Lorus Therapeutics Inc.
          
Consolidated Balance Sheets
          
   
As at
  
As at
  
(amounts in 000's)
  
November 30, 2005
  
May 31, 2005
 
(Canadian Dollars)
  
(Unaudited)
  
(Audited)
 
ASSETS
          
Current
          
Cash and cash equivalents
  
$
10,522
  
$
2,776
  
Short-term investments
    
3,695
   
18,683
 
Prepaid expenses and other assets
    
694
   
1,126
 
     
14,911
   
22,585
 
Long-term
              
Fixed assets
    
1,394
   
1,581
 
Deferred financing charges
   
529
   
568
 
Goodwill
    
606
   
606
 
Acquired patents and licenses
   
1,441
   
2,226
 
     
3,970
   
4,981
 
   
$
18,881
  
$
27,566
  
LIABILITIES
              
Current
              
Accounts payable
  
$
2,218
  
$
1,069
  
Accrued liabilities (note 3)
    
2,551
   
3,019
 
Secured convertible debentures (notes 4 and 7(b))
    
10,578
   
-
 
     
15,347
   
4,088
 
Long-term
              
Secured convertible debentures
   
-
   
10,212
 
SHAREHOLDERS' EQUITY
              
Share capital (note 3)
              
Common shares (note 5)
    
144,526
   
144,119
 
Equity portion of secured convertible debentures
    
3,814
   
3,814
 
Stock options (note 6)
    
4,941
   
4,252
 
Contributed surplus
   
6,749
   
6,733
 
Warrants
   
991
   
991
 
Deficit accumulated during development stage
    
(157,487
)
  
(146,643
)
     
3,534
    
13,266
  
   
$
18,881
  
$
27,566
  
               
See accompanying notes to the unaudited consolidated interim financial statements
              
Basis of Presentation - Future Operations Note 1
              
Contingency Note 4
              
Subsequent Events Note 7
              
 
 
 

Lorus Therapeutics Inc.
                      
Consolidated Statements of Loss and Deficit (unaudited)
                      
                       
                   
Period
  
   
Three
  
Three
  
Six
  
Six
  
from inception
  
(amounts in 000's except for per common share data)
  
months ended
  
months ended
  
months ended
  
months ended
  
Sept. 5, 1986 to
  
(Canadian Dollars)
  
Nov 30, 2005
  
Nov 30, 2004
  
Nov 30, 2005
  
Nov 30, 2004
  
Nov 30, 2005
  
REVENUE
 
$
6
  
$
1
  
$
7
  
$
3
  
$
687
  
     
6
   
1
                   
EXPENSES
                                
Cost of sales
    
1
   
1
   
1
   
1
   
85
  
Research and development (note 3)
    
2,631
   
3,838
   
6,588
   
8,887
   
106,826
  
General and administrative (note 3)
    
1,619
   
1,333
   
2,695
   
2,358
   
45,836
  
Stock-based compensation (note 6)
    
414
   
650
   
705
   
861
   
6,250
  
Depreciation and amortization
    
130
   
144
   
260
   
251
   
8,312
 
Operating expenses
    
4,795
   
5,966
   
10,249
   
12,358
   
167,309
 
Interest expense on convertible debentures
    
209
   
39
   
407
   
39
   
707
  
Accretion in carrying value of convertible debentures
   
180
   
58
   
366
   
58
   
792
  
Amortization of deferred financing charges
    
19
   
19
   
39
   
19
   
123
  
Interest income
    
(95
)
  
(136
)
  
(210
)
  
(281
)
  
-10,757
  
Loss for the period
    
5,102
   
5,945
   
10,844
   
12,190
   
157,487
 
Deficit, beginning of period
   
152,385
   
130,826
   
146,643
   
124,581
   
-
 
Deficit, end of period
  
$
157,487
  
$
136,771
  
$
157,487
  
$
136,771
  
$
157,487
  
Basic and diluted loss per common share
  
$
0.03
  
$
0.03
  
$
0.06
  
$
0.07
        
Weighted average number of common shares
                                
outstanding used in the calculation of
                                
basic and diluted loss per share
    
173,110
    
172,000
    
172,911
    
171,901
        
                                 
See accompanying notes to the unaudited interim consolidated financial statements
                                
 
 
 

 
Lorus Therapeutics Inc.
                      
Consolidated Statements of Cash Flows (unaudited)
                      
                       
                   
Period
  
   
Three
  
Three
  
Six
  

Six

  

from inception

  
(amounts in 000's)
  
months ended
  
months ended
  
months ended
  

months ended

  

Sept. 5, 1986 to

  
(Canadian Dollars)
  
Nov 30, 2005
  
Nov 30, 2004
  
Nov 30, 2005
  

Nov 30, 2004

  

Nov 30, 2005

  
OPERATING ACTIVITIES
                      
Loss for the period
  
$
(5,102
)
$
(5,945
)
$
(10,844
)
$
(12,190
)
$
(157,487
)
Add items not requiring a current outlay of cash:
                               
Stock-based compensation
   
414
   
650
   
705
   
861
   
6,250
 
Interest expense on convertible debentures
    
209
   
39
   
407
   
39
   
707
 
Accretion in carrying value of convertible debentures
   
180
   
58
   
366
   
58
   
792
 
Amortization of deferred financing charges
   
19
   
19
   
39
   
19
   
123
 
Depreciation, amortization and write-down of fixed assets
    
522
   
581
   
1,045
    
1,125
    
19,432
 
Other
    
-
   
-
   
-
   
-
   
706
 
Net change in non-cash working capital
                                
balances related to operations
   
1,398
   
(368
)
  
1,113
   
-738
    
3,168
 
Cash used in operating activities
    
(2,360
)
  
(4,966
)
  
(7,169
)
  
(10,826
)
  
(126,309
)
INVESTING ACTIVITIES
                                
Maturity (purchase) of short-term investments, net
    
6,759
   
(715
)
  
14,988
   
11,527
   
(3,695
)
Business acquisition, net of cash received
   
-
   
-
   
-
   
-
   
(539
)
Acquired patents and licenses
    
-
   
-
   
-
   
-
   
(715
)
Additions to fixed assets
    
(3
)
  
(216
)
  
(73
)
  
(376
)
  
(6,047
)
Cash proceeds on sale of fixed assets
    
-
   
-
   
-
   
-
   
348
 
Cash provided by (used in)
                               
investing activities
    
6,756
   
(931
)
  
14,915
   
11,151
   
(10,648
)
FINANCING ACTIVITIES
                                
Issuance of debentures, net proceeds
   
-
   
4,400
   
-
   
4,400
   
12,948
 
Issuance of warrants
    
-
   
-
   
-
   
-
   
37,405
 
Issuance of common shares
    
-
   
106
   
-
   
111
   
97,371
 
Additions to deferred financing charges
   
-
   
(450
)
  
-
   
(450
)
  
(245
)
Cash provided by financing activities
    
-
   
4,056
   
-
   
4,061
   
147,479
 
Increase in cash and cash
                                
equivalents during the period
    
4,396
    
-1,841
    
7,746
   
4,386
    
10,522
  
Cash and cash equivalents,
                               
beginning of period
    
6,126
    
7,298
    
2,776
    
1,071
    
-
 
Cash and cash equivalents,
                               
end of period
  
$
10,522
  
$
5,457
  
$
10,522
  
$
5,457
  
$
10,522
  
                                 
See accompanying notes to the unaudited consolidated interim financial statements