know that our strength comes from our external stakeholder base as well as those who will ultimately benefit from this sector’s products and technologies. As the organizing hub for life sciences in the province, BioAlberta represents this fast growing and exciting industry sector using our core skills of advocacy, promotion and industry development. This we believe is critical to ensuring a robust and growing biotechnology community in Canada. We are proud to be our industry’s public voice, and equally proud to represent our province in the many key provincial, national and international events that reinforce the Alberta brand.

On behalf of the Board of Directors we thank our membership for your ongoing commitment to our association. This has been a great year with many successes that validate the focus and drive of a committed membership. We look forward to working with you, as we build on this foundation heading into 2013!

Dr. David CoxCo-chair

Mr. Rick SmithCo-chair



PC Leadership Networking Breakfast with Gar y Mar (Calgar y) and Doug Horner (Edmonton)

BioAlberta, along with the Alberta ICT Council, hosted “Meet the PC Leadership Candidates” events both in Calgary and Edmonton. The event provided the opportunity to interact with the potential future provincial leaders while promoting innovation and the sector’s importance to Alberta’s future economic success.—

Targeted Government Depar tmental Outreach:

BioAlberta Policy Committee member with Doug Horner in Edmonton

ADVOCATE ADVOCATE

BioAlberta Policy Committee meeting

Pol icy Committee

The Policy Committee was created to stren-gthen BioAlberta’s government advocacy role in the evolving policy environment in Alberta.

In preparation for the PC leadership race, BioAlberta’s Policy Committee formalized its advocacy platform into a document outlining four main themes. This document outlines the key elements that, when followed through on, could potentially contribute to a more competi-tive environment for the life sciences industry in Alberta.—

MILESTONE=MOMENTUM

ELIMINATION OF THE GRIND

After many years of highlighting an issuespecific only to Alberta, BioAlberta wasencouraged to see that the 2012 provincialbudget moved to improve SR&ED taxcredits by eliminating the “The Grind”.

• Agriculture and Rural Development• Enterprise and Advanced Education• International and Intergovern- mental Relations• Treasury Board and Finance

• Health• Energy• Environment and Sustainable Resource Development• Education—

BIOALBERTA ANNUAL REPORT 2012MILESTONES = MOMENTUM 0706

MILESTONES=MOMENTUM

2012 CANADIAN LEADERS

“Over the past decade the team lead-ership, business insights and passion of Ryan Radke for the development of the biotechnology in Alberta has provided a role model across Canada and internationally. The industry has seen Ryan’s entrepreneurial flair secure a national and international profile for the excellence of his indi-vidual members and the BioAlberta association.” Fred Haynes, Publisher, Canadian Biotechnology Industry Guide 2012

MILESTONES=MOMENTUM

INCREASED MARKET EXPOSURE

This year, BioAlberta expanded its circulation and over 11,000 copies of our annual industry publication were distributed to Globe and Mail subscribers in Edmonton and Calgary.

BIOZINE 2012

BIOZINE 2012 made its public debut in May and featured Alberta’s emerging medical technology sector. It was distrib-uted at key industry tradeshows and conferences, to Canadian embassies and trade offices, and to influential elected officials, investors and business leaders.—

Life Sciences in Alber ta ,State of the Industr y 2011

Released in September, “Life Sciences in Alberta, State of the Industry 2011” reviewed the current status and trends related to the nature, health and prospects of life sciences companies in Alberta. This report is routinely used by both local govern-ment, and also external groups interested in doing business with members of the life sciences sector, as a respected and consistent resource for industry intelligence.—

MARKET

Publ icat ions


AdvaMed 2011 , Washington

AdvaMed’s annual conference is the leading MedTech event for global CEOs, business execu-tives, policy-makers, financiers, media, and industry stakeholders. AdvaMed 2011 saw BioAlberta host its inaugural Alberta dinner and reception focused on providing a venue for Alberta attend-ees to network with key industry guests.—

Incoming ChineseDelegat ion

With tremendous business opportunities, a rapidly growing, emerging market and quickly advancing science and technology, China is fast becoming one of the most important forces in the global life sciences landscape. In October 2011, BioAlberta, along with Alberta Advanced Education and Technol-ogy, hosted a delegation from the Province of Heilongjiang, China. The Alberta-Heilongjiang Industry Roundtable events, in both Calgary and Edmonton, brought together over 80 industry, research institution and govern-ment representatives, providing collaborative and business development opportunities and potential access to the Chinese market for Alberta’s biotechnology industry.—

BioAlber ta AGM and Awards Gala 2011

Celebrating its 12th anniversary, in what has become Alberta’s Life Sciences premier event of the year, BioAlberta’s Annual AGM and Awards Gala was held at the Fairmont Hotel Macdonald in Edmonton. Over 140 key play-ers and industry stakeholders from the life sciences community attended the evening of awards recognition and the “New Faces of the Future” panel presentation.

Highlights:• Keynote address from the Honourable Greg Weadick, Minister of Advanced Education and Technology.• “New Faces of the Future” panel: - Best Environmental Technologies Inc. - Angeltear Solutions Inc. - Visual Genomics Centre• 2011 Scientific Achievement and Innovation Award – SinoVeda Canada Inc.• 2011 Company of the Year Award – KMT Hepatech Inc.• 2011 IBO Marketing Grant – SmileSonica Inc.—

“ Is Your Success Dependent on a Healthy Innovat ion System?”

The life sciences industry in Alberta is still nascent but imperative to the province’s economic diversification. In conjunction with Edmonton Economic Development Corporation, Rx&D and TEC Edmonton, BioAlberta presented a breakfast event to further discuss this topic, led by senior execu-tives from the Centre for Drug Research and Development and DynaLIFEDX, with a for-warding address by The Honourable Minister Greg Weadick, Minister of Advanced Educa-tion and Technology.—

National Biotechnology Week 2011

National Biotechnology Week’s focus has always been to celebrate and create an awareness with regard to Canadian biotechnology excellence. As such, BioAlberta and Deloitte launched the “Life Sciences in Alberta, State of the Industry 2011” report at this year’s event in Edmonton. TechRev Innovators, supported by BioAlberta, presented the Top 10 Innovators in the Advanced Technology sector at an event in Calgary, attracting over 300 attendees.—

Networking event hosted by BioAlberta at AdvaMed 2011

Networking at the AGM and Awards Gala 2011

Keynote address from Minister Weadick Gala dinner

“New Faces of the Future” panel

MARKET MARKET

Major Events and Conferences


MARKET MARKET

B ioPar tner ing Nor th America (BPN) 2012

Now in its 10th year, BPN continued to focus on facilitating close ties with U.S., Canadian and European life sciences companies with industry leaders from Asia. BioAlberta, a co-host of BPN, held its 5th annual “Alberta Workshop”, attended by a total of 75 guests, profiling investment opportunities in Alberta’s life sciences industry.

This year’s presenters included:• Dr. Yun-Tam, SinoVeda Canada Inc.• Dr. Svetlana Sapelnikova, KMT Hepatech Inc.• Dr. Robert Foster, Isotechnika Pharma Inc.—

World Congress 2012

The World Congress on Industrial Biotechnology and Bioprocessing is the world’s largest industrial biotechnology event for business lead-ers, investors and policy makers in biofuels, biobased products and renewable chemicals. This year’s conference attracted more than 1000 attendees from 37 countries, with over 44% of the attendees from outside of the U.S.

As with previous years, BioAlberta facilitated Alberta’s presence, and worked with other members of the Bioeconomy Alberta team, including:• AIberta Innovates Bio Solutions,• Alberta Innovates Technology Futures,• Alberta Treasury Board and Enterprise,• Biorefining Conversions Network,• Alberta Biomaterials Development Centre,• Alberta Agriculture and Rural Development - Bio-based Chemicals Program and• Alberta Sustainable Resource Development,to coordinate and implement a strategy that focused on conveying the strengths of both Alberta and the companies within this field.

Building on the province’s presence at the conference from previous years, guests to the booth at the 2011 World Congress were invited to “Experience Alberta” through a variety of channels which showcased Alberta-based technology, products, and expertise.

This was also the first year in which a bursary program was offered to industry. Those companies attending the conference included:• Ceapro Inc.• Radient Technologies Inc.• Symbiotic EnviroTek Inc.

The Alberta Reception, with over 145 attendees, once again, proved to be a high value, highlight event, providing a venue for a targeted audience to meet and do business with Alberta delegates.

BioAlberta was also a co-host of the Canadian reception coordinated by BIOTECanada, attended by over 300 guests.—

Innovat ion Open Golf Tournament 2012

This annual event is hosted by Edmonton Economic Development Corporation, Bennett Jones LLP, TEC Edmonton and BioAlberta. Now in it’s 6th year, the golf tournament was started by a group of individuals who determined that the Edmonton Science and Technology Community could benefit from a networking event outside the parameters of the normal gatherings. This year, BioAlberta engaged golfers at its sponsored hole through a multiple-choice, “Member Trivia”, which proved to be a great mechanism for showcasing some of Alberta’s life sciences companies.—

CEO Forums 2012 -Edmonton and Calgar y

Every year, BioAlberta hosts a forum, in both Edmonton and Calgary, for the CEOs of its member companies. With over 100 life sci-ences CEO’s invited, these forums provide a rare opportunity for all these industry leaders to come together at one time, to focus on the discussion of issues related to the industry.—

BioAlberta sponsored hole at Innovation Open Golf Tournament 2012

The Alberta booth

“Sample Alberta” – Alberta life sciencescompanies provide the natural ingredientsfor many well-known products

“Meet Alberta Opportunities” reception hosted by BioAlberta

“Experience Alberta” – hemp compositeskateboard


MARKET MARKET

2012 BIO Internat ional Convent ion

This year’s BIO International Convention, which took place from June 18-21 in Boston, MA, attracted over 16,000 industry leaders from 65 countries including more than 60 delegates from Alberta. This year, the Alberta delegation was officially led by Deputy Premier Thomas Lukaszuk, and Minister Stephen Kahn, from Enterprise and Advanced Education. This was the first BIO for the Deputy Premier and the Minister, both of whom held numerous meetings to promote Alberta’s capabilities in life sciences, investment attraction and collaboration opportunities.

As in previous years, BioAlberta was the primary organizer of Alberta’s presence at the convention and joined forces with BIOTECanada and our provincial counterparts on the tradeshow floor under the “Canada Café” banner.

With funds from Alberta Innovates – Health Solutions, BioAlberta also administered the Access2BIO program, which provided up to $6,000 each for three, early-stage member companies to support their

Alber ta Recept ion at BIO 2012

BioAlberta hosted the 5th annual Alberta Reception at BIO 2012 on June 19 at the Fairmont Battery Wharf in Boston, MA. More than 200 national and international guests from large multinational companies, investment firms, government, universities, Canadian and international trade offices, and provincial partner organizations attended this year’s event. A significant number of these guests came from targeted large pharmaceuti-cal and biotechnology firms, who spent time networking with Alberta life sciences compa-nies and senior government officials, including Deputy Premier Lukaszuk and Minister Kahn, building relationships and potential partnerships.—

attendance at BIO. This year’s recipients shared the Alberta booth struc-ture with other Alberta companies and support agencies at the Canada Café, presenting a unified Alberta life sciences presence.

Alberta participants at the Canada Café:• Alberta Glycomics Centre• Ceapro Inc.• Innovate Calgary• Metabolomic Technologies Inc. (Access2BIO recipient)• Orpyx Medical Technologies Inc. (Access2BIO recipient)• Surface Medical Inc. (Access2BIO recipient)• Zymetrix (The BOSE Biomaterial and Tissue Engineering Technology Development Centre)• KMT Hepatech Inc.

BioAlberta is always looking for additional opportunities to promote its members and provide greater exposure. This year, BioAlberta, as part of its new social media initiative, strategically promoted the attending

companies and their key messages through social media channels. We were also able to connect with a prominent, official BIO blogger, which resulted in a number of our member companies having the opportunity to participate in live BIO radio interviews. These were subsequently archived and available through multiple channels for maximum exposure. Additionally, both Deputy Premier Lukaszuk and Minister Kahn participated in video interviews highlighting the Alberta landscape and the opportunities available for collaboration and investment. —

The Alberta booth Alberta companies participated in live BIO radio interviews Promotional tools for Alberta life sciences companiesCanadian Soirée hosts Networking at the 5th annual Alberta Reception

Welcome to the 5th annual Alberta ReceptionOfficial opening of Canada Café

Dr. David Cox and Ryan Radke speak with Minister Stephen Kahn

MILESTONES=MOMENTUM

INCREASED MARKET EXPOSURE

“BioAlberta took care of many key aspects with regard to BIO 2012, including setting up marketing opportunities, such as securing a spot for MTI on a live radio show. I was able to leverage this radio time to secure an invite from an investment bank, ensuring a presentation slot for MTI at its private company conference in February 2013.”

Reg Joseph, CEO, Metabolomic Technologies Inc. (MTI)

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Partner ing Committee

BioAlberta’s Partnering Committee plans and facilitates business devel-opment initiatives that connect member companies and the life sciences industry to partners, buyers and sources of financing. The committee has three main objectives: • Investment Opportunities • Training and Development • Promotional activities and programs

In January 2012, BioAlberta’s Partnering Committee spearheaded a formal partnership with the VA Angels, one of the largest gatherings of business angels in the province. The partnership kicked off with “Open Mic” nights in Calgary and Edmonton, where BioAlberta members net-worked with, and practiced their investment pitches in front of the VA Angels member investors and industry colleagues.

As a sponsor of the monthly VA Angels Forums in Calgary and Edmon-ton, BioAlberta offers its members a significant discount to present to

angel investors at the sessions, as well as access to the VA Angels’ Summit Series, a two-day boot camp for start-ups to fine-tune skills related to business strategy, sales, mentoring, and raising seed capital.

In December, BioAlberta collaborated with Gold Partners McCarthy Tétrault LLP to host a “Strategic Business Management of IP” seminar in Edmonton and Calgary, which focused on how life sciences companies can balance between scope of patent protection and available resources.

In support of Silver Partner GlaxoSmithKline Inc. (GSK), BioAlberta organized the GSK Fund Innovation Luncheon in Edmonton in May, which launched the $50-million GSK Canada Life Sciences Innova-tion Fund in Alberta. More than 85 guests attended the luncheon, and a select group of companies, many of which are BioAlberta members, were invited to meet with GSK Fund representatives to explore potential investment opportunities.—

Reg Joseph, Metabolomic Technologies Inc., pitches at the “Open Mic” night

Official launch of the GSK Canada Life Sciences Innovation Fund in Alberta

DEVELOP

MILESTONES=MOMENTUM

EXPANDEDINVESTMENTOPPORTUNITIESIn January 2012, BioAlberta’s Partnering Committee spearheaded a formal partnership with the VA Angels, one of the largest gatherings of business angels in the province.


IBO Grant

This year, BioAlberta launched the new IBO Grant, which was presented at the 12th AGM and Awards Gala to one early-stage BioAlberta member company to access professional marketing services from Odvod Media. The IBO Grant’s first recipient was SmileSonica Inc., a medical device company focused on non-invasive therapeutic dental technologies.—

Medical Product Development Program

The Medical Product Development Program (MPDP) is administered by BioAlberta and jointly funded by Western Economic Diversification Canada and the Government of Alberta through the Canada-Alberta Western Economic Partnership Agreement. The MPDP helps Alberta companies develop and commercialize new medical devices and applications.

MPDP Round 3 products in development:

Alzheimer’s Innovation Institute Inc.A quality-of-life enrichment program (the Ashby Memory Method) that helps manage the symptoms of Alzheimer’s disease and dementia.

Aquila Diagnostic Systems Inc.A portable diagnostic kit that tests for blood-borne diseases and genomic markers.

BioMotion Ltd.Garments with an electrical stimulator that helps prevent pressure ulcers (bedsores).

D-TEX Inc.Developing a rapid test for detecting bacteria.

MetabolomicTechnnologies Inc.An innovative, spot-urine diagnostic test to detect colon cancer.

Orpyx Medical Technologies Inc.An orthotic insole with embedded pressure sensors that map and transmit data to a tactile display worn on the low back.

Surface Medical Inc.A medical device that restores therapeutic surfaces, aiding in the prevention and control of hospital-associated infections.

Technology North CorporationDeveloping a family-use version of the TN Active Care software for ease in care plan-ning, data collection and case management of disabled or special-needs patients.

XSENSOR Technology CorporationAdvanced continuous pressure monitoring technology for pressure ulcer prevention.—

Cristian Scurtescu and Darryl Lesiuk from SmileSonica receive IBO Grant from Trudy Callaghan, Odvod Media

Medical Product Development Program brochure

DEVELOP DEVELOP

Cristian Scurtescu and Darryl Lesiuk from SmileSonica receive IBO Grant from Trudy Callaghan, Odvod Media

A number of marketing documents were developed for SmileSonica as a result of the IBO Grant

MILESTONES=MOMENTUM

SUPPORTING PRODUCT DEVELOPMENT

“If we had known then what we know now, SmileSonica would have made the financial commitment to outsource marketing services instead of developing the pieces internally. As a result of the grant we are now better positioned to take our product to market.”

Cristian Scurtescu, Founder and CEO, SmileSonica Inc.MILESTONES=MOMENTUM

SUPPORTINGPRODUCTDEVELOPMENT

More than $1 million in financial support has been awarded to 18 companies developing 20 differ-ent products since the MPDP was launched in 2009.

MILESTONES = MOMENTUM18

Sanof i B ioGENEiusChal lenge Canada

Grade 11 students Nikola Viktorov and Andy Le, from Old Scona Academic High School in Edmonton, finished in first place at this year’s regional Sanofi BioGENEius Challenge Canada (SBCC) competition. The students’ research, which focused on providing researchers with a tool to monitor cell death in lymphoma cells, won them the top prize of $2,000. The SBCC pairs high school students with university mentors to work on real-world, lab-based projects and encourages students to pursue future studies and careers in the excit-ing field of biotechnology.—

Scholarship Recip ients

As part of our ongoing efforts to promote awareness with regard to the life sciences industry in Alberta, and to encourage the development of its future leaders, BioAlberta has established a number of scholarships at institutes across the province.• 2011-2012 Marketing Scholarship at Bissett School of Business, Mount Royal University Calgary – awarded to Reid Larsen.• 2011-2012 Faculty of Science Scholarship at the University of Alberta, Edmonton – awarded to Cian Hackett.—

Students, Nikola Viktorov and Andy Le with Carmen Wyton from Sanofi

Reid Larsen, Marketing Scholarship at Bissett School of Business

Cian Hackett, Faculty of Science Scholarship at University of Alberta

The 2012 SBCC Alberta team

Students, Nikola Viktorov and Andy Le at the SBCC poster presentation

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BIOALBERTA ANNUAL REPORT 2012 19


FINANCIAL STATEMENTS FINANCIAL STATEMENTS

Statement of F inancia l Posi t ionAS AT JUNE 30

2012 2011AssetsCurrentCash and cash equivalents [note 4] $ 1,268,624 $ 1,131,112 Investment in GIC [note 5] 255,891 250,000Accounts receivable 46,274 147,477 Prepaid expenses 19,289 12,673 $ 1,590,078 $ 1,541,262

Liabilities CurrentAccounts payable and accrued liabilities $ 82,190 $ 138,746 Deferred sponsorship, membership fees and grants [note 4] 858,527 753,014 $ 940,717 $ 891,760

Commitments [note 6]

Net AssetsUnrestricted net assets $ 49,361 $ 49,502Internally restricted net assets [note 7] 600,000 600,000 649,361 649,502 $ 1,590,078 $ 1,541,262

On behalf of the Board:

Ed Knash (Treasurer)BioAlberta Audit Committee ChairVice President, Corporate Financial Services, ATB Financial

The accompanying notes are an integral part of these financial statements.

Independent Auditors ’ Repor tTO THE MEMBERS OF THEALBERTA BIOTECHNOLOGY ASSOCIATION(OPERATING AS BIOALBERTA)

Report on the Financial StatementsWe have audited the accompanying financial statements of Alberta Biotech-nology Association, which comprise the statement of financial position as at June 30, 2012, and the statements of changes in net assets, revenue and expense and changes in unrestricted assets and cash flows for the year then ended, and a summary of significant accounting policies and other explana-tory information.

Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian generally accepted accounting principles, and for such internal controls as management deter-mines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about

the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appro-priate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements present fairly, in all material respects, the financial position of the Association as at June 30, 2012, and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.

Edmonton, CanadaSeptember 29, 2012

John H.C. Pinsent Professional CorporationChartered Accountant


FINANCIAL STATEMENTSFINANCIAL STATEMENTS

Statement of Changes in Net AssetsYEAR ENDED JUNE 30

2012 2011 Invested Internally in capital Unrestricted restricted assets net assets net assets Total TotalBalance, beginning of year $ — $ 49,502 $ 600,000 $ 649,502 $ 650,838Excess (deficiency) of revenue over expenses — (141) — (141) (1,336)Balance, end of year $ — $ 49,361 $ 600,000 $ 649,361 $ 649,502


Statement of Revenue and Expense and Changes in Unrestr icted Net AssetsYEAR ENDED JUNE 30

2012 2011Revenue Government grants [note 8] $ 430,000 $ 450,000MPDP grant [note 4 and 10] 597,240 329,657Program fees 197,229 247,515Consulting fees – 323Partnership program fees 226,315 191,524Membership fees 57,601 57,497Interest income 8,957 11,349Service agreement fees 12,000 – $ 1,529,342 $ 1,287,865

Expenses Wages and benefits $ 446,487 $ 437,422Program fee costs 333,330 355,201MPDP project costs [note 4 and 10] 597,240 329,657Interest 75 62Rent 59,685 58,683Travel 31,547 49,038Office 27,252 24,124Professional fees 10,250 9,000Information technology and networking 5,738 10,879Telephone 14,440 8,782Amortization – 2,845Dues and subscriptions 3,439 3,508 $ 1,529,483 $ 1,289,201

Excess (deficiency) of revenue over expenses for the year $ (141) $ (1,336)Unrestricted net assets, beginning of year 49,502 150,314Transfer from net invested in equipment – 524Transfer of unrestricted funds – (100,000)Unrestricted net assets, end of year $ 49,361 $ 49,502




Notes to Financia l Statements

1. PURPOSE OF THE ORGANIZATION

The Alberta Biotechnology Association (the “Association”) is a not-for-profit organization incorporated under the Societies Act of Alberta on October 15, 1998. The Association was formed to provide leadership towards the creation of a strong, viable biotechnology industry in Alberta by promoting the growth of biotechnology businesses and firms and providing an authorita-tive voice within Alberta, nationally and internationally on Alberta industry issues. The Association is not subject to income tax.

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of presentationThese financial statements have been prepared in accordance with account-ing principles generally accepted in Canada and reflect the accounting policies summarized below.

Cash and cash equivalentsThe Association considers all bank accounts, liquid investments with maturities of three months or less and bank loans with no fixed terms of repayment to be cash and cash equivalents. All amounts held for investment purposes are valued at the lower of cost and fair market value.

Investment in GICInvestments in Guaranteed Investment Certificates are non-redeemable financial instruments that are held to maturity. Interest is paid annually at the rate prescribed in the GIC.

Revenue recognitionThe Association follows the deferral method of accounting for contributions. Restricted contributions are recognized as revenue in the year in which the related expenses are incurred. Unrestricted contributions are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Contributions restricted for the acquisition of equipment having a limited life are initially recorded as deferred contributions in the period in which they are received and, when expended, are transferred to unamortized deferred capital contri-butions and amortized to revenue over the useful lives of the related assets.


Program sponsorship fees are recognized in the period in which the related program is conducted. Program fees received in advance of the program are deferred.

Membership and partnership fees are recognized over the membership and partnership term. Membership and partnership terms extending past the year-end are deferred.

Contributed servicesContributed services and donated goods are not recognized in the financial statements, as the fair value cannot be reasonably estimated.

Measurement uncertaintyThe preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from management’s best estimates as additional information becomes available in the future.

Recent accounting pronouncementsDuring 2010, the Canadian Accounting Standards Board finalized new accounting standards for not-for-profit organizations, which become effective for fiscal years beginning on or after January 1, 2012 but may be adopted earlier. Not-for-profit organizations may also choose to adopt International Financial Reporting Standards. The Organization intends on adopting the standards for not-for-profit organizations for the fiscal year commencing July 1,2012.

3. F INANCIAL INSTRUMENTS

The carrying values of cash and cash equivalents, investment in GIC, accounts receivable and accounts payable and accrued liabilities approxi-mate their fair values due to the relatively short period to maturity of the instruments. The Association is exposed to the following risks arising from these financial instruments.

Statement of Cash F lowsYEAR ENDED JUNE 30

2012 2011Operating Activities Excess (deficiency) of revenue over expenses for the year $ (141) $ (1,336)Add back non-cash items: Amortization – 2,845Changes in non-cash working capital: Accounts receivable 101,203 (94,474)Prepaid expenses (6,616) 95Accounts payable and accrued liabilities (56,556) 47,978Deferred sponsorship, membership fees and grants 105,513 363,452Cash provided by operating activities $ 143,403 $ 318,560

Investing Activities Investment in GIC $ (5,891) $ –Cash provided by (used in) investing activities $ (5,891) $ –

Increase in cash during the year $ 137,512 $ 318,560Cash and cash equivalents, beginning of year 1,131,112 812,552Cash and cash equivalents, end of year $ 1,268,624 $ 1,131,112

Supplemental Information: Interest received $ 12,347 $ 14,095Interest paid $ 75 $ 62



FINANCIAL STATEMENTSFINANCIAL STATEMENTS

Resource needs are considered in the preparation of annual budgets and in the monitoring of cash flows and actual operating results are compared to budgets. The Association manages its capital structure to maintain flexibil-ity to adjust to changes in economic conditions and to respond interest rate, credit and other risks. In order to maintain or adjust its capital structure, the Association may adjust controllable revenues and expenses accordingly or raise debt.

At June 30, 2012, the Association had met its capital management objective.

10. MEDICAL PRODUCT DEVELOPMENT PROGRAM

On July 7, 2009, the Association received Ministerial approval for a Medical Product Development Program grant from Western Economic Diversifica-tion Canada (WD) for a maximum project cost of $975,000. On May 15, 2012, the Minister granted approval to amend the Agreement on the Association’s request to modify the expected cash flow as follows:

2010 $ 86,721 2011 213,5362012 254,6152013 300,0002014 120,128 $ 975,000

Total Funding Committed to the Program to March 31, 2014Western Economic Diversification Canada $ 975,000Government of Alberta 1,390,000 $ 2,365,000

WD’s funding is provided to the Association on a reimbursement basis. WD has committed $975,000 over five years ending March 31, 2014, with $1,390,000 committed by the Government of Alberta for the same period. Of the $975,000 committed by WD, $554,872 has been disbursed to the Association as of June 30, 2012. Project expenses must be incurred and audited before WD allocates the funding to the Association. During the year ended June 30, 2012, the Association expended $597,240 (2011 - $329,657) related to the program and recognized the same amounts as revenue.

The funding from the Government of Alberta is provided to the Associa-tion in advance and held in trust. However, provincial allocations can only be distributed with audit clearance and matching funds from WD until WD funding for the project ceases. Any amounts which are not expended in the current fiscal year will be held in trust and deferred to the next fiscal year.

Credit riskFinancial instruments that subject the Association to credit risk consist primarily of cash and cash equivalents and accounts receivable. The Asso-ciation provides services to a diverse membership base and its credit risk is not concentrated in any one particular member or group.

4.DEFERRED SPONSORSHIP, MEMBERSHIP FEES AND GRANTS

The Association bills its members an annual fee which coincides with the fiscal year of the Association. A total of $2,415 (2011 - $1,260) of membership fees were deferred at the end of June 30, 2012, representing prepayment of membership fees for the fiscal 2013 year. In addition, $46,000 (2011 - $77,000) in partnership fees, $810,112 (2011 - $664,754) of project grants and $nil (2011 -$10,000) of industry report support were deferred as at June 30,2012.

On May 15, 2012, the Minister of Western Economic Diversification Canada granted approval to amend the original agreement wherein the federal government granted the Association up to $975,000 to deliver a Medical Products Development Program (“MPDP”). On March 29, 2012, the Government of Alberta granted approval to amend the original agreement regarding its funding of the MPDP up to $1,390,000. As of June 30, 2012, $810,112 (2011 - $664,754) of the funds received under the MPDP were deferred. Related revenue will be realized as costs associated with the delivery of the program are incurred in subsequent years.

During the current year, the Association realized $597,240 of revenues and $597,240 of expenses related to the delivery of programs associated with the MPDP grant.

5. INVESTMENT IN GIC

As of June 30, 2012, the Association held $250,000 (2011 - $250,000) in Guaranteed Investment Certificates having an interest rate of 2.350% and maturing March 22, 2013.

6. COMMITMENTS

Aggregate base payments required under all operating leases over the next five years and in aggregate are as follows:2013 $ 40,2912014 7,3912015 5,7452016 and thereafter 2,394 $ 55,821

7. INTERNALLY RESTRICTED NET ASSETS

The purpose of the internally restricted fund is to sustain basic operations and core member services during a short- term economic downturn or temporary lapse in funding; to provide for wind-down costs in the event of funding withdrawal and to provide a source of funds, over and above potential insurance reimbursement, for capital asset replacement in the event of a disaster. The fund was established in 2005 for $325,000 with an additional $75,000 transferred to the fund in fiscal 2006, $100,000 in fiscal 2009 and $100,000 in fiscal 2011. The fund balance as at June 30,2012 was $600,000 (2011 - $600,000).

8. GOVERNMENT FUNDING

The Association has recognized funding under the following government grants: 2012 2011Advanced Education and Technology $ 400,000 $ 400,000National Research Council Canada - IRAP 30,000 50,000 $ 430,000 $ 450,000

On January 4, 2012, the Association entered into an agreement with Alberta Advanced Education and Technology (“AET”) to obtain continued core funding. Under this grant, the Association received $400,000 (2011 - $400,000) during fiscal 2012.

On November 20, 2011, the Association entered into an agreement with the National Research Council of Canada (“NRC”) under the Industrial Research Assistance Program (IRAP) to obtain funding of up to $58,000. Under the terms of the agreement, NRC will provide up to $30,000 in fiscal 2012 and $28,000 in fiscal 2013 to assist with the costs of the BioPartnering Workshop and various marketing costs. In 2012, $30,000 (2011 - $50,000) were provided by NRC and included in government grant revenues.

The funds from either grant are not externally restricted as they are pro-vided to the Association for general operations consistent with its business plan and budget.

9. CAPITAL MANAGEMENT

The Association’s objective when managing capital is to provide sufficient resources to cover normal operating and future capital expenditure require-ments, as well as the opportunity to take advantage of strategic opportuni-ties that arise.

Maximum amount


BIOALBERTA

BioAlber ta Board of Directors 2011 - 2012Paul BraconnierExecutive-in-Residence, TEC Edmonton

Ross BrickerPresident and CEO, AVAC Ltd.

David Cox (Co-Chair)Retired Biotechnology Executive

Al GourleyCorporate Director, SinoVeda Canada Inc.

Ed KnashVice President, ATB Corporate Financial Services

Christopher MicetichPresident and CEO, NAEJA Pharmaceutical Inc. and Fedora Pharmaceuticals Inc.

Rick PawlukPartner, McCarthy Tétrault LLP

Ryan RadkePresident, BioAlberta

Mark RedmondExecutive Director, Institute for Reconstructive Sciences in Medicine

Jacqueline ShanPresident and CEO, Afinix Life Sciences Inc.

Rick Smith (Co-Chair)Retired Biotechnology Executive

Laurie StretchVice President, NATIONAL Public Relations

Jeremy WebsterAssociate Partner, Deloitte & Touché LLP

BioAlber ta StaffRyan RadkePresident

Amanda StadelExternal Affairs and Communications Director

Heather PontikesEvents and Membership Manager

Charlene NavarraMedical Product Development Program Manager

Bev PedersonFinancial & Human Resources Coordinator

Donna ParkerAdministrative Coordinator

BioAlber ta ConsultantsSanofi BioGENEius Challenge Canada (SBCC)

Anna NogaRegional Coordinator

Medical Product Development Program (MPDP)

Travis Colley MPDP Technical Director

Darren Jakal MPDP Technical Director

BioAlber ta314 Capital Place,9707 110 streetEdmonton, Alberta, CanadaT5K 2L9Phone: 780 425 3804Fax: 780 409 [email protected] .com

BioAlberta has been the central voice and organiz-ing hub for the life sciences industry in Alberta since 1999. It is a private, not-for-profit industry associa-tion with more than 140 members. The association’s activities are focused on advocacy, promotion and networking. In its advocacy efforts on the national stage, BioAlberta joins forces with other life science organizations such as its counterparts in other provinces and BIOTECanada.

BioAlberta’s core life sciences membership includes:• Academic and Research Institutions• Agriculture• Environmental• Government• Health-BioPharma• Industrial• Medical Devices• Nutraceuticals• Support Services

Go Social with BioAlberta

LinkedInwww.linkedin.com/company/bioalberta-alberta-biotechnology-association-

Twitterwww.twitter.com/BioAlberta or @BioAlberta

Facebookwww.facebook.com/BioAlberta

BioAlberta Beat (blog)www.bioalberta.com/bioalberta-beat

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BIOALBERTA MEMBERSHIP LIST

B ioAlber ta Membership L ist 2011 - 2012Abbott Laboratories Ltd. (Silver)ACAMPACCUMOL Inc.Afexa Life Sciences Inc. (Silver)Afinix Life Sciences Inc.Agriculture Financial Services Corporation (Silver)Ag-West Bio Inc.AIHS Team for SMART Neuralprostheses - Project SmartAlberta Enterprise and Advanced Education (Patron)Alberta Agriculture and Rural DevelopmentAlberta Glycomics CentreAlberta Innovates - Alberta Research and Innovation Authority Alberta Innovates - Bio Solutions (Silver)Alberta Innovates - Health Solutions (Platinum)Alberta Innovates - Technology Futures (Silver)Alberta International and Intergovernmental and Aboriginal RelationsAlzheimer’s Innovation Institute Inc.AMGEN Canada Inc. (Silver)Angeltear Solutions Inc.Aqua Air Systems Ltd.AstraZeneca Canada Inc. (Platinum)ATB FinancialATGCell Inc.AVAC Ltd. (Gold)Bennett Jones LLPBertech Pharma Ltd.Best Environmental Technologies Inc.Best Management Services Inc.BioLipids Inc.Biomedical Engineering Research & Results Initiative (BERRI)BioNeutra Inc.Biorefining Conversions Network (Silver)BIOTECanadaBiovantage Inc.Botaneco Corp.Bristol-Myers Squibb CanadaCanada’s Research-Based Pharmaceutical Companies (Rx&D)Canadian Bio-Systems Inc.Canadian Centre for DNA Diagnostics Inc.Canadian Strategy Group Inc.CanBiocin Inc.CEAPRO Inc.

ChemRoutes CorporationChenomx Inc.Circle Cardiovascular Imaging Inc.Cleankeys Inc.clinexusCQI Consulting Ltd.Deloitte & Touche LLP (Platinum)Dow AgroSciences Canada (Silver)Drug Development & Innovation Centre D-TEX Inc.Edmonton Economic Development CorporationEdmonton NorthlandsEli Lilly Canada (Silver)EMD Inc. (Silver)EnerkemEpsilon Chemicals LtdExciton Technologies Inc.Fraser Milner Casgrain LLPGenome AlbertaGlaxoSmithKline Inc. (Silver)Global IQ Inc.Gowling Lafleur Henderson LLPGrowSafe Systems Ltd.Hannibal Ventures Inc.Highmark Renewables Research LPHoffmann-La Roche Limited (Roche Canada)iHear Unicare Inc.IMBiotechnologies Ltd.Innovate CalgaryInnovative Trauma Care Inc.Innovotech Inc.Institute for Reconstructive Sciences in MedicineIntellectual Capital Corporation Inc.IntelligentNano Inc.InvensysIsotechnika Pharma Inc. (Silver)Janssen Inc. (Silver)Keystone Labs Inc.KMT Hepatech Inc.Luxmux Technology CorporationMarsh Canada LimitedMatter Industrial DesignMazankowski Alberta Heart InstituteMcCarthy Tétrault LLP (Gold)Merck Canada Inc. (Gold)Metabolic Modulators Research Ltd.Metabolomic Technnologies Inc.Monsanto Canada Inc.MTN Consulting AssociatesNAEJA Pharmaceutical Inc.NanoSpeed Diagnostics Inc.NATIONAL Public RelationsNorthern Alberta Clinical Trials and Research Centre

Northern Alberta Institute of Technology (novaNAIT)Novartis Pharmaceuticals Canada Inc. (Silver)Nycomed Canada Inc.Odvod Media Corp. (Gold)Oncolytics Biotech Inc.Osteometabolix Pharmaceuticals Inc.Paladin Biosciences, a Division of Paladin Labs Inc.Parlee McLaws LLPParvus Therapeutics Inc.PBR Laboratories Inc.Pfizer Canada Inc. (Platinum)Poultry Research Centre, ThePricewaterhouse Coopers LLPQiQ Inc.Radient Technologies Inc. (Silver)Research Tax Services Ltd.Resverlogix Corp.Sanofi Aventis Group (Silver)SciMed Laboratories Inc.SemBioSys Genetics Inc.SinoVeda Canada Inc.SmileSonica Inc.Stem Cell Therapeutics Corp.SynInnova Inc.Taiga BioActives Inc.Tangent Design Engineering Ltd.TC Scientific Inc.TEC EdmontonTechnology North CorporationUniversity of Calgary - Faculty of MedicineUniversity of LethbridgeViaGen Inc.VWR International Ltd.W.A. Cochrane & Associates Inc.WAI BioProcess SolutionsWax-it Histology Services Inc.Western Economic Diversification Canada (Patron)Zymetrix Inc.

Individual MembersBarl, Branka (Dr.)Cox, David (Dr.)Desai, Pete (Dr.)Dias, Vernon (Dr.)Gourley, AlHuestis, GarthMcKay-Carey, Mary JaneRedmond, Mark (Dr.)Sheridan, BeverleySustrik, GordonSwanson, Eric (Dr.)Welsh, MichaelWissmann, Andreas (Dr.)

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