SUPPL 1 formsuppl.htm FORM SUPPL Trillium Therapeutics Inc. - Form SUPPL - Filed by newsfilecorp.com

Filed pursuant to General Instructions II.L. of Form F-10
 File No. 333-204551

This prospectus supplement, together with the accompanying short form base shelf prospectus dated June 4, 2015 to which this prospectus supplement relates, as amended or supplemented, and each document deemed to be incorporated by reference into this prospectus supplement and the accompanying prospectus, constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities.

Information has been incorporated by reference in this prospectus supplement and the accompanying prospectus from documents filed with the securities commissions or similar authorities in the Canadian provinces of British Columbia, Alberta, Manitoba, Ontario and Nova Scotia. Copies of the documents incorporated herein by reference may be obtained on request without charge from the corporate secretary of Trillium Therapeutics Inc. at 2488 Dunwin Drive, Mississauga, Ontario, L5L 1J9, Telephone (416) 595-0627, and are also available electronically at www.sedar.com.

PROSPECTUS SUPPLEMENT
TO THE SHORT FORM BASE SHELF PROSPECTUS DATED JUNE 4, 2015

New Issue May 26, 2017

US$5.00

2,750,000 Common Shares

3,250,000 Series II Non-Voting Convertible First Preferred Shares

Trillium Therapeutics Inc., or “we”, “our”, “us” or the “Corporation”, is hereby qualifying for distribution 2,750,000 common shares of the Corporation, or the “common shares”, and 3,250,000 Series II Non-Voting Convertible First Preferred Shares, or the “Series II First Preferred Shares”, including the common shares issuable from time to time upon conversion of the Series II First Preferred Shares, pursuant to this prospectus. The Series II First Preferred Shares are being offered to those investors whose purchase of common shares in this offering may result in such investor, together with its affiliates and certain related parties, beneficially owning more than 4.99% of our outstanding common shares following the consummation of this offering. The offering price is US$5.00 per common share and US$5.00 per Series II First Preferred Share, or the “offering price”. The common shares and the Series II First Preferred Shares will be issued pursuant to an underwriting agreement dated, May 26, 2017 or the “underwriting agreement”, between us and Cowen and Company, LLC, as representative, or the “representative”, of the underwriters named therein, or the “underwriters.” See “Underwriting”. Each Series II First Preferred Share is convertible into one common share, subject to adjustment, at any time at the option of the holder, provided that the holder will be prohibited from converting Series II First Preferred Shares into common shares if, as a result of such conversion, the holder, together with its affiliates, would own more than 4.99% of the total number of our common shares then issued and outstanding, unless the holder gives us at least 61 days prior notice of an intent to convert into common shares that would cause the holder to own more than 4.99% of the total number of our common shares then issued and outstanding. See the discussion in the section of this prospectus entitled “Description of Securities Offered Under This Prospectus Supplement — Series II First Preferred Shares”.

The common shares are listed and posted for trading on the NASDAQ Capital Market, or “NASDAQ”, and the Toronto Stock Exchange, or “TSX”, under the symbol TRIL. There is no established public trading market for our Series II First Preferred Shares, and we do not expect a market to develop. On May 25, 2017, the last trading day prior to the date hereof, the closing price of the common shares on NASDAQ and the TSX were US$5.45 and Cdn$7.34 respectively.

The Corporation has applied to list the common shares to be issued under the offering on NASDAQ and the TSX. Listing on NASDAQ and the TSX is subject to the Corporation fulfilling all of the requirements of NASDAQ and the TSX, respectively. We do not intend to apply for listing of our Series II First Preferred Shares on any national securities exchange or other nationally recognized trading system.


We are an “emerging growth company” under the U.S. Jumpstart Our Business Startups Act of 2012 and as such have elected to comply with certain reduced public company disclosure requirements.

___________

Price US$5.00 per common share

Price US$5.00 per Series II First Preferred Share

___________

  Price to       Net Proceeds
  the Public(1)   Underwriters’ Fee   to the Corporation (2)
Per common share US$5.00   US$0.30   US$4.70
Per Series II First Preferred Share US$5.00   US$0.30   US$4.70
Total offering(3) US$30,000,000   US$1,800,000   US$28,200,000

Notes:

  (1)

The price of the common shares and Series II First Preferred Shares has been determined by negotiation between the Corporation and the representative. See “Underwriting”.

     
  (2)

Before deducting the expenses of the offering, estimated to be approximately US$250,000, which, together with the underwriters’ fee will be paid for by the Corporation out of the gross proceeds of the offering. See “Underwriting”.

     
  (3)

The Corporation has granted an option to the underwriters, exercisable within 30 days from the date of this prospectus supplement, to purchase a maximum of 15% of the aggregate number of common shares sold at the closing of the offering, on the same terms as set forth above. If the option to purchase additional common shares is exercised in full, the “Price to the Public”, “Underwriters’ Fee” and “Net Proceeds to the Corporation” for the purchase of additional common shares will be US$32,062,500, US$1,923,750 and US$30,138,750, respectively. This prospectus supplement also qualifies both the grant of the option to purchase additional common shares and the issuance of the common shares issuable on the exercise of the option to purchase additional common shares. A purchaser who acquires common shares forming part of the underwriters’ option to purchase additional common shares acquires such securities under this prospectus supplement, regardless of whether the option to purchase additional common shares is ultimately filled through the exercise of the option to purchase additional common shares or secondary market purchases. See “Underwriting”.


Underwriters’ Position

  Number of Securities Available   Exercise Period   Exercise Price
Option:
  412,500 common shares
  30 days following date of this
prospectus supplement
  US$5.00 per common share
Total Securities under option
issuable to Underwriters:
  412,500 common shares
  30 days following date of this
prospectus supplement
  US$5.00 per common share

The underwriters, as principals, conditionally offer the common shares and Series II First Preferred Shares, subject to prior sale, if, as and when issued by the Corporation and accepted by the underwriters, in accordance with the conditions contained in the underwriting agreement and subject to the approval of certain matters on behalf of the Corporation by Baker & McKenzie LLP, in regard to Canadian law, and Goodwin Procter LLP, in regard to United States law, and on behalf of the underwriters by Blake, Cassels & Graydon LLP, in regard to Canadian law, and Morgan, Lewis & Bockius LLP, in regard to United States law. In connection with the offering, the underwriters may over-allot or effect transactions which stabilize or maintain the market price of the common shares of the Corporation at levels other than those which might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time. None of the common shares or Series II First Preferred Shares offered hereby will be offered or sold in Canada. The underwriters initially propose to offer the common shares and Series II First Preferred Shares directly to the public at the public offering price listed on the cover page of this prospectus supplement and part to certain dealers at a price that represents a concession not in excess of US$0.18 per common share and US$0.18 per Series II First Preferred Share under the public offering price with respect to sales of common shares and Series II First Preferred Shares. After the initial offering of the common shares and Series II First Preferred Shares, the offering price and other selling terms may from time to time be varied by the representative. Any reduction in the offering price will not affect the proceeds received by the Corporation. See “Underwriting”.

Subscriptions for common shares and Series II First Preferred Shares will be received subject to rejection or allotment in whole or in part and the right is reserved to close the subscription books at any time without notice. Closing is expected to occur on or about June 1, 2017, or such other date as the Corporation and the representative may agree, but in any event no later than June 15, 2017. See “Underwriting”.

ii


NEITHER THE US SECURITIES AND EXCHANGE COMMISSION OR “SEC” NOR ANY US STATE OR CANADIAN SECURITIES REGULATOR HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.

We are permitted, under a multi-jurisdictional disclosure system adopted by the United States and Canada, to prepare this prospectus supplement in accordance with Canadian disclosure requirements, which are different from those of the United States. We prepare our financial statements, which are incorporated by reference in this prospectus supplement, in accordance with International Financial Reporting Standards, or “IFRS”, as issued by the International Accounting Standards Board, or “IASB”. Our financial statements may not be comparable to the financial statements of United States issuers.

Purchasing the common shares and Series II First Preferred Shares may subject you to tax consequences in the United States and under Canadian tax legislation. This prospectus supplement and the accompanying prospectus may not describe these tax consequences fully. You should consult and rely on your own tax advisors with respect to your own particular circumstances. See “Certain US Federal Income Tax Considerations”.

Your ability to enforce civil liabilities under United States federal securities laws may be affected adversely because we are a corporation established under the laws of the Province of Ontario and our principal place of business is in Canada. In addition, some or all of the directors and officers of the Corporation are residents of jurisdictions other than the United States and all or a substantial portion of the assets of those persons are or may be located outside the United States. See “US Enforcement of Civil Liabilities”.

See “Risk Factors” in this prospectus supplement and the accompanying prospectus for a discussion of certain considerations relevant to an investment in the common shares and Series II First Preferred Shares offered hereby.

The financial information of the Corporation incorporated by reference herein is presented in Canadian dollars. Unless otherwise noted herein, all references to “US$”, “United States dollars” or “US dollars” are to United States dollars and all references to “Cdn$” or “$”, are to Canadian dollars. See “Exchange Rate”.

The registered and head office of the Corporation is located at 2488 Dunwin Drive, Mississauga, Ontario, L5L 1J9.

Sole Book-Running Manager

Cowen

Co-Manager

Ladenburg Thalmann

iii


TABLE OF CONTENTS

  Page
Prospectus Supplement  
IMPORTANT NOTICE S-1
ABOUT THIS PROSPECTUS SUPPLEMENT S-2
FINANCIAL INFORMATION AND ACCOUNTING PRINCIPLES S-3
EXCHANGE RATE S-3
US ENFORCEMENT OF CIVIL LIABILITIES S-3
FORWARD-LOOKING STATEMENTS S-4
DOCUMENTS INCORPORATED BY REFERENCE S-7
SUMMARY OF THE OFFERING S-9
THE CORPORATION S-11
RISK FACTORS S-12
USE OF PROCEEDS S-14
CAPITALIZATION S-15
PRIOR SALES S-15
DESCRIPTION OF SECURITIES OFFERED UNDER THIS PROSPECTUS SUPPLEMENT S-16
UNDERWRITING S-18
CERTAIN US FEDERAL INCOME TAX CONSIDERATIONS S-23
AUDITORS S-32
LEGAL MATTERS S-32
DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT S-32
   
Prospectus dated June 4, 2015  
DEFINITIONS AND OTHER MATTERS 1
CURRENCY AND EXCHANGE RATE PRESENTATION 1
ENFORCEMENT OF CIVIL LIABILITIES 1
FORWARD-LOOKING STATEMENTS 2
DOCUMENTS INCORPORATED BY REFERENCE 4
AVAILABLE INFORMATION 6
THE CORPORATION 6
RISK FACTORS 6
USE OF PROCEEDS 6
CAPITALIZATION 7
PRIOR SALES 7
DESCRIPTION OF COMMON SHARES 8
DESCRIPTION OF FIRST PREFERRED SHARES 8
DESCRIPTION OF WARRANTS 11
DESCRIPTION OF UNITS 11
MARKET FOR SECURITIES 12
PLAN OF DISTRIBUTION 13
INCOME TAX CONSIDERATIONS 14
DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT 14
EXPERTS 15
REGISTRAR AND TRANSFER AGENT 15


IMPORTANT NOTICE

This document is in two parts. The first part is this prospectus supplement, which describes the specific terms of the common shares and Series II First Preferred Shares being offered and the method of distribution of those securities and also supplements and updates information regarding the Corporation contained in the accompanying prospectus. The second part, the accompanying prospectus, gives more general information about the common shares, preferred shares and other securities that may be offered from time to time. Both documents contain important information you should consider when making your investment decision. This prospectus supplement may add, update or change information contained in the accompanying prospectus. Before investing, you should carefully read both this prospectus supplement and the accompanying prospectus together with the additional information about the Corporation to which we refer you in the sections of this prospectus supplement entitled “Documents Incorporated by Reference”.

You should rely only on information contained in this prospectus supplement, the accompanying prospectus and the documents we incorporate by reference in this prospectus supplement and the accompanying prospectus. If information in this prospectus supplement is inconsistent with the accompanying prospectus or the information incorporated by reference, you should rely on this prospectus supplement. Neither we nor the underwriters have authorized anyone to provide readers with information that is different. If anyone provides you with any different or inconsistent information, you should not rely on it. We are offering the common shares and Series II First Preferred Shares only in jurisdictions where such offers are permitted by law. The information contained in this prospectus supplement and the accompanying prospectus is accurate only as of their respective dates, regardless of the time of delivery of this prospectus supplement and the accompanying prospectus and you should not assume otherwise. The business, financial condition, results of operations and prospects of the Corporation may have changed since those dates. We do not undertake to update the information contained or incorporated by reference herein or in the prospectus, except as required by applicable securities laws.

This prospectus supplement shall not be used by anyone for any purpose other than in connection with the offering.

S-1


ABOUT THIS PROSPECTUS SUPPLEMENT

This prospectus supplement and the accompanying prospectus are part of a “shelf” registration statement on Form F-10 that we have filed with the SEC. Each time we sell our securities under the accompanying prospectus we will provide a prospectus supplement that will contain specific information about the terms of that offering including price, the number and type of securities being offered, and the plan of distribution. The shelf registration statement became effective under the rules and regulations of the SEC on June 5, 2015. This prospectus supplement describes the specific details regarding the offering including the price, number of common shares and Series II First Preferred Shares being offered, and the placement arrangements. The accompanying prospectus provides general information about the Corporation, some of which, such as the section entitled “Plan of Distribution”, may not apply to the offering. This prospectus supplement does not contain all of the information contained in the registration statement, certain parts of which are omitted in accordance with the rules and regulations of the SEC. You should refer to the registration statement and the exhibits to the registration statement for further information with respect to us and our securities.

Some of the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus concerning economic and industry trends is based upon or derived from information provided by industry sources. We believe that such information is accurate and that the sources from which it has been obtained are reliable. However, we cannot guarantee the accuracy of such information and we have not independently verified the assumptions upon which projections of future trends are based.

In this prospectus supplement, the “Corporation”, “we”, “us” and “our” refer to Trillium Therapeutics Inc. and its subsidiaries.

We are subject to the information requirements of the US Securities Exchange Act of 1934, as amended, or the “Exchange Act”, and applicable Canadian securities legislation, and in accordance therewith, we file reports and other information with the SEC and with the securities regulatory authorities of each of the provinces and territories of Canada. Under a multi-jurisdictional disclosure system adopted by the United States and Canada, we may generally prepare these reports and other information in accordance with the disclosure requirements of Canada. These requirements are different from those of the United States. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required to publish financial statements as promptly as United States companies.

The reports and other information that we file with the SEC may be read and copied at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Copies of the same documents can also be obtained from the public reference room of the SEC in Washington by paying a fee. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. The SEC also maintains a website (www.sec.gov) that makes available reports and other information that we file electronically with it, including the registration statement hereto which this prospectus supplement forms a part.

This prospectus supplement is deemed to be incorporated by reference into the accompanying prospectus solely for the purposes of the offering. Other documents are also incorporated or deemed to be incorporated by reference into this prospectus supplement and into the accompanying prospectus. See “Documents Incorporated by Reference”.

Copies of reports, statements and other information that we file with the Canadian provincial securities regulatory authorities are electronically available from the Canadian System for Electronic Document Analysis and Retrieval (www.sedar.com), which is commonly known by the acronym “SEDAR”.

S-2


FINANCIAL INFORMATION AND ACCOUNTING PRINCIPLES

Unless otherwise indicated, financial information in this prospectus supplement has been prepared in accordance with IFRS. The financial information of the Corporation incorporated by reference herein is presented in Canadian dollars. Unless otherwise noted herein, all references to “US$”, “United States dollars” or “US dollars” are to United States dollars and all references to “$” or “Cdn$” are to Canadian dollars.

EXCHANGE RATE

The following table sets forth, for each period indicated, the high, low and average exchange rates for Canadian dollars expressed in United States dollars, as provided by the Bank of Canada. The exchange rates set forth below demonstrate trends in exchange rates, but the actual exchange rates used throughout this prospectus supplement may vary. The average exchange rate is calculated by using the average of the closing prices on the last day of each month during the relevant period. On May 25, 2017, the exchange rate for one Canadian dollar expressed in United States dollars as reported by the Bank of Canada, was Cdn$1.00 = US$0.7433. The high and low exchange rates are intra-day values rather than noon or closing rates.

      Years Ended December 31,
  Three-Month        
  Period Ended        
  March 31, 2017   2016   2015
Average rate for period US$0.7577   US$0.7564   US$0.7756
High for period US$0.7711   US$0.8002   US$0.8562
Low for period US$0.7388   US$0.6821   US$0.7141

US ENFORCEMENT OF CIVIL LIABILITIES

Trillium Therapeutics Inc. is an Ontario corporation and its principal place of business is in Canada. Some or all of our directors and officers are resident outside of the United States and most or all of our assets and the assets of those persons are located outside of the United States. Consequently, it may be difficult for United States investors to effect service of process within the United States on the Corporation or our directors or officers, or to realize in the United States on judgments of courts of the United States predicated on civil liabilities under the US Securities Act of 1933, as amended, or the “US Securities Act”. You should not assume that Canadian courts would enforce judgments of United States courts obtained in actions against us or such persons predicated on the civil liability provisions of the United States federal securities laws or the securities or “blue sky” laws of any state within the United States or would enforce, in original actions, liabilities against us or such persons predicated on the United States federal securities or any such state securities or “blue sky” laws. We believe that a judgment of a United States court predicated solely upon civil liability under United States federal securities laws would probably be enforceable in Canada if the United States court in which the judgment was obtained has a basis for jurisdiction in the matter that would be recognized by a Canadian court for the same purposes. We also believe, however, that there is substantial doubt whether an action could be brought in Canada in the first instance on the basis of liability predicated solely upon United States federal securities laws.

We have filed with the SEC, concurrently with the registration statement on Form F-10 of which this prospectus supplement forms a part, an appointment of agent for service of process on Form F-X. Under the Form F-X, we appointed Puglisi & Associates as our agent for service of process in the United States in connection with any investigation or administrative proceeding conducted by the SEC, and any civil suit or action brought against or involving us in a United States court, arising out of or related to or concerning the offering of common shares under this prospectus supplement.

Luke Beshar, Robert Kirkman, Michael Moore and Thomas Reynolds are our directors who reside outside of Canada and they have appointed the Corporation at its business address as their agent for service of process. Purchasers are advised that it may not be possible for investors to enforce judgments obtained in Canada against any person or company that is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada, even if the party has appointed an agent for service of process.

S-3


FORWARD-LOOKING STATEMENTS

This prospectus supplement and the accompanying prospectus contain forward-looking statements within the meaning of applicable securities laws. All statements contained herein that are not clearly historical in nature are forward-looking, and the words “anticipate”, “believe”, “expect”, “estimate”, “may”, “will”, “could”, “leading”, “intend”, “contemplate”, “shall” and similar expressions are generally intended to identify forward-looking statements. Forward-looking statements in this prospectus supplement include, but are not limited to, statements with respect to:

  • our expected future loss and accumulated deficit levels;

  • our projected financial position and estimated cash burn rate;

  • our expectations about the timing of achieving milestones and the cost of our development programs;

  • our observations and expectations regarding the relative low binding profile of SIRPαFc with red blood cells compared to anti-CD47 monoclonal antibodies and proprietary CD47-blocking agents and the potential benefits to patients;

  • our requirements for, and the ability to obtain, future funding on favorable terms or at all;

  • our projections for the SIRPαFc development plan and progress of each of our products and technologies, particularly with respect to the timely and successful completion of studies and trials and availability of results from such studies and trials;

  • our ability to intensify the dose of TTI-621 with the goal of achieving increased blockade of CD47;

  • our expectations about the differentiated nature and potential for best-in-class product development programs and discovery research capabilities of Fluorinov Pharma Inc. or “Fluorinov”;

  • our ability to generate future product development programs with improved pharmacological properties and acceptable safety profiles using Fluorinov technology;

  • our expectations about whether various clinical and regulatory milestones with an existing Fluorinov compound will be achieved;

  • our expectations of the final quantum and form of any future contingent milestone payments related to the Fluorinov acquisition;

  • our expectations of the ability to secure the requisite approvals (including TSX or NASDAQ approvals) with respect to the issuance of any common shares in satisfaction of future milestone payments;

  • our expectations about our products’ safety and efficacy;

  • our expectations regarding our ability to arrange for and scale up the manufacturing of our products and technologies;

  • our expectations regarding the progress, and the successful and timely completion, of the various stages of the regulatory approval process;

  • our ability to secure strategic partnerships with larger pharmaceutical and biotechnology companies;

  • our strategy to acquire and develop new products and technologies and to enhance the safety and efficacy of existing products and technologies;

  • our plans to market, sell and distribute our products and technologies;

  • our expectations regarding the acceptance of our products and technologies by the market;

  • our ability to retain and access appropriate staff, management, and expert advisers;

  • our expectations with respect to existing and future corporate alliances and licensing transactions with third parties, and the receipt and timing of any payments to be made by us or to us in respect of such arrangements; and

  • our strategy with respect to the protection of our intellectual property.

S-4


All forward-looking statements reflect our beliefs and assumptions based on information available at the time the assumption was made. These forward-looking statements are not based on historical facts but rather on management’s expectations regarding future activities, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. By their nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, known and unknown, that contribute to the possibility that the predictions, forecasts, projections or other forward-looking statements will not occur. Factors that could cause future outcomes to differ materially from those set forth in the forward-looking statements include, but are not limited to:

  • the effect of substantial fluctuation of losses from quarter to quarter and year to year due to numerous external risk factors, and anticipation that we will continue to incur significant losses in the future;

  • the effect of continuing operating losses on our ability to obtain, on satisfactory terms, or at all, the capital required to maintain us as a going concern;

  • uncertainty as to our ability to raise additional funding to support operations, preclinical development, clinical trials, and commercialization of products;

  • the risks associated with the development of our product candidates which are at early stages of development;

  • the risks of reliance on third-parties to plan, conduct and monitor our preclinical studies and clinical trials;

  • our product candidates may fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or may not otherwise produce positive results;

  • the risks related to clinical trials including potential delays, cost overruns and the failure to demonstrate efficacy and safety;

  • the risks related to filing Investigational New Drug applications, or INDs, to commence clinical trials and to continue clinical trials if approved;

  • the risks of delays and inability to complete clinical trials due to difficulties enrolling patients;

  • risks associated with our inability to successfully develop companion diagnostics for our development candidates;

  • delays or negative outcomes from the regulatory approval process;

  • competition from other biotechnology and pharmaceutical companies;

  • our reliance on the capabilities and experience of our key executives and scientists and the resulting loss of any of these individuals;

  • our ability to fully realize the benefits of acquisitions;

  • risks relating to the increase in operating costs from expanding existing programs, acquisition of additional development programs and increased staff;

  • risk of negative results of clinical trials or adverse safety events by us or others related to our product candidates;

  • the potential for product liability claims;

  • our ability to achieve our forecasted milestones and timelines on schedule;

  • financial risks related to the fluctuation of foreign currency rates and expenses denominated in foreign currencies;

  • our ability to adequately protect our intellectual property and trade secrets;

  • risks related to changes in patent laws and their interpretations;

  • our ability to source and maintain licenses from third-party owners;

  • the risk of patent-related litigation and the ability to protect trade secrets; and

  • our expectations regarding our status as a passive foreign investment company,

all as further and more fully described under the section entitled “Risk Factors” in our annual information form dated March 10, 2017 or “AIF”, and our management’s discussion and analysis of financial condition and results of operations, dated May 11, 2017, or “MD&A”, both of which are incorporated by reference. See "Documents Incorporated By Reference".

Although the forward-looking statements contained in this prospectus supplement are based upon what our management believes to be reasonable assumptions, we cannot assure readers that actual results will be consistent with these forward-looking statements.

S-5


Any forward-looking statements represent our estimates only as of the date of this prospectus supplement and should not be relied upon as representing our estimates as of any subsequent date. We undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events, except as may be required by securities legislation.

S-6


DOCUMENTS INCORPORATED BY REFERENCE

Incorporated by reference into this prospectus supplement is certain information contained in documents filed by the Corporation with the securities regulatory authorities in Canada. This means that we are disclosing important information to you by referring you to those documents. The information incorporated by reference is deemed to be part of this prospectus supplement, except for any information superseded by information contained directly in this prospectus supplement or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein.

You may obtain copies of the documents incorporated by reference in this prospectus supplement on request without charge from our corporate secretary at 2488 Dunwin Drive, Mississauga, Ontario, L5L 1J9, Telephone (416) 595-0627, and are available electronically at www.sedar.com.

The following documents are specifically incorporated by reference in and form an integral part of the accompanying prospectus and this prospectus supplement:

  (i)

our annual information form (on Form 20-F) dated March 10, 2017 or  “AIF”;

     
  (ii)

our management information circular dated April 13, 2017 relating to our annual meeting of shareholders to be held on May 26, 2017;

     
  (iii)

our audited annual consolidated financial statements, together with the notes thereto, as at December 31, 2016 and 2015 and for the years then ended prepared under IFRS, as issued by the IASB, and the auditors’ report thereon addressed to our shareholders dated March 9, 2017;

     
  (iv)

our management’s discussion and analysis of financial condition and results of operations for the years ended December 31, 2016 and 2015 dated March 9, 2017;

     
  (v)

our unaudited interim condensed consolidated financial statements, together with the notes thereto, as at March 31, 2017 and 2016 and for the three months then ended prepared in compliance with International Accounting Standards 34, Interim Financial Reporting, dated May 11, 2017;

     
  (vi)

our MD&A for the three months ended March 31, 2017 and 2016;

     
  (vii)

our news release dated April 3, 2017 providing preclinical and clinical updates on our TTI-621 program;

     
  (viii)

our news release dated February 24, 2017 announcing additional details on ASCO-SITC conference presentation on TTI-621;

     
  (ix)

our news release dated February 15, 2017 announcing new pharmacokinetic and pharmacodynamic data from patients having received multiple weekly infusions of TTI-621; and

     
  (x)

our material change report dated February 7, 2017 with respect to our plan to advance a second SIRPαFc fusion protein, TTI-622, into clinical testing.

Any documents of the type referred to in the preceding paragraphs with respect to us or material change reports (excluding confidential material change reports), our unaudited interim consolidated financial statements and interim management’s discussion and analysis filed by us with the securities regulatory authorities in the Provinces of British Columbia, Alberta, Manitoba, Ontario and Nova Scotia after the date of this prospectus supplement and prior to the termination of the offering will be deemed to be incorporated by reference in this prospectus supplement.

When new documents of the type referred to in the paragraphs above are filed by the Corporation with the securities regulatory authorities in the Provinces of British Columbia, Alberta, Manitoba, Ontario and Nova Scotia during the currency of this prospectus supplement, such documents will be deemed to be incorporated by reference in this prospectus supplement and the previous documents of the type referred to in the paragraphs above and all material change reports, unaudited interim consolidated financial statements and certain prospectus supplements filed by us with the securities regulatory authorities in the Provinces of British Columbia, Alberta, Manitoba, Ontario and Nova Scotia before the commencement of our financial year in which the new documents are filed will no longer be deemed to be incorporated by reference in this prospectus supplement.

S-7


In addition, to the extent that any document or information incorporated by reference into this prospectus supplement is included in any report that is filed with or furnished to the SEC, such document or information shall be deemed to be incorporated by reference as an exhibit to the registration statement on Form F-10 of which this prospectus supplement forms a part. In addition, we may incorporate by reference into the registration statement of which this prospectus supplement forms a part, other information from documents that we file with or furnish to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act, if and to the extent expressly provided therein. Any statement contained in this prospectus supplement or in a document incorporated or deemed to be incorporated by reference in this prospectus supplement shall be deemed to be modified or superseded for purposes of this prospectus supplement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus supplement.

S-8


 


SUMMARY OF THE OFFERING

The following is a summary of the principal features of the offering and is subject to, and should be read together with the more detailed information, financial data and statements contained elsewhere in, and incorporated by reference into, this prospectus supplement and the accompanying prospectus.
 

Issuer

Trillium Therapeutics Inc.

 

Issue

2,750,000 common shares (US$13,750,000).

 

 

3,250,000 Series II First Preferred Shares (US$16,250,000).

 

Price to the Public

US$5.00 per common share.

 

 

US$5.00 per Series II First Preferred Share.

 

Use of Proceeds

The net proceeds of the offering (being US$28,200,000 assuming no exercise of the option to purchase additional shares) will be used by the Corporation to: (i) advance and expand the current Phase 1 trial of SIRPαFc (TTI-621) in patients with advanced hematologic malignancies, (ii) advance and expand the current solid tumor Phase 1 trial of SIRPαFc (TTI-621) in patients with relapsed and refractory, percutaneously-accessible cancers through the dose escalation and expansion phases, (iii) initiate and conduct a Phase 1 trial for TTI-622 with dose escalation and expansion phase focused on combination treatment, and (iv) for general corporate and working capital purposes. See “Use of Proceeds”.

 

Right to Nominate a Director and Observer

One of our existing shareholders has indicated an interest in purchasing Series II First Preferred Shares in this offering at the public offering price. However, because this indication of interest is not a binding agreement or commitment to purchase, this shareholder may elect not to purchase any shares in this offering. In connection with the potential acquisition of Series II First Preferred Shares by this existing shareholder, we intend to enter into an investment agreement with such shareholder. The investment agreement will provide this shareholder the right, but not the obligation, for so long as it beneficially owns at least 10% of the adjusted share capital of the Corporation, calculated on a fully-diluted basis, to nominate one person for election to our board of directors, subject to meeting applicable legal and stock exchange requirements, and we have the obligation to appoint such director whose term will run until the next annual meeting of shareholders. Thereafter, we are required to nominate such director to be a director at any meeting of shareholders called for the purposes of electing directors and to use commercially reasonable efforts to ensure that such director is elected to the Board of Directors, including soliciting proxies in support of his or her election and taking the same actions taken by us to ensure the election of the other nominees selected by the Board of Directors for election to the Board of Directors. In addition, until such time as the existing shareholder exercises its right to nominate a member of our board of directors, and so long as the existing shareholder’s nominee is not an employee, officer, director or limited partner of such shareholder, then such shareholder shall have the right, but not the obligation, to appoint an observer to our board of directors, who must be an employee, officer or director of such shareholder. The observer will have the right to receive notice of and attend the meetings of the board of directors, and will have the right to address the board of directors at any of its meetings, but will not have any right to vote at any meeting of the board of directors. In addition, we have agreed to provide this existing shareholder with certain registration rights in the event that such shareholder and its joint actors are deemed to be “affiliates” for purposes of applicable U.S. securities laws. The investment agreement is contingent upon the closing of the offering.

 

 

Risk Factors

An investment in the common shares and Series II First Preferred Shares is speculative and involves a high degree of risk. Each purchaser should carefully consider the risks described in this prospectus supplement under the heading “Risk Factors” and elsewhere, and the documents incorporated by reference therein and herein (including under the heading “Risk Factors” in the AIF and MD&A) and including risks with respect to: expectation of future losses and lack of profitability; lack of product revenue; early stage of development of our products; reliance on third parties for our preclinical studies and clinical trials; reliance on contract manufacturers; failure of our product candidates to demonstrate safety and efficacy; delays in clinical testing; delays in patient enrolment; development of companion diagnostics; ability to obtain regulatory approvals; additional financing requirements; competition; reliance on key personnel; employee misconduct; acquisitions, collaborations and in-licensing; negative clinical results; product liability claims; failure to achieve milestones; exposure to foreign exchange rates; protection of intellectual property; third party licenses; changes in patent laws; patent litigation; protection of trade secrets; volatile common share price; dilution through future sales or issuances of equity securities; status as a “passive foreign investment company”; enforcement of judgements by non- Canadian investors; decline in market price; status as an “emerging growth company”; failure to maintain an effective system of internal controls; status as a foreign private issuer; our charter documents and certain Canadian legislation; and broad discretion in use of proceeds of the offering.
 

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Trading Symbol

NASDAQ: TRIL

   
 

TSX: TRIL

   

We do not intend to apply for listing of our Series II First Preferred Shares on any national securities exchange or other nationally recognized trading system.
 

S-10


THE CORPORATION

The following is a summary of information pertaining to the Corporation and does not contain all the information about the Corporation that may be important to you. You should read the more detailed information including but not limited to the AIF, financial statements and management’s discussion and analysis and related notes that are incorporated by reference into and are considered to be a part of this prospectus supplement and please refer to the heading “The Corporation” beginning on page 6 of the accompanying prospectus.

Organization of the Corporation

We were incorporated under the Business Corporations Act (Alberta) on March 31, 2004 as Neurogenesis Biotech Corp. On October 19, 2004, we amended our articles of incorporation to change our name from Neurogenesis Biotech Corp. to Stem Cell Therapeutics Corp., or “SCT”. On November 7, 2013 SCT was continued under the Business Corporations Act (Ontario), or “OBCA”. On June 1, 2014 we filed articles of amalgamation to amalgamate SCT with our wholly-owned subsidiary, Trillium Therapeutics Inc., and renamed the combined company Trillium Therapeutics Inc. On January 1, 2017 we filed articles of amalgamation to amalgamate the Corporation with our wholly-owned subsidiary Fluorinov. We are a company domiciled in Ontario, Canada.

As of December 31, 2016 we had two wholly-owned subsidiaries, Trillium Therapeutics USA Inc., which was incorporated March 26, 2015 in the State of Delaware and Fluorinov which was acquired on January 26, 2016. A wholly-owned and inactive subsidiary, Stem Cell Therapeutics Inc., was dissolved on September 17, 2014.

Our head and registered offices are located at 2488 Dunwin Drive, Mississauga, Ontario, L5L 1J9. Our website address is www.trilliumtherapeutics.com. Information contained on, or otherwise accessed through, our website shall not be deemed to be a part of this prospectus supplement or the accompanying prospectus and such information is not incorporated by reference herein or therein.

Business of the Corporation

We are a clinical stage immuno-oncology company developing innovative therapies for the treatment of cancer. Our lead program, TTI-621, is a SIRPαFc fusion protein that consists of the extracellular CD47-binding domain of human SIRPα linked to the Fc region of a human immunoglobulin G1 (IgG1). It is designed to act as a soluble decoy receptor, preventing CD47 from delivering its inhibitory or “do not eat” signal. Neutralization of the inhibitory CD47 signal enables the activation of macrophage anti-tumor effects by pro-phagocytic or “eat” signals. The IgG1 Fc region of TTI-621 may also assist in the activation of macrophages by engaging Fc receptors. Two Phase I clinical trials evaluating TTI-621 are ongoing. A second SIRPαFc fusion protein, TTI-622, is also in preclinical development. TTI-622 consists of the extracellular CD47-binding domain of human SIRPα linked to an IgG4 Fc region, which has a decreased ability to engage Fc receptors than an IgG1 Fc. We plan to submit an IND for TTI-622 in the second half of 2017 and begin recruiting patients into a Phase I clinical trial in early 2018. Both SIRPαFc fusion proteins enable CD47 blockade with different levels of Fc receptor engagement on macrophages and thus may find unique applications.

We also have a proprietary medicinal chemistry platform, using unique fluorine chemistry, which permits the creation of new chemical entities with improved pharmacological properties from validated drugs and drug candidates. Stemming from this platform, our most advanced preclinical program is an orally-available bromodomain inhibitor, followed by an epidermal growth factor receptor antagonist. In addition, a number of compounds directed at undisclosed immuno-oncology targets are currently in the discovery phase.

S-11


RISK FACTORS

Investing in our common shares and Series II First Preferred Shares is speculative and involves a high degree of risk. You should carefully consider the risks below and under the heading “Risk Factors” in the accompanying prospectus and in the AIF, MD&A, and the other documents incorporated by reference into this prospectus supplement that summarize the risks that may materially affect our business before making an investment in our common shares and Series II First Preferred Shares. See “Documents Incorporated by Reference”. If any of these risks occur, our business, results of operations or financial condition could be materially adversely affected. In that case, the trading price of our common shares could decline, and you may lose all or part of your investment. The risks set out in the documents indicated above are not the only risks we face. You should also refer to the other information set forth in this prospectus supplement and the documents incorporated by reference.

Risks Related to the Offering

We have broad discretion in how we use the net proceeds of this offering, and we may not use these proceeds in a manner desired by our securityholders.

Our management will have broad discretion with respect to the use of the net proceeds from this offering and investors will be relying on the judgment of our management regarding the application of these proceeds. Our management could spend most of the net proceeds from this offering in ways that our shareholders may not desire or that do not yield a favorable return. You will not have the opportunity, as part of your investment in our common shares and Series II First Preferred Shares, to influence the manner in which the net proceeds of this offering are used. At the date of this prospectus supplement, we intend to use the net proceeds from this offering to fund our ongoing drug development activities and for general corporate purposes. See ‘‘Use of Proceeds.’’ However, our needs may change as our business and the industry we address evolve. As a result, the proceeds we receive in this offering may be used in a manner significantly different from our current expectations.

We are likely a “passive foreign investment company”, which may have adverse US federal income tax consequences for US shareholders.

US investors should be aware that we believe we were classified as a passive foreign investment company, or PFIC, during the tax year ended December 31, 2016, and based on current business plans and financial expectations, we expect that we will be a PFIC for the current tax year and may be a PFIC in future tax years. If we are a PFIC for any year during a US shareholder’s holding period of our common shares or Series II First Preferred Shares, then such US shareholder generally will be required to treat any gain realized upon a disposition of our common shares or Series II First Preferred Shares, or any “excess distribution” received on our common shares or Series II First Preferred Shares, as ordinary income, and to pay an interest charge on a portion of such gain or distributions, unless the shareholder makes a timely and effective “qualified electing fund” election, or QEF Election, or a “mark-to-market” election with respect to our shares. A US shareholder who makes a QEF Election generally must report on a current basis its share of our net capital gain and ordinary earnings for any year in which we are a PFIC, whether or not we distribute any amounts to our shareholders. A US shareholder who makes the mark-to-market election for our common shares generally must include as ordinary income each year the excess of the fair market value of the common shares over the shareholder’s adjusted tax basis therein. This paragraph is qualified in its entirety by the discussion in the section of this prospectus supplement entitled “Certain US Federal Income Tax Considerations”. Each US shareholder should consult its own tax advisors regarding the PFIC rules and the US federal income tax consequences of the acquisition, ownership and disposition of our common shares or Series II First Preferred Shares.

Because the public offering price is substantially higher than the net tangible book value per share, you will experience immediate and substantial dilution.

The public offering price will be substantially higher than the net tangible book value per share of our common shares immediately following this offering. Therefore, if you purchase our common shares in this offering, you will experience immediate and substantial dilution in the price you pay for our common shares as compared to its net tangible book value, assuming full conversion of our Series II First Preferred Shares sold in this offering. If you purchase our Series II First Preferred Shares in this offering, and assuming that you convert your Series II First Preferred Shares into common shares, you will experience the same dilution per common share. To the extent outstanding options and warrants to purchase common shares are exercised, there will be further dilution.

S-12


The value of our Series II First Preferred Shares is directly tied to the value of our common shares, and any change in the value of our common shares will be reflected in the value of our Series II First Preferred Shares.

There is no established public trading market for our Series II First Preferred Shares, and we do not expect a market to develop. In addition, we do not intend to apply for listing of our Series II First Preferred Shares on any national securities exchange or other nationally recognized trading system. As a result, because each offered Series II First Preferred Shares will be convertible into one common share, subject to adjustment and to certain limitations, we expect the value of our Series II First Preferred Shares to have a value directly tied to the value of our common shares. Accordingly, any change in the trading price of our common shares will be reflected in the value of our Series II First Preferred Shares, and the price of our common shares may be volatile.

S-13


USE OF PROCEEDS

The net proceeds that we will receive from the offering (assuming no exercise of the underwriters’ option to purchase additional shares), after deducting fees payable to the underwriter will be approximately US$28,200,000. We intend to use the net proceeds to:

(i) advance the current Phase 1 trial of SIRPαFc (TTI-621) in patients with advanced hematologic malignancies to expand potentially promising patient populations, add new cancer indications and evaluate additional combination cohorts. Proceeds will also support the broader research and development effort supporting the SIRPαFc program including, but not limited to, preclinical, manufacturing and regulatory activities;

(ii) advance the current solid tumor Phase 1 trial of SIRPαFc (TTI-621) in patients with relapsed and refractory, percutaneously-accessible cancers through the dose escalation and expansion phases, add additional patient populations with accessible tumor types and new combination cohorts;

(iii) initiate and conduct a Phase 1 trial for SIRPαFc (TTI-622) with dose escalation and expansion phases focused on combination treatment; and

(iv) for general corporate and working capital purposes, all as more particularly set out in the table below:

Business Objective  

Amount (US$)

     
SIRPαFc (TTI-621)

Estimated time frame

 
     
Advance and expand the current Phase 1 trial of SIRPαFc (TTI-621) in patients with advanced hematologic malignancies 30 months 17,000,000
  30 months 2,000,000
Advance and expand the current solid tumor Phase 1 trial of SIRPαFc (TTI-621) in patients with relapsed and refractory, percutaneously-accessible cancers through the dose escalation and expansion phases.  
     
SIRPαFc (TTI-622)    
     
Initiate and conduct a Phase 1 trial for TTI-622 with dose escalation and expansion phase focused on combination treatment. 30 months 5,200,000
     
General    
     
General Corporate and Working Capital   30 months 4,000,000

All net proceeds that are not allocated will be placed in short-term interest bearing investment grade securities until required for use in accordance with our investment policy.

Due to the nature of research and development and the product commercialization and regulatory process, there is no assurance that the milestones referenced above will be achieved and there can be no assurance with respect to the time, funds or resources that may be required. We expect that additional specific milestones will be identified as the clinical trials progress. Only a portion of the funds for the above business objectives are in place and allocated at present. If we are unable to raise additional financing as contemplated above, our pace of development may be reduced. Accordingly, while we intend to spend the funds available to it as stated in this prospectus supplement, there may be circumstances where, for business reasons as determined by our directors, a reallocation of funds may be deemed prudent or necessary. The timing and actual use of the net proceeds may vary depending on the actual amount raised pursuant to the offering, operating and capital needs, the progress and outcome of our research and development programs and clinical trials, the progress of any formal review of strategic alternatives, business and operations circumstances. The allocation of the proceeds of the offering will be at the sole discretion of the management of the Corporation. See “Risk Factors” in this prospectus supplement. While actual expenditures may differ from these amounts and allocations, we expect to use the net proceeds in furtherance of our business.

S-14


CAPITALIZATION

Since March 31, 2017, the date of our most recently filed interim unaudited condensed consolidated financial statements, there have been no changes in our capitalization.

PRIOR SALES

Prior Sales

We have not issued any common shares from treasury for the 12-month period before the date of this prospectus supplement, other than as follows:

Date of Issuance

Price per Security or
Exercise Price
(as applicable)
Number of and
Description of Securities
September 8, 2016 $12.00 Issuance of 3,000 common shares on exercise of warrants
October 7, 12, 13, 14, 26, 2016 $12.00 Issuance of 16,045 common shares on exercise of warrants
October 11, 2016 $8.40 Issuance of 1,190 common shares on exercise of warrants
November 1, 2, 2016 $12.00 Issuance of 10,066 common shares on exercise of warrants

Trading Price and Volume

Our common shares are traded on NASDAQ and the TSX under the symbols “TRIL”. The following table sets forth, for the periods indicated, (i) the reported high and low prices (in United States dollars) and the volume of common shares traded for each month on NASDAQ and (ii) the reported high and low prices (in Canadian dollars) and volume of common shares traded for each month on the TSX.



Calendar Period
NASDAQ (US$) TSX (Cdn$)

High

Low
Total
Volume (#)

High

Low
Total
Volume (#)
May 2016 11.37 9.31 1,215,744 14.77 12.01 110,384
June 2016 13.52 8.38 2,407,602 17.48 11.00 198,652
July 2016 9.30 8.011 685,471 12.28 10.46 88,400
August 2016 15.14 8.69 2,395,964 19.20 11.30 316,825
September 2016 16.39 12.32 1,959,166 21.45 16.09 141,906
October 2016 17.70 13.50 1,511,067 23.48 18.20 125,100
November 2016 15.50 6.75 7,684,345 20.82 9.10 554,914
December 2016 7.945 5.25 3,641,631 10.27 7.12 457,274
January 2017 6.30 4.50 1,950,986 8.18 5.90 323,944
February 2017 6.90 4.70 2,357,995 9.01 6.15 418,307
March 2017 7.10 5.505 1,345,793 9.30 7.44 213,912
April 2017 6.95 5.85 914,112 9.30 7.91 136,543
May 1 to May 25, 2017 6.40 5.45 794,872 8.77 7.31 91,699

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DESCRIPTION OF SECURITIES OFFERED UNDER THIS PROSPECTUS SUPPLEMENT

Common Shares

The holders of common shares are entitled to receive notice of and to attend all annual and special meetings of our shareholders and to one vote per share held at each such meeting, and they are entitled to receive dividends as determined and declared by our board of directors.

Subject to the rights of the holders of any other class of our shares entitled to receive dividends in priority to or concurrently with the holders of the common shares, our board of directors may in its sole discretion declare dividends on the common shares to the exclusion of any other class of shares of the Corporation.

In the event of our liquidation, dissolution or winding up or other distribution of our assets among our shareholders for the purpose of winding up our affairs, the holders of the common shares shall, subject to the rights of the holders of any other class of shares entitled to receive our assets upon such a distribution in priority to or concurrently with the holders of the common shares, be entitled to participate in the distribution. Such distribution shall be made in equal amounts per share on all the common shares at the time outstanding without preference or distinction.

Series II First Preferred Shares

The holders of Series II First Preferred Shares are not entitled to vote at any meeting of our shareholders (except in limited circumstances provided for in the Business Corporations Act (Ontario)).

The holders of Series II First Preferred Shares are entitled to receive dividends as determined and declared at the discretion of our board of directors on a parity basis with the holders of shares of the other series of First Preferred Shares and, at the discretion of our board of directors, either in priority to, or equally on a share-for-share basis with, holders of our common shares or Class B shares. If any amount of cumulative dividends, whether or not declared, or declared non-cumulative dividends, with respect to shares of a series of our First Preferred Shares is not paid in full, the shares of the series will participate on a pro rata basis with the shares of all other series of that class of shares with respect to all accumulated cumulative dividends, whether or not declared, and all declared non-cumulative dividends.

Each issued and fully paid Series II First Preferred Share may at any time be converted, at the option of the holder, into one common share, subject to adjustment. Notwithstanding the foregoing, holders of Series II First Preferred Shares will be prohibited from converting Series II First Preferred Shares into common shares if, as a result of such conversion, the holder, together with its affiliates, would own more than 4.99% (which the holder may elect to increase or decrease by written notice to us to any other percentage specified in such notice, provided that any increase (but not decrease) will not be effective until the 61st day after such notice) of the total number of our common shares then issued and outstanding, unless the holder gives us at least 61 days prior notice of an intent to convert into common shares that would cause the holder to own more than 4.99% of the total number of our common shares then issued and outstanding.

In addition, we will not be required to deliver to a holder any common shares upon a conversion of our Series II First Preferred Shares into common shares if our common shares are then listed and posted for trading on the Toronto Stock Exchange (or the TSX Venture Exchange) and to the extent that the conversion would result in the holder, together with any person acting jointly or in concert with the holder within the meaning of the Securities Act (Ontario), beneficially owning or exercising control or direction over common shares representing more than:

            1.        9.99% of our outstanding common shares unless the holder (or, where the holder is not an individual, any director, officer or insider of the holder) has first provided:

            (a)        the stock exchange with a personal information form pursuant to the rules of that stock exchange and the form has been approved by the stock exchange; and

            (b)        a copy of the approval of the personal information form by the stock exchange to us; and

            2.        19.99% of our outstanding common shares, unless we have received approval from the stock exchange and the holders of our common shares of the issuance of common shares at a meeting of holders of common shares which we will call, at our expense, in accordance with the applicable policies of the stock exchange.

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In the event of our liquidation, dissolution or winding-up, whether voluntary or involuntary, or in the event of any other distribution of our assets among our shareholders for the purpose of winding-up our affairs, or in the event of a reduction or redemption of our capital stock, the holders of Series II First Preferred Shares are entitled to receive an amount per share equal to that amount of money that we received as consideration for such Series II First Preferred Shares or, in the event that Series II First Preferred Shares were not issued for money, then the amount equal to the fair value of any property we received as consideration for the issuance of such Series II First Preferred Shares divided by the number of Series II First Preferred Shares issued, the whole before any amount shall be paid by us or any of our assets shall be distributed to holders of our common shares and Class B Shares. After such payment, the holders of Series II First Preferred Shares are not entitled to share in any further distribution of our property or assets. If any amount payable on return of capital in the event of our liquidation, dissolution or winding-up in respect of shares of a series of our First Preferred Shares is not paid in full, the shares of the series will participate on a pro rata basis with the shares of all other series of that class of shares with respect to all amounts payable on return of capital in the event of our liquidation, dissolution or winding-up.

If a fundamental transaction (as defined below) occurs while any of the Series II First Preferred Shares are outstanding, then a holder of Series II First Preferred Shares shall have the right to receive (in exchange for such shares) in the event that our common shares are exchanged for other securities, cash or property in the fundamental transaction, the same kind and amount of securities, cash and property as it would have been entitled to receive upon the occurrence of such fundamental transaction if such holder had been, immediately prior to such fundamental transaction, the holder of our common shares. If the holders of our common shares are given any choice as to the securities, cash or property to be received in a fundamental transaction, then the holder of our Series II First Preferred Shares shall be given the same choice as to the alternate consideration it receives upon any conversion of Series II First Preferred Shares following such fundamental transaction.

In the event of a “takeover bid” that is a “formal bid” (as such terms are defined in the Securities Laws in the Province of Ontario) for our common shares, the offeror of such bid shall make an offer to acquire the same percentage of our outstanding Series II First Preferred Shares as the percentage of our common shares for which the formal bid is being made, and such offer shall be on the same terms and for the same amount and kind of per share consideration, as adjusted, that is offered to the holders of our common stock under the formal bid.

To the extent necessary to effectuate these provisions, to the extent the surviving corporation following a fundamental transaction is not our company, any successor or surviving entity in the fundamental transaction shall include in its organizational documents shares having the same terms and conditions as our Series II First Preferred Shares and shall issue to the holders of our Series II First Preferred Shares new preferred shares consistent with the foregoing provisions.

“Fundamental Transaction” means (A) we effect any amalgamation, merger, business combination or other transaction with another person, other than a wholly-owned subsidiary, or an arrangement pursuant to the Business Corporations Act (Ontario) or another transaction pursuant to which a person, or group of person acting jointly or in concert, acquires all of our issued and outstanding common shares, (B) we effect any sale, lease or other disposition of all or substantially all of our assets, or (C) we effect any reclassification of our common shares or any compulsory share exchange pursuant (other than as a result of certain dividends or subdivisions) to which our common shares are effectively converted into or exchanged for other securities, cash or property, or any similar transaction or series of transactions involving us or our subsidiaries, directly or indirectly.

S-17


UNDERWRITING

We and the underwriters for the offering named below have entered into an underwriting agreement with respect to the common shares and Series II First Preferred Shares being offered. Subject to the terms and conditions of the underwriting agreement, each underwriter has severally agreed to purchase from us the number of common shares and Series II First Preferred Shares set forth opposite its name below. Cowen and Company, LLC is the representative of the underwriters.

        Number of Series II
Name   Number of Common Shares   First Preferred Shares
         
Cowen and Company, LLC     2,475,000     2,925,000
Ladenburg Thalmann & Co. Inc.     275,000     325,000
         
         
Total     2,750,000     3,250,000

The underwriters are committed to purchase all the common shares and Series II First Preferred Shares offered by us if they purchase any shares. The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of non-defaulting underwriters may also be increased or the offering may be terminated. The underwriting agreement provides that the obligations of the several underwriters to pay for and accept delivery of common shares and Series II First Preferred Shares offered hereby are subject to the approval of certain legal matters by their counsel and to certain other conditions. The underwriters may terminate their obligations under the underwriting agreement by notice given by the representative to us, if, after the execution and delivery of the underwriting agreement and prior to the closing time (i) there has been, in the judgment of the representative, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of us and our subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, (ii) there has occurred any material adverse change in the financial markets in the United States, Canada or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any other change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the representative, impracticable or inadvisable to proceed with the completion of this offering or to enforce contracts for the sale of the securities offered hereby, (iii) trading in any of our securities has been suspected or materially limited by the Securities and Exchange Commission, NASDAQ, the Ontario Securities Commission or any other applicable Canadian provincial securities regulator or the TSX (other than temporary trading halts), (iv) trading generally on the NYSE MKT or the New York Stock Exchange, or in the NADAQ Global Select Market, NASDAQ Global Market or NASDAQ Capital Market or on the TSX has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by order of the Securities and Exchange Commission, FINRA or any other governmental entity, (v) a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States, Canada or with respect to Clearstream or Euroclear systems in Europe, or (vi) if a banking moratorium has been declared by either U.S. federal, Canadian or New York authorities.

The underwriters propose to offer the common shares and Series II First Preferred Shares directly to the public at the public offering price set forth on the cover page of this prospectus supplement and to certain dealers at that price less a concession not in excess of US$0.18 per share. After the public offering of the shares, the offering price and other selling terms may be changed by the underwriters. Any reduction in the offering price will not affect the proceeds received by us. Subject to the restrictions discussed herein, sales of shares made outside of the United States may be made by affiliates of the underwriters.

The underwriters have an option to buy from us up to an additional 15% of the number of common shares offered hereby. The underwriters have 30 days from the date of this prospectus supplement to exercise this option to purchase additional common shares. If any common shares are purchased with this option to purchase additional common shares, the underwriters will purchase common shares in approximately the same proportion as shown in the table above. If any additional common shares are purchased, the underwriters will offer the additional common shares on the same terms as those on which the common shares are being offered.

The underwriting fee is equal to the public offering price per share less the amount paid by the underwriters to us per share. The underwriting fee is US$0.30 per common share and US$0.30 per Series II First Preferred Share. The following table shows the per share and total underwriting discounts and commissions to be paid to the underwriters assuming both no exercise and full exercise of the underwriters’ option to purchase additional shares.

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    No Exercise     Full Exercise  
                    Series II First                     Series II First  
        Common           Preferred           Common           Preferred    
        Shares           Shares           Shares             Shares    
                                                 
Per Share   US$     0.30     US$     0.30     US$     0.30     US$     0.30  
                               
Total   US$     825,000     US$     975,000     US$     948,750     US$     975,000  

We estimate that the total expenses of this offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding the underwriting discounts and commissions, will be approximately US$250,000.

We have agreed that we will not (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise dispose of, directly or indirectly, or file with the Securities and Exchange Commission a registration statement under the Securities Act relating to, any of our common shares, Series II First Preferred Shares or securities convertible into or exchangeable or exercisable for any of our common shares or Series II First Preferred Shares, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, or (ii) enter into any swap or other arrangement that transfers all or a portion of the economic consequences associated with the ownership of any common shares, Series II First Preferred Shares or any such other securities (regardless of whether any of these transactions are to be settled by the delivery of common shares or such other securities, in cash or otherwise), in each case without the prior written consent of Cowen and Company, LLC for a period of 90 days after the date of this prospectus supplement, other than our common shares and Series II First Preferred Shares (including the common shares issuable upon conversion of the Series II First Preferred Shares) to be sold hereunder or any of our common shares or Series II First Preferred Shares issued upon the exercise of options granted under our existing share-based compensation plans.

Our directors, executive officers and certain other shareholders have entered into lock-up agreements with the underwriters prior to the commencement of this offering pursuant to which each of these persons, with limited exceptions, for a period of 90 days after the date of this prospectus supplement, may not, without the prior written consent of Cowen and Company, LLC, (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any of our common shares, Series II First Preferred Shares or any securities convertible into, or exercisable or exchangeable for, our common shares or Series II First Preferred Shares (including, without limitation, common shares, Series II First Preferred Shares or such other securities which may be deemed to be beneficially owned by such directors and executive officers in accordance with the rules and regulations of the SEC and securities which may be issued upon exercise of an option or warrant) or publicly disclose the intention to make any offer, sale, pledge or disposition or (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the common shares, Series II First Preferred Shares or such other securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of common shares, Series II First Preferred Shares or such other securities, in cash or otherwise, or (3) engage in any short selling of any common shares or Series II First Preferred Shares, subject to limited exceptions which include:

  • transfers of securities as a bona fide gift or gifts;
  • transfers of securities to any trust for the direct or indirect benefit of the holder or the immediate family of the holder;
  • a distribution or other transfer by a partnership to its partners or former partners or by a limited liability company to its members or retired members or by a corporation to its stockholders or former stockholders or to any wholly owned subsidiary of such corporation;
  • to the holder’s affiliates or to any investment fund or other entity controlled or managed by the holder;
  • pursuant to a qualified domestic relations order or in connection with a divorce settlement;
  • by will or intestate succession upon the death of the undersigned; or
  • to us in satisfaction of any tax withholding obligation.

In addition, the lock-up agreements do not limit (i) the transfer of the holder’s securities in connection with the termination of the holder’s services to us, provided that no filing under the Exchange Act is required or other public announcement is required or made, (ii) the exercise or exchange by the holder of any option or warrant to acquire any common shares, preferred shares or options to purchase common shares or preferred shares, pursuant to any stock option, stock bonus or other stock plan or arrangement, provided that the underlying securities continue to be subject to the transfer restrictions, (iii) the transfer of securities upon the completion of a bona fide third party tender offer, merger, consolidation or other similar transaction made to all holders of our securities involving a change in control, provided that if such transaction is not completed, the holder’s securities remain subject to the transfer restrictions, (iv) the conversion of outstanding preferred shares into common shares, provided that any such common shares received upon such conversion shall be subject to the transfer restrictions and (v) the establishment of certain 10b5-1 trading plans under the Exchange Act.

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We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act.

Our common shares are listed on the Toronto Stock Exchange and on the NASDAQ Capital Market under the symbol “TRIL”. The Corporation has applied to list the common shares to be issued under the offering on the NASDAQ Capital Market and the Toronto Stock Exchange. Listing on the NASDAQ Capital Market and the Toronto Stock Exchange is subject to the Corporation fulfilling all of the requirements of the NASDAQ Capital Market and the Toronto Stock Exchange, respectively. There is no established public trading market for our Series II First Preferred Shares, and we do not expect a market to develop. In addition, we do not intend to apply for listing of our Series II First Preferred Shares on any national securities exchange or other nationally recognized trading system.

In connection with this offering, the underwriters may engage in stabilizing transactions, which involves making bids for, purchasing and selling common shares in the open market for the purpose of preventing or retarding a decline in the market price of the common shares while this offering is in progress. These stabilizing transactions may include making short sales of the common shares, which involves the sale by the underwriters of a greater number of common shares than they are required to purchase in this offering, and purchasing common shares on the open market to cover positions created by short sales. Short sales may be “covered” shorts, which are short positions in an amount not greater than the underwriters’ option to purchase additional shares referred to above, or may be “naked” shorts, which are short positions in excess of that amount. The underwriters may close out any covered short position either by exercising their option to purchase additional shares, in whole or in part, or by purchasing shares in the open market. In making this determination, the underwriters will consider, among other things, the price of shares available for purchase in the open market compared to the price at which the underwriters may purchase shares through the option to purchase additional shares. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common shares in the open market that could adversely affect investors who purchase in this offering. To the extent that the underwriters create a naked short position, they will purchase shares in the open market to cover the position.

The underwriters have advised us that, pursuant to Regulation M of the Securities Act, they may also engage in other activities that stabilize, maintain or otherwise affect the price of the common shares, including the imposition of penalty bids. This means that if the representatives of the underwriters purchase common shares in the open market in stabilizing transactions or to cover short sales, the representatives can require the underwriters that sold those shares as part of this offering to repay the underwriting discount received by them.

These activities may have the effect of raising or maintaining the market price of the common shares or preventing or retarding a decline in the market price of the common shares, and, as a result, the price of the common shares may be higher than the price that otherwise might exist in the open market. If the underwriters commence these activities, they may discontinue them at any time. The underwriters may carry out these transactions on the NASDAQ Capital Market, in the over-the-counter market or otherwise.

In addition, in connection with this offering certain of the underwriters (and selling group members) may engage in passive market making transactions in our common shares on the NASDAQ Capital Market prior to the pricing and completion of this offering. Passive market making consists of displaying bids on the NASDAQ Capital Market no higher than the bid prices of independent market makers and making purchases at prices no higher than these independent bids and effected in response to order flow. Net purchases by a passive market maker on each day are generally limited to a specified percentage of the passive market maker’s average daily trading volume in the common shares during a specified period and must be discontinued when such limit is reached. Passive market making may cause the price of our common shares to be higher than the price that otherwise would exist in the open market in the absence of these transactions. If passive market making is commenced, it may be discontinued at any time.

Conflicts of Interest

Certain of the underwriters and their affiliates have provided in the past to us and our affiliates and may provide from time to time in the future certain commercial banking, financial advisory, investment banking and other services for us and such affiliates in the ordinary course of their business, for which they have received and may continue to receive customary fees and commissions. In addition, from time to time, certain of the underwriters and their affiliates may effect transactions for their own account or the account of customers, and hold on behalf of themselves or their customers, long or short positions in our debt or equity securities or loans, and may do so in the future.

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International Selling Restrictions

Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus supplement in any jurisdiction where action for that purpose is required. The securities offered by this prospectus supplement may not be offered or sold, directly or indirectly, nor may this prospectus supplement or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus supplement comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus supplement. This prospectus supplement does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus supplement in any jurisdiction in which such an offer or a solicitation is unlawful.

Canada

The common shares and Series II First Preferred Shares described in this prospectus supplement are not being offered, sold or delivered, directly or indirectly, to any person in Canada or over the Toronto Stock Exchange. Each underwriter has agreed that it will not, directly or indirectly, offer, sell or deliver any common shares or Series II First Preferred Shares purchased by it to any person in Canada or over the Toronto Stock Exchange, and that it will include a comparable provision in any selling group member agreement that it may enter into.

United Kingdom

This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling with Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). The securities are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

European Economic Area

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), from and including the date on which the European Union Prospectus Directive (the “EU Prospectus Directive”) was implemented in that Relevant Member State (the “Relevant Implementation Date”) an offer of securities described in this prospectus supplement may not be made to the public in that Relevant Member State prior to the publication of a prospectus in relation to the shares which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the EU Prospectus Directive, except that, with effect from and including the Relevant Implementation Date, an offer of securities described in this prospectus supplement may be made to the public in that Relevant Member State at any time:

  • to any legal entity which is a qualified investor as defined under the EU Prospectus Directive;
  • to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified investors as defined in the EU Prospectus Directive); or
  • in any other circumstances falling within Article 3(2) of the EU Prospectus Directive;

provided that no such offer of securities described in this prospectus supplement shall result in a requirement for the publication by us of a prospectus pursuant to Article 3 of the EU Prospectus Directive.

For the purposes of this provision, the expression an “offer of securities to the public” in relation to any securities in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable an investor to decide to purchase or subscribe for the securities, as the same may be varied in that Member State by any measure implementing the EU Prospectus Directive in that Member State. The expression “EU Prospectus Directive” means Directive 2003/71/EC (and any amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State) and includes any relevant implementing measure in each Relevant Member State, and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

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Israel

In the State of Israel this prospectus supplement shall not be regarded as an offer to the public to purchase common shares under the Israeli Securities Law, 5728 – 1968, which requires a prospectus to be published and authorized by the Israel Securities Authority, if it complies with certain provisions of Section 15 of the Israeli Securities Law, 5728–1968, including, inter alia, if: (i) the offer is made, distributed or directed to not more than 35 investors, subject to certain conditions (the “Addressed Investors”); or (ii) the offer is made, distributed or directed to certain qualified investors defined in the First Addendum of the Israeli Securities Law, 5728 – 1968, subject to certain conditions (the “Qualified Investors”). The Qualified Investors shall not be taken into account in the count of the Addressed Investors and may be offered to purchase securities in addition to the 35 Addressed Investors. The company has not and will not take any action that would require it to publish a prospectus in accordance with and subject to the Israeli Securities Law, 5728 – 1968. We have not and will not distribute this prospectus supplement or make, distribute or direct an offer to subscribe for our common shares to any person within the State of Israel, other than to Qualified Investors and up to 35 Addressed Investors.

Qualified Investors may have to submit written evidence that they meet the definitions set out in of the First Addendum to the Israeli Securities Law, 5728 – 1968. In particular, we may request, as a condition to be offered common shares, that Qualified Investors will each represent, warrant and certify to us and/or to anyone acting on our behalf: (i) that it is an investor falling within one of the categories listed in the First Addendum to the Israeli Securities Law, 5728 – 1968; (ii) which of the categories listed in the First Addendum to the Israeli Securities Law, 5728 – 1968 regarding Qualified Investors is applicable to it; (iii) that it will abide by all provisions set forth in the Israeli Securities Law, 5728 – 1968 and the regulations promulgated thereunder in connection with the offer to be issued common shares; (iv) that the common shares that will be issued are, subject to exemptions available under the Israeli Securities Law, 5728 – 1968: (a) for its own account; (b) for investment purposes only; and (c) not issued with a view to resale within the State of Israel, other than in accordance with the provisions of the Israeli Securities Law, 5728 – 1968; and (v) that it is willing to provide further evidence of its Qualified Investor status. Addressed Investors may have to submit written evidence in respect of their identity and may have to sign and submit a declaration containing, inter alia, the Addressed Investor’s name, address and passport number or Israeli identification number.

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CERTAIN US FEDERAL INCOME TAX CONSIDERATIONS

The following is a general summary of certain material US federal income tax considerations applicable to a US Holder, as defined below, arising from and relating to the acquisition, ownership, and disposition of our common shares or Series II First Preferred Shares acquired in the offering.

This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential US federal income tax considerations that may apply to a US Holder arising from and relating to the acquisition, ownership, and disposition of our common shares or Series II First Preferred Shares. In addition, this summary does not take into account the individual facts and circumstances of any particular US Holder that may affect the US federal income tax consequences to such US Holder, including, without limitation, specific tax consequences to a US Holder under an applicable income tax treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or US federal income tax advice with respect to any US Holder. This summary does not address the US federal alternative minimum, US federal estate and gift, US state and local, and non-US tax consequences to US Holders of the acquisition, ownership, and disposition of our common shares or Series II First Preferred Shares. In addition, except as specifically set forth below, this summary does not discuss applicable tax reporting requirements. Each prospective US Holder should consult its own tax advisors regarding the US federal, US federal alternative minimum, US federal estate and gift, US state and local, and non-US tax consequences relating to the acquisition, ownership and disposition of our common shares or Series II First Preferred Shares.

No ruling from the Internal Revenue Service, or IRS, has been requested, or will be obtained, regarding the US federal income tax consequences of the acquisition, ownership, and disposition of our common shares or Series II First Preferred Shares. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this summary. In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and the US courts could disagree with one or more of the conclusions described in this summary.

Scope of this Summary

Authorities

This summary is based on the Internal Revenue Code of 1986, as amended, or the Code, Treasury Regulations (whether final, temporary, or proposed), published rulings of the IRS, published administrative positions of the IRS, the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended, or the Treaty, and US court decisions that are applicable, and, in each case, as in effect and available, as of the date hereof. Any of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change could be applied retroactively. This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation.

US Holders

For purposes of this summary, the term “US Holder” means a beneficial owner of our common shares or Series II First Preferred Shares acquired in the offering that is for US federal income tax purposes:

  • an individual who is a citizen or resident of the United States;

  • a corporation (or other entity classified as a corporation for US federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia;

  • an estate whose income is subject to US federal income taxation regardless of its source; or

  • a trust that (a) is subject to the primary supervision of a court within the United States and the control of one or more US persons for all substantial decisions or (b) has a valid election in effect under applicable Treasury Regulations to be treated as a US person.

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US Holders Subject to Special US Federal Income Tax Rules Not Addressed

This summary does not address the US federal income tax considerations applicable to US Holders that are subject to special provisions under the Code, including, but not limited to, US Holders that: (a) are tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; (b) are financial institutions, underwriters, insurance companies, real estate investment trusts, or regulated investment companies; (c) are broker-dealers, dealers, or traders in securities or currencies that elect to apply a mark-to-market accounting method; (d) have a “functional currency” other than the US dollar; (e) own our common shares or Series II First Preferred Shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving more than one position; (f) acquire our common shares or Series II First Preferred Shares in connection with the exercise of employee stock options or otherwise as compensation for services; (g) hold our common shares or Series II First Preferred Shares other than as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment purposes); or (h) own, have owned or will own (directly, indirectly, or by attribution) 10% or more of the total combined voting power of our outstanding shares. This summary also does not address the US federal income tax considerations applicable to US Holders who are: (a) US expatriates or former long-term residents of the United States; (b) persons that have been, are, or will be a resident or deemed to be a resident in Canada for purposes of the Income Tax Act (Canada), or the ITA; (c) persons that use or hold, will use or hold, or that are or will be deemed to use or hold our common shares or Series II First Preferred Shares in connection with carrying on a business in Canada; (d) persons whose common shares or Series II First Preferred Shares constitute “taxable Canadian property” under the ITA; or (e) persons that have a permanent establishment in Canada for the purposes of the Treaty. US Holders that are subject to special provisions under the Code, including, but not limited to, US Holders described immediately above, should consult their own tax advisors regarding the US federal, US federal alternative minimum, US federal estate and gift, US state and local, and non-US tax consequences relating to the acquisition, ownership and disposition of our common shares or Series II First Preferred Shares.

If an entity or arrangement that is classified as a partnership (or other “pass-through” entity) for US federal income tax purposes holds our common shares or Series II First Preferred Shares, the US federal income tax consequences to such entity or arrangement and the partners (or other owners or participants) of such entity or arrangement generally will depend on the activities of the entity or arrangement and the status of such partners (or owners or participants). This summary does not address the tax consequences to any such partner (or owner or participants). Partners (or other owners or participants) of entities or arrangements that are classified as partnerships or as “pass-through” entities for US federal income tax purposes should consult their own tax advisors regarding the US federal income tax consequences arising from and relating to the acquisition, ownership, and disposition of our common shares or Series II First Preferred Shares.

Passive Foreign Investment Company Rules

PFIC Status

We believe we were classified as a passive foreign investment company, or PFIC, during the tax year ended December 31, 2016, and based on current business plans and financial expectations, we expect that we will be a PFIC for the current tax year and may be a PFIC in future tax years. If we are a PFIC for any year during a US Holder’s holding period, then certain potentially adverse rules may affect the US federal income tax consequences to a US Holder as a result of the acquisition, ownership and disposition of our common shares or Series II First Preferred Shares. The determination of whether any corporation is, was, or will be, a PFIC for a tax year depends, in part, on the application of complex US federal income tax rules, which are subject to differing interpretations. In addition, whether any corporation will be a PFIC for any tax year depends on the assets and income of such corporation over the course of each such tax year and, as a result, cannot be predicted with certainty as of the date hereof. Accordingly, there can be no assurance that the IRS will not challenge any determination made by us (or any subsidiary) concerning its PFIC status. Each US Holder should consult its own tax advisors regarding our PFIC status and the PFIC status of our subsidiaries.

In any year in which we are classified as a PFIC, a US Holder will be required to file an annual report with the IRS containing such information as Treasury Regulations and/or other IRS guidance may require. In addition to penalties, a failure to satisfy such reporting requirements may result in an extension of the time period during which the IRS can assess a tax. US Holders should consult their own tax advisors regarding the requirements of filing such information returns under these rules, including the requirement to file an IRS Form 8621 annually.

We generally will be a PFIC if, for a tax year, (a) 75% or more of our gross income is passive income, or the “income test”, or (b) 50% or more of the value of our assets either produce passive income or are held for the production of passive income, based on the quarterly average of the fair market value of such assets, or the “asset test”. For purposes of the PFIC income test and asset test described above, if we own, directly or indirectly, 25% or more of the total value of the outstanding shares of another corporation, we will be treated as if we (a) held a proportionate share of the assets of such other corporation and (b) received directly a proportionate share of the income of such other corporation.

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Under certain attribution rules, if we are a PFIC, US Holders will generally be deemed to own their proportionate share of our direct or indirect equity interest in any company that is also a PFIC, or a Subsidiary PFIC, and will generally be subject to US federal income tax on their proportionate share of (a) any “excess distributions,” as described below, on the stock of a Subsidiary PFIC and (b) a disposition or deemed disposition of the stock of a Subsidiary PFIC by us or another Subsidiary PFIC, both as if such US Holders directly held the shares of such Subsidiary PFIC. In addition, US Holders may be subject to US federal income tax on any indirect gain realized on the stock of a Subsidiary PFIC on the sale or disposition of our common shares or Series II First Preferred Shares. Accordingly, US Holders should be aware that they could be subject to tax under the PFIC rules even if no distributions are received and no redemptions or other dispositions of our common shares or Series II First Preferred Shares are made.

Default PFIC Rules Under Section 1291 of the Code

If we are a PFIC for any tax year during which a US Holder owns our common shares or Series II First Preferred Shares, the US federal income tax consequences to such US Holder of the acquisition, ownership, and disposition of such shares will depend on whether and when such US Holder makes an election to treat us and each Subsidiary PFIC, if any, as a “qualified electing fund” or “QEF” under Section 1295 of the Code, or QEF Election, or makes a mark-to-market election under Section 1296 of the Code, or Mark-to-Market Election. A US Holder that does not make either a QEF Election or a Mark-to-Market Election will be referred to in this summary as a “Non-Electing US Holder.”

A Non-Electing US Holder will be subject to the rules of Section 1291 of the Code (described below) with respect to (a) any gain recognized on the sale or other taxable disposition of our common shares or Series II First Preferred Shares and (b) any “excess distribution” received on our common shares or Series II First Preferred Shares. A distribution generally will be an “excess distribution” to the extent that such distribution (together with all other distributions received in the current tax year) exceeds 125% of the average distributions received during the three preceding tax years (or during a US Holder’s holding period for our common shares, if shorter).

Under Section 1291 of the Code, any gain recognized on the sale or other taxable disposition of our common shares or Series II First Preferred Shares (including an indirect disposition of the stock of any Subsidiary PFIC), and any “excess distribution” received on our common shares or Series II First Preferred Shares or with respect to the stock of a Subsidiary PFIC, must be ratably allocated to each day in a Non-Electing US Holder’s holding period for the respective common shares or Series II First Preferred Shares. The amount of any such gain or excess distribution allocated to the tax year of disposition or distribution of the excess distribution and to years before the entity became a PFIC, if any, would be taxed as ordinary income (and not eligible for certain preferred rates). The amounts allocated to any other tax year would be subject to US federal income tax at the highest tax rate applicable to ordinary income in each such year, and an interest charge would be imposed on the tax liability for each such year, calculated as if such tax liability had been due in each such year. A Non-Electing US Holder that is not a corporation must generally treat any such interest paid as “personal interest,” which is generally not deductible.

If we are a PFIC for any tax year during which a Non-Electing US Holder holds our common shares or Series II First Preferred Shares, we will continue to be treated as a PFIC with respect to such Non-Electing US Holder, regardless of whether we cease to be a PFIC in one or more subsequent tax years. A Non-Electing US Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above), but not loss, as if such common shares or Series II First Preferred Shares were sold on the last day of the last tax year for which we were a PFIC.

QEF Election

A US Holder that makes a timely and effective QEF Election for the first tax year in which the holding period of its common shares or Series II First Preferred Shares begins generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to its common shares or Series II First Preferred Shares. A US Holder that makes a timely and effective QEF Election will be subject to US federal income tax on such US Holder’s pro rata share of (a) our net capital gain, which will be taxed as long-term capital gain to such US Holder, and (b) our ordinary earnings, which will be taxed as ordinary income to such US Holder. Generally, “net capital gain” is the excess of (a) net long-term capital gain over (b) net short-term capital loss, and “ordinary earnings” are the excess of (a) “earnings and profits” over (b) net capital gain. The IRS has not issued rules regarding the allocation of net capital gain and ordinary earnings amounts to multiple classes of stock. Accordingly, the proper manner for allocating such items between our common shares and preferred shares is not certain. A US Holder that makes a QEF Election will be subject to US federal income tax on such amounts for each tax year in which we are a PFIC, regardless of whether such amounts are actually distributed to such US Holder by us. However, for any tax year in which we are a PFIC and have no net income or gain, US Holders that have made a QEF Election would not have any income inclusions as a result of the QEF Election. If a US Holder that made a QEF Election has an income inclusion, such a US Holder may, subject to certain limitations, elect to defer payment of current US federal income tax on such amounts, subject to an interest charge. If such US Holder is not a corporation, any such interest paid will generally be treated as “personal interest,” which is generally not deductible.

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A US Holder that makes a timely and effective QEF Election with respect to us generally (a) would receive any distributions from us tax free to the extent that such distribution represents our “earnings and profits” that were previously included in income by the US Holder because of such QEF Election and (b) would adjust its tax basis in our common shares or Series II First Preferred Shares to reflect the amount included in income and/or received as a tax-free distribution because of such QEF Election. In addition, a US Holder that makes a QEF Election generally will recognize capital gain or loss on the sale or other taxable disposition of our common shares or Series II First Preferred Shares.

The procedure for making a QEF Election, and the US federal income tax consequences of making a QEF Election, will depend on whether such QEF Election is “timely”. A QEF Election will be treated as timely if such QEF Election is made for the first year in the US Holder’s holding period for our common shares in which we were a PFIC. A US Holder may make a timely QEF Election by filing the appropriate QEF Election documents at the time such US Holder files a US federal income tax return for such year. If a US Holder does not make a timely and effective QEF Election for the first year in the US Holder’s holding period for our common shares or Series II First Preferred Shares, the US Holder may still be able to make a timely and effective QEF Election in a subsequent year if such US Holder meets certain requirements and makes a “purging” election to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above) as if such common shares or Series II First Preferred Shares were sold for their fair market value on the day the QEF Election is effective. If a US Holder makes a QEF Election but does not make a “purging” election to recognize gain, as discussed in the preceding sentence, then such US Holder shall continue to be subject to tax under the rules of Section 1291 discussed above. If a US Holder owns PFIC stock indirectly through another PFIC, separate QEF Elections must be made for the PFIC in which the US Holder is a direct shareholder and the Subsidiary PFIC for the QEF rules to apply to both PFICs.

A QEF Election will apply to the tax year for which such QEF Election is timely made and to all subsequent tax years, unless such QEF Election is invalidated or terminated or the IRS consents to revocation of such QEF Election. If a US Holder makes a QEF Election and, in a subsequent tax year, we cease to be a PFIC, the QEF Election will remain in effect (although it will not be applicable) during those tax years in which we are not a PFIC. Accordingly, if we become a PFIC in another subsequent tax year, the QEF Election will be effective and the US Holder will be subject to the QEF rules described above during any subsequent tax year in which we qualify as a PFIC.

We: (a) will use commercially reasonable efforts to make available to US Holders, upon their written request after the end of a tax year, information as to our status as a PFIC, and (b) for each year in which we are a PFIC, provide to a US Holder, upon written request, all information and documentation that a US Holder making a QEF Election with respect to us is required to obtain for US federal income tax purposes. We may elect to provide such information on our website. However, US Holders should be aware that we can provide no assurances that we will provide any such information relating to a Subsidiary PFIC. Because we may own shares in one or more Subsidiary PFICs at any time, US Holders will continue to be subject to the rules discussed above with respect to the taxation of gains and excess distributions with respect to any Subsidiary PFIC for which the US Holders do not obtain the required information. Each US Holder should consult its own tax advisors regarding the availability of, and procedure for making, a QEF Election with respect to us and any Subsidiary PFIC.

A US Holder makes a QEF Election by attaching a completed IRS Form 8621, including a PFIC Annual Information Statement, to a timely filed US federal income tax return. However, if we do not provide the required information with regard to us or any of our Subsidiary PFICs, US Holders will not be able to make a QEF Election for such entity and will continue to be subject to the rules of Section 1291 of the Code, discussed above, that apply to Non-Electing US Holders with respect to the taxation of gains and excess distributions.

Mark-to-Market Election

A US Holder may make a Mark-to-Market Election only if our common shares are marketable stock. Our common shares generally will be “marketable stock” if our common shares are regularly traded on (a) a national securities exchange that is registered with the Securities and Exchange Commission, (b) the national market system established pursuant to section 11A of the Securities and Exchange Act of 1934, or (c) a foreign securities exchange that is regulated or supervised by a governmental authority of the country in which the market is located, provided that (i) such foreign exchange has trading volume, listing, financial disclosure, and surveillance requirements, and meets other requirements and the laws of the country in which such foreign exchange is located, together with the rules of such foreign exchange, ensure that such requirements are actually enforced and (ii) the rules of such foreign exchange effectively promote active trading of listed stocks. If such stock is traded on such a qualified exchange or other market, such stock generally will be “regularly traded” for any calendar year during which such stock is traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. Our common shares are currently traded on Nasdaq, a national securities exchange in the United States which is registered with the Securities and Exchange Commission. We believe that our common shares were “regularly traded” in the first calendar quarter of 2017 and we expect that our common shares will be “regularly traded” in the second calendar quarter of 2017. However, there can be no assurance that our common shares will be “regularly traded” in subsequent calendar quarters. US Holders should consult their own tax advisors regarding the marketable stock rules.

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A US Holder that makes a Mark-to-Market Election with respect to its common shares generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to such common shares. However, if a US Holder does not make a Mark-to-Market Election beginning in the first tax year of such US Holder’s holding period for our common shares for which we are a PFIC or such US Holder has not made a timely QEF Election, the rules of Section 1291 of the Code discussed above will apply to certain dispositions of, and distributions on, our common shares.

A US Holder that makes a Mark-to-Market Election will include in ordinary income, for each tax year in which we are a PFIC, an amount equal to the excess, if any, of (a) the fair market value of our common shares, as of the close of such tax year over (b) such US Holder’s adjusted tax basis in such common shares. A US Holder that makes a Mark-to-Market Election will be allowed a deduction in an amount equal to the excess, if any, of (a) such US Holder’s adjusted tax basis in our common shares, over (b) the fair market value of such common shares (but only to the extent of the net amount of previously included income as a result of the Mark-to-Market Election for prior tax years).

A US Holder that makes a Mark-to-Market Election generally also will adjust such US Holder’s tax basis in our common shares to reflect the amount included in gross income or allowed as a deduction because of such Mark-to-Market Election. In addition, upon a sale or other taxable disposition of our common shares, a US Holder that makes a Mark-to-Market Election will recognize ordinary income or ordinary loss (not to exceed the excess, if any, of (a) the amount included in ordinary income because of such Mark-to-Market Election for prior tax years over (b) the amount allowed as a deduction because of such Mark-to-Market Election for prior tax years). Losses that exceed this limitation are subject to the rules generally applicable to losses provided in the Code and Treasury Regulations.

A US Holder makes a Mark-to-Market Election by attaching a completed IRS Form 8621 to a timely filed United States federal income tax return. A Mark-to-Market Election applies to the tax year in which such Mark-to-Market Election is made and to each subsequent tax year, unless our common shares cease to be “marketable stock” or the IRS consents to revocation of such election. Each US Holder should consult its own tax advisors regarding the availability of, and procedure for making, a Mark-to-Market Election.

Our Series II First Preferred Shares will not be marketable stock and the Mark-to-Market Election is not expected to be available with respect to our Series II First Preferred Shares. In addition, although a US Holder may be eligible to make a Mark-to-Market Election with respect to our common shares, no such election may be made with respect to the stock of any Subsidiary PFIC that a US Holder is treated as owning, because such stock is not marketable. Hence, the Mark-to-Market Election will not be effective to avoid the application of the default rules of Section 1291 of the Code described above with respect to deemed dispositions of Subsidiary PFIC stock or excess distributions from a Subsidiary PFIC.

Other PFIC Rules

Under Section 1291(f) of the Code, the IRS has issued proposed Treasury Regulations that, subject to certain exceptions, would cause a US Holder that had not made a timely QEF Election to recognize gain (but not loss) upon certain transfers of our common shares or Series II First Preferred Shares that would otherwise be tax-deferred (e.g., gifts and exchanges pursuant to corporate reorganizations). However, the specific US federal income tax consequences to a US Holder may vary based on the manner in which common shares are transferred.

Certain additional adverse rules may apply with respect to a US Holder if we are a PFIC, regardless of whether such US Holder makes a QEF Election. For example, under Section 1298(b)(6) of the Code, a US Holder that uses our common shares or Series II First Preferred Shares as security for a loan will, except as may be provided in Treasury Regulations, be treated as having made a taxable disposition of such shares.

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Special rules also apply to the amount of foreign tax credit that a US Holder may claim on a distribution from a PFIC. Subject to such special rules, foreign taxes paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit. The rules relating to distributions by a PFIC and their eligibility for the foreign tax credit are complicated, and a US Holder should consult with its own tax advisors regarding the availability of the foreign tax credit with respect to distributions by a PFIC.

The PFIC rules are complex, and each US Holder should consult its own tax advisors regarding the PFIC rules and how the PFIC rules may affect the US federal income tax consequences of the acquisition, ownership, and disposition of our common shares or Series II First Preferred Shares.

General Rules Applicable to the Ownership and Disposition of Common Shares and Series II First Preferred Shares

The following discussion describes the general rules applicable to the ownership and disposition of our common shares and Series II First Preferred Shares but is subject in its entirety to the special rules described above under the heading “Passive Foreign Investment Company Rules.”

Distributions on Common Shares or Series II First Preferred Shares

A US Holder that receives a distribution, including a constructive distribution, with respect to a common share or Series II First Preferred Shares will be required to include the amount of such distribution in gross income as a dividend (without reduction for any Canadian income tax withheld from such distribution) to the extent of our current and accumulated “earnings and profits,” as computed for US federal income tax purposes. To the extent that a distribution exceeds our current and accumulated “earnings and profits,” such distribution will be treated first as a tax-free return of capital to the extent of a US Holder’s tax basis in our common shares or Series II First Preferred Shares and thereafter as gain from the sale or exchange of such common shares or Series II First Preferred Shares. (See “Sale or Other Taxable Disposition of Common Shares and Series II First Preferred Shares,” below.) However, we may not maintain the calculations of its earnings and profits in accordance with US federal income tax principles, and each US Holder should assume that any distribution by us with respect to our common shares will constitute dividend income. Dividends received on our common shares or Series II First Preferred Shares by corporate US Holders generally will not be eligible for the “dividends received deduction.” Subject to applicable limitations and provided we are eligible for the benefits of the Treaty, dividends paid by us to non-corporate US Holders, including individuals, generally will be eligible for the preferential tax rates applicable to dividends, provided certain holding period and other conditions are satisfied, including that we not be classified as a PFIC in the tax year of distribution or in the preceding tax year. A dividend generally will be taxed to a US Holder at ordinary income tax rates if we are a PFIC for the tax year of such distribution or the preceding tax year. The dividend rules are complex, and each US Holder should consult its own tax advisors regarding the application of such rules.

Sale or Other Taxable Disposition of Common Shares or Series II First Preferred Shares

Subject to the discussion under “Passive Foreign Investment Company Rules,” upon the sale or other taxable disposition of our common shares or Series II First Preferred Shares, a US Holder generally will recognize capital gain or loss in an amount equal to the difference between the US dollar value of cash received plus the fair market value of any property received and such US Holder’s tax basis in such common shares or Series II First Preferred Shares sold or otherwise disposed of. A US Holder’s tax basis in our common shares or Series II First Preferred Shares generally will be such holder’s US dollar cost for such common shares or Series II First Preferred Shares. Gain or loss recognized on such sale or other disposition generally will be long-term capital gain or loss if, at the time of the sale or other disposition, our common shares or Series II First Preferred Shares have been held for more than one year.

Preferential tax rates currently apply to long-term capital gain of a US Holder that is an individual, estate, or trust. There are currently no preferential tax rates for long-term capital gain of a US Holder that is a corporation. Deductions for capital losses are subject to significant limitations under the Code.

Certain Adjustments to the Series II First Preferred Shares

Under Section 305 of the Code, an adjustment to the number of common shares that will be issued on the conversion of Series II First Preferred Shares, or an adjustment to the conversion ratio of the Series II First Preferred Shares, may be treated as a constructive distribution to a U.S. Holder of Series II First Preferred Shares if, and to the extent that, such adjustment has the effect of increasing such U.S. Holder’s proportionate interest in our “earnings and profits” or our assets, depending on the circumstances of such adjustment (for example, if such adjustment is associated with a distribution of cash or other property to other shareholders). Adjustments to the conversion ratio of the Series II First Preferred Shares made pursuant to a bona fide reasonable adjustment formula that has the effect of preventing dilution of the interest of the holders of Series II First Preferred Shares should generally not be considered to result in a constructive distribution. Any such constructive distribution would be taxable whether or not there is an actual distribution of cash or other property.

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Conversion of the Series II First Preferred Shares into Common Shares

Subject to the PFIC rules and Section 305 rules discussed above, a holder of Series II First Preferred Shares generally should not recognize gain or loss upon the conversion of Series II Preferred Stock into our common shares pursuant to the right of conversion. However, if there are dividend arrearages (i.e., accumulated, undeclared and unpaid dividends) on the Series II First Preferred Shares, then the common shares received as consideration for such dividend arrearages will be treated as a distribution on the Series II First Preferred Shares (see “Distributions on Common Shares or Series II First Preferred Shares” above). The aggregate tax basis of our common shares received in the conversion will equal the aggregate tax basis in the Series II First Preferred Shares surrendered in the conversion and the holding period in our common shares received in the conversion will include the holding period of the Series II First Preferred Shares surrendered in the conversion. The adjusted tax basis of any common stock treated as a constructive dividend will be equal to its fair market value on the date of the exchange, and the holding period of such stock will commence on the day after such exchange.

Section 1291(f) of the Code provides that, to the extent provided in Treasury Regulations, any normally available non-recognition provision will not apply to a U.S. Holder’s disposition of shares of a non-US corporation if the corporation was a PFIC for any taxable year that is included in whole or in part during the U.S. Holder’s holding period. The U.S. Treasury Department has issued proposed Treasury Regulations (which are not yet effective), but no final or temporary Treasury Regulations, under Section 1291(f). It is impossible to predict at this time whether, in what form, and with what effective date, final Treasury Regulations will be adopted and the IRS may view Section 1291(f) of the Code as self-executing notwithstanding the absence of final or temporary Treasury Regulations. U.S. Holders of Series II First Preferred Shares should consult its own tax advisors regarding Section 1291(f) of the Code and the proposed Treasury Regulations issued thereunder.

Each U.S. Holder should consult its own tax advisors regarding the tax consequences of the conversion of the Series II First Preferred Shares into our common shares pursuant to the right of conversion.

Additional Considerations

Additional Tax on Passive Income

Certain US Holders that are individuals, estates or trusts (other than trusts that are exempt from tax) will be subject to a 3.8% tax on all or a portion of their “net investment income,” which includes dividends on our common shares or Series II First Preferred Shares, and net gains from the disposition of our common shares or Series II First Preferred Shares. Further, excess distributions treated as dividends, gains treated as excess distributions, and Mark-to-Market inclusions and deductions are all included in the calculation of net investment income.

Treasury Regulations provide, subject to the election described in the following paragraph, that solely for purposes of this additional tax, distributions of previously taxed income will be treated as dividends and included in net investment income subject to the additional 3.8% tax. Additionally, to determine the amount of any capital gain from the sale or other taxable disposition of our common shares or Series II First Preferred Shares that will be subject to the additional tax on net investment income, a US Holder who has made a QEF Election will be required to recalculate its basis in our common shares or Series II First Preferred Shares excluding QEF basis adjustments.

Alternatively, a US Holder may make an election that will be effective with respect to all interests in a PFIC for which a QEF Election has been made and which is held in that year or acquired in future years. Under this election, a US Holder pays the additional 3.8% tax on QEF income inclusions and on gains calculated after giving effect to related tax basis adjustments. US Holders that are individuals, estates or trusts should consult their own tax advisors regarding the applicability of this tax to any of their income or gains in respect of our common shares or Series II First Preferred Shares.

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Receipt of Foreign Currency

The amount of any distribution paid to a US Holder in foreign currency, or on the sale, exchange or other taxable disposition of our common shares or Series II First Preferred Shares, generally will be equal to the US dollar value of such foreign currency based on the exchange rate applicable on the date of receipt (regardless of whether such foreign currency is converted into US dollars at that time). A US Holder will have a basis in the foreign currency equal to its US dollar value on the date of receipt. Any US Holder who converts or otherwise disposes of the foreign currency after the date of receipt may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss, and generally will be US source income or loss for foreign tax credit purposes. Different rules apply to US Holders who use the accrual method. Each US Holder should consult its own US tax advisors regarding the US federal income tax consequences of receiving, owning, and disposing of foreign currency.

Foreign Tax Credit

Subject to the PFIC rules discussed above, a US Holder that pays (whether directly or through withholding) Canadian income tax with respect to dividends paid on our common shares or Series II First Preferred Shares generally will be entitled, at the election of such US Holder, to receive either a deduction or a credit for such Canadian income tax. Generally, a credit will reduce a US Holder’s US federal income tax liability on a dollar-for-dollar basis, whereas a deduction will reduce a US Holder’s income that is subject to US federal income tax. This election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a US Holder during a year.

Complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of a US Holder’s US federal income tax liability that such US Holder’s “foreign source” taxable income bears to such US Holder’s worldwide taxable income. In applying this limitation, a US Holder’s various items of income and deduction must be classified, under complex rules, as either “foreign source” or “US source.” Generally, dividends paid by a foreign corporation should be treated as foreign source for this purpose, and gains recognized on the sale of stock of a foreign corporation by a US Holder should be treated as US source for this purpose, except as otherwise provided in an applicable income tax treaty, and if an election is properly made under the Code. However, the amount of a distribution with respect to our common shares or Series II First Preferred Shares that is treated as a “dividend” may be lower for US federal income tax purposes than it is for Canadian federal income tax purposes, resulting in a reduced foreign tax credit allowance to a US Holder. In addition, this limitation is calculated separately with respect to specific categories of income. The foreign tax credit rules are complex, and each US Holder should consult its own US tax advisors regarding the foreign tax credit rules.

Backup Withholding and Information Reporting

Under US federal income tax law, certain categories of US Holders must file information returns with respect to their investment in, or involvement in, a foreign corporation. For example, US return disclosure obligations (and related penalties) are imposed on individuals who are US Holders that hold certain specified foreign financial assets in excess of certain thresholds. The definition of specified foreign financial assets includes not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts maintained by a financial institution, any stock or security issued by a non-US person, any financial instrument or contract held for investment that has an issuer or counterparty other than a US person and any interest in a foreign entity. US Holders may be subject to these reporting requirements unless their common shares or Series II First Preferred Shares are held in an account at certain financial institutions. Penalties for failure to file certain of these information returns are substantial. US Holders should consult with their own tax advisors regarding the requirements of filing information returns, including the requirement to file an IRS Form 8938.

Payments made within the US, or by a US payor or US middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of, our common shares or Series II First Preferred Shares will generally be subject to information reporting and backup withholding tax, at the rate of 28%, if a US Holder (a) fails to furnish such US Holder’s correct US taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect US taxpayer identification number, (c) is notified by the IRS that such US Holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such US Holder has furnished its correct US taxpayer identification number and that the IRS has not notified such US Holder that it is subject to backup withholding tax. However, certain exempt persons generally are excluded from these information reporting and backup withholding rules. Backup withholding is not an additional tax. Any amounts withheld under the US backup withholding tax rules will be allowed as a credit against a US Holder’s US federal income tax liability, if any, or will be refunded, if such US Holder furnishes required information to the IRS in a timely manner.

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The discussion of reporting requirements set forth above is not intended to constitute a complete description of all reporting requirements that may apply to a US Holder. A failure to satisfy certain reporting requirements may result in an extension of the time period during which the IRS can assess a tax, and, under certain circumstances, such an extension may apply to assessments of amounts unrelated to any unsatisfied reporting requirement. Each US Holder should consult its own tax advisors regarding the information reporting and backup withholding rules.

US Holders should consult and rely on their own tax advisors with respect to the application of these additional taxes based on their own particular circumstances.

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AUDITORS

Our auditors are Ernst & Young LLP, Chartered Professional Accountants, Licensed Public Accountants, Toronto, Ontario, Canada. Our audited consolidated financial statements as at December 31, 2016 and 2015 and for the years then ended incorporated by reference into this prospectus supplement have been audited by Ernst & Young LLP, Independent Registered Public Accounting Firm, as indicated in their report dated March 9, 2017 as set forth in their report thereon incorporated herein. Ernst & Young LLP has been our auditors since inception on March 31, 2004.

LEGAL MATTERS

Certain legal matters relating to the issue and sale in Canada of common shares and Series II First Preferred Shares offered hereby will be passed upon by Baker & McKenzie LLP on behalf of us and by Blake, Cassels & Graydon LLP on behalf of the underwriters. Goodwin Procter LLP is acting as US counsel to us and Morgan, Lewis & Bockius LLP is acting as US counsel for the underwriters in the offering. As of the date hereof, the “designated professionals” (as such term is defined in Form 51-102F2 — Annual Information Form) of each of Baker & McKenzie LLP and Blake, Cassels & Graydon LLP, respectively, beneficially own, directly or indirectly, less than 1% of the common shares or the securities of any associate or affiliate of the Corporation.

DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT

In addition to the documents specified in this prospectus supplement and in the accompanying prospectus under “Documents Incorporated by Reference”, the following documents have been or will be (through post-effective amendment or incorporation by reference) filed with the SEC as part of the registration statement on Form F-10 (File No. 333-204551), of which this prospectus supplement forms a part: (i) the form of underwriting agreement described in this prospectus supplement; (ii) powers of attorney from our directors and officers; and (iii) the consents of auditors and legal counsel.

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This short form prospectus is a base shelf prospectus that has been filed under legislation in each of the provinces of British Columbia, Alberta, Manitoba, Ontario and Nova Scotia that permits certain information about these securities to be determined after this short form prospectus has become final and that permits the omission from this short form prospectus of that information. The legislation requires the delivery to purchasers of a prospectus supplement containing the omitted information within a specified period of time after agreeing to purchase any of these securities. A registration statement relating to these securities has been filed with the Securities and Exchange Commission.

No securities regulatory authority has expressed an opinion about the securities and it is an offence to claim otherwise. This short form prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities.

Information has been incorporated by reference in this short form prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from the Corporate Secretary of Trillium Therapeutics Inc. at 96 Skyway Avenue, Toronto, Ontario, M9W 4Y9 telephone (416) 595-0627, and are also available electronically at www.sedar.com. See “Documents Incorporated by Reference”.

Short Form Base Shelf Prospectus

New Issue Dated June 4, 2015

US$100,000,000

Common Shares
First Preferred Shares
Warrants
Units

Trillium Therapeutics Inc., or “we”, “our”, “Trillium” or “the Corporation”, may from time to time during the 25-month period that this prospectus, or Prospectus, including any amendments, remains valid, offer and sell under this Prospectus in one or more offerings, for an aggregate offering price of up to US$100,000,000 (or the equivalent in other currencies or currency units) common shares in the capital of the Corporation, or “Common Shares”, First Preferred shares in the capital of the Corporation, or “First Preferred Shares”, warrants to purchase Common Shares, or “Warrants” and units, or “Units”, comprised of one or more of the other securities described in this Prospectus in any combination (the Units, together with the Common Shares, First Preferred Shares and Warrants, are referred to as the “Securities”). We may offer Securities in such amounts and at such prices and, in the case of the Warrants and Units, with such terms, as we may determine in light of market conditions. We may sell the Warrants in one or more series and the First Preferred Shares, in one or more series.


We are permitted, under a multijurisdictional disclosure system adopted by the United States and Canada, to prepare this Prospectus in accordance with Canadian disclosure requirements, which are different from those of the United States. We prepare our financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, or “IFRS”, and they are subject to Canadian auditing and independence standards. Thus, they may not be comparable to financial statements of United States companies.

Owning the Securities may subject you to tax consequences both in the United States and Canada. This Prospectus or any applicable supplement to this Prospectus, or “Prospectus Supplement”, may not describe these tax consequences fully. You should read the tax discussion in any applicable Prospectus Supplement.

Your ability to enforce civil liabilities under the United States federal securities laws may be affected adversely because we are incorporated in Ontario, Canada, some or all of our officers and directors and some or all of the experts named in this Prospectus are residents of countries other than the United States, and most or all of our assets are located in Canada.

Neither the United States Securities and Exchange Commission, or “SEC”, nor any state securities regulator has approved or disapproved these Securities, or determined if this Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

There are certain risk factors that should be carefully reviewed by prospective purchasers. See “Risk Factors”.

The specific terms of the Securities with respect to a particular offering will be set forth in a Prospectus Supplement, including where applicable: (i) in the case of the Common Shares, the number of Common Shares offered, the currency (which may be Canadian dollars or any other currency), the issue price and any other specific terms; (ii) in the case of the First Preferred Shares, the number and series of First Preferred Shares offered, the currency (which may be Canadian dollars or any other currency), the issue price and any other specific terms; (iii) in the case of Warrants, the designation, the number of Warrants offered, the currency (which may be Canadian dollars or any other currency), number of Common Shares that may be acquired upon exercise of the Warrants, the exercise price, dates and periods of exercise, adjustment procedures and any other specific terms; and (iv) in the case of Units, the designation, the number of Units offered, the offering price, the currency (which may be Canadian dollars or any other currency), terms of the Units and of the Securities comprising the Units and any other specific terms. We may also include in a Prospectus Supplement specific terms pertaining to the Securities which are not within the options and parameters set forth in this Prospectus.

All shelf information permitted under applicable laws to be omitted from this Prospectus will be contained in one or more Prospectus Supplements that will be delivered to purchasers together with this Prospectus. Each Prospectus Supplement will be incorporated by reference into this Prospectus for the purposes of securities legislation as of the date of the Prospectus Supplement and only for the purposes of the distribution of the Securities to which the Prospectus Supplement pertains. You should read this Prospectus and any applicable Prospectus Supplement before you invest in the Securities.

The outstanding Common Shares are listed for trading on the TSX, or “TSX”, under the trading symbol “TR” and on the NASDAQ Capital Market, or “NASDAQ”, under the trading symbol “TRIL”. Unless otherwise specified in any applicable Prospectus Supplement, the First Preferred shares, Warrants and Units will not be listed on any securities exchange. Unless specified in the applicable Prospectus Supplement, there is no market through which the First Preferred Shares, Warrants or Units may be sold and purchasers may not be able to resell the First Preferred Shares, Warrants or Units purchased under this Prospectus. This may affect the pricing of these securities in the secondary market, the transparency and availability of trading prices, the liquidity of the securities, and the extent of issuer regulation. See the “Risk Factors” section of the applicable Prospectus Supplement.


We may sell the Securities to or through underwriters, dealers, placement agents or other intermediaries or directly to purchasers or through agents. See “Plan of Distribution”. The Prospectus Supplement relating to a particular offering of Securities will identify each person who may be deemed to be an underwriter with respect to such offering and will set forth the terms of the offering of such Securities, including, as well as any fees or compensation payable to them in connection with the offering and sale of a particular issue of Securities, the public offering price or prices of the Securities and the proceeds to us from the sale of the Securities.

Subject to applicable securities legislation, in connection with any offering of Securities under this Prospectus, the underwriters, if any, may over-allot or effect transactions which stabilize or maintain the market price of the Securities offered at a level above that which might otherwise prevail in the open market. These transactions, if commenced, may be discontinued at any time. See “Plan of Distribution”.

You should rely only on the information contained in this Prospectus. We have not authorized anyone to provide you with information different from that contained in this Prospectus.

Our head office and registered office is located at 96 Skyway Avenue, Toronto, Ontario, Canada M9W 4Y9.


TABLE OF CONTENTS

Definitions and Other Matters 1
Currency and Exchange Rate Presentation 1
Enforcement of Civil Liabilities 1
Forward-Looking Statements 2
Documents Incorporated by Reference 4
Available Information 6
The Corporation 6
Risk Factors 6
Use of Proceeds 6
Capitalization 7
Prior Sales 7
Description of Common Shares 8
Description of First Preferred Shares 8
Description of Warrants 11
Description of Units 11
Market for Securities 12
Plan of Distribution 13
Income Tax Considerations 14
Documents Filed as Part of the Registration Statement 14
Experts 15
Registrar and Transfer Agent 15


DEFINITIONS AND OTHER MATTERS

In this Prospectus, unless otherwise indicated, references to “Trillium”, “the Corporation”, “we”, “our” or similar terms are, unless otherwise stated or the context requires otherwise, to Trillium Therapeutics Inc. and the subsidiaries through which it conducts business. Unless otherwise indicated, all financial information included and incorporated by reference in this Prospectus is determined using IFRS, which differs from United States generally accepted accounting principles.

You should rely only on the information contained or incorporated by reference in this Prospectus and any applicable Prospectus Supplement. We have not authorized anyone to provide readers with different information. We are not making an offer to sell or seeking an offer to buy the Securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this Prospectus and any applicable Prospectus Supplement is accurate as of any date other than the date on the front of such documents, regardless of the time of delivery of this Prospectus and any applicable Prospectus Supplement or of any sale of the Securities. Information contained on our website should not be deemed to be a part of this Prospectus or incorporated by reference into this Prospectus and should not be relied upon for the purpose of determining whether to invest in the Securities.

CURRENCY AND EXCHANGE RATE PRESENTATION

The financial statements incorporated by reference into this Prospectus are reported in Canadian dollars. All references to “dollars” or “$” in this Prospectus are to Canadian dollars and all references to “US$” are to United States dollars.

The following table sets forth, for each period indicated, the high, low and average exchange rates for Canadian dollars expressed in United States dollars, as provided by the Bank of Canada. The exchange rates set forth below demonstrate trends in exchange rates, but the actual exchange rates used throughout this Prospectus may vary. The average exchange rate is calculated by using the average of the closing prices on the last day of each month during the relevant period. On June 3, 2015, the noon exchange rate for one Canadian dollar expressed in United States dollars as reported by the Bank of Canada, was $1.00 = US$0.8041. The high and low exchange rates are intra-day values rather than noon or closing rates.

    Three months                    
$1 Canadian dollar equivalent in   ended     Year ended December 31,  
United States dollars   March 31, 2015     2014     2013     2012  
Average rate for period   US$ 0.7920     US$ 0.9021     0.9662 US$     1.0010  
High for period   0.8562     0.9444     1.0188     1.0371  
Low for period   0.7791     0.8568     0.9314     0.9576  

ENFORCEMENT OF CIVIL LIABILITIES

Trillium Therapeutics Inc. is an Ontario corporation and its principal place of business is in Canada. Some or all of the directors and officers of the Corporation are resident outside of the United States and most or all of its assets and the assets of such persons are located outside of the United States. Consequently, it may be difficult for United States investors to effect service of process within the United States on the Corporation or its directors or officers, or to realize in the United States on judgments of courts of the United States predicated on civil liabilities under the U.S. Securities Act of 1933, as amended, or the “U.S. Securities Act”. You should not assume that Canadian courts would enforce judgments of United States courts obtained in actions against the Corporation or such persons predicated on the civil liability provisions of the United States federal securities laws or the securities or “blue sky” laws of any state within the United States or would enforce, in original actions, liabilities against the Corporation or such persons predicated on the United States federal securities or any such state securities or “blue sky” laws. We believe that a judgment of a United States court predicated solely upon civil liability under United States federal securities laws would probably be enforceable in Canada if the United States court in which the judgment was obtained has a basis for jurisdiction in the matter that would be recognized by a Canadian court for the same purposes. We also believe, however, that there is substantial doubt whether an action could be brought in Canada in the first instance on the basis of liability predicated solely upon United States federal securities laws.

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We have filed with the SEC, concurrently with the registration statement on Form F-10 of which this Prospectus forms a part, an appointment of agent for service of process on Form F-X. Under the Form F-X, we appointed Puglisi & Associates as our agent for service of process in the United States in connection with any investigation or administrative proceeding conducted by the SEC, and any civil suit or action brought against or involving us in a United States court, arising out of or related to or concerning the offering of Securities under this Prospectus.

Luke Beshar, Robert Kirkman, Michael Moore and Thomas Reynolds are our directors who reside outside of Canada and they have appointed the Corporation at its business address as agent for service of process. Purchasers are advised that it may not be possible for investors to enforce judgments obtained in Canada against any person or company that is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada, even if the party has appointed an agent for service of process.

FORWARD-LOOKING STATEMENTS

This Prospectus contains forward-looking statements within the meaning of applicable securities laws. All statements contained herein that are not clearly historical in nature are forward-looking, and the words “anticipate”, “believe”, “expect”, “estimate”, “may”, “will”, “could”, “leading”, “intend”, “contemplate”, “shall” and similar expressions are generally intended to identify forward-looking statements. Forward-looking statements in this prospectus include, but are not limited to, statements with respect to:

our expected future loss and accumulated deficit levels;
   
our projected financial position and estimated cash burn rate;
   
our expectations about the timing of achieving milestones and the cost of our development programs;
   
our observations and expectations regarding the binding profile of SIRPαFc with red blood cells compared to anti-CD47 monoclonal antibodies and proprietary CD47-blocking agents and the potential benefits to patients;
   
our requirements for, and the ability to obtain, future funding on favorable terms or at all;
   
our projections for the SIRPαFc development plan and progress of each of our products and technologies, particularly with respect to the timely and successful completion of studies and trials and availability of results from such studies and trials;
   
our expectations about our products’ safety and efficacy;
   
our expectations regarding our ability to arrange for the manufacturing of our products and technologies;
   
our expectations regarding the progress, and the successful and timely completion, of the various stages of the regulatory approval process;
   
our ability to secure strategic partnerships with larger pharmaceutical and biotechnology companies;
   
our strategy to acquire and develop new products and technologies and to enhance the capabilities of existing products and technologies;
   
our plans to market, sell and distribute our products and technologies;
   
our expectations regarding the acceptance of our products and technologies by the market;
   
our ability to retain and access appropriate staff, management, and expert advisers;

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our expectations with respect to existing and future corporate alliances and licensing transactions with third parties, and the receipt and timing of any payments to be made by us or to us in respect of such arrangements; and
   
•  our strategy with respect to the protection of our intellectual property.

All forward-looking statements reflect our beliefs and assumptions based on information available at the time the assumption was made. These forward-looking statements are not based on historical facts but rather on management’s expectations regarding future activities, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. By their nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, known and unknown, that contribute to the possibility that the predictions, forecasts, projections or other forward-looking statements will not occur. Factors which could cause future outcomes to differ materially from those set forth in the forward-looking statements include, but are not limited to:

the effect of continuing operating losses on our ability to obtain, on satisfactory terms, or at all, the capital required to maintain us as a going concern;
   
the ability to obtain sufficient and suitable financing to support operations, preclinical development, clinical trials, and commercialization of products;
   
the risks associated with the development of novel compounds at early stages of development in our intellectual property portfolio;
   
the risks of reliance on third-parties for the planning, conduct and monitoring of clinical trials and for the manufacture of drug product;
   
the risks associated with the development of our product candidates including the demonstration of efficacy and safety;
   
the risks related to clinical trials including potential delays, cost overruns and the failure to demonstrate efficacy and safety;
   
 • the risks of delays and inability to complete clinical trials due to difficulties enrolling patients;
   
risks associated with our inability to successfully develop companion diagnostics for our development candidates;
   
 • delays or negative outcomes from the regulatory approval process;
   
 • our ability to successfully compete in our targeted markets;
   
 • our ability to attract and retain key personnel, collaborators and advisors;
   
risks relating to the increase in operating costs from expanding existing programs, acquisition of additional development programs and increased staff;
   
risk of negative results of clinical trials or adverse safety events by us or others related to our product candidates;
   
 • the potential for product liability claims;
   
 • our ability to achieve our forecasted milestones and timelines on schedule;
   
financial risks related to the fluctuation of foreign currency rates and expenses denominated in foreign currencies;

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our ability to adequately protect proprietary information and technology from competitors;
   
risks related to changes in patent laws and their interpretations;
   
our ability to source and maintain licenses from third-party owners; and
   
the risk of patent-related litigation and the ability to protect trade secrets,

all as further and more fully described under the section of this Prospectus entitled “Risk Factors”.

Although the forward-looking statements contained in this Prospectus are based upon what our management believes to be reasonable assumptions, we cannot assure readers that actual results will be consistent with these forward-looking statements.

Any forward-looking statements represent our estimates only as of the date of this Prospectus and should not be relied upon as representing our estimates as of any subsequent date. We undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events, except as may be required by securities legislation.

DOCUMENTS INCORPORATED BY REFERENCE

Information has been incorporated by reference in this Prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from our corporate secretary at 96 Skyway Avenue, Toronto, Ontario, M9W 4Y9 telephone (416) 595-0627, and are available electronically at www.sedar.com.

We have filed the following documents with the securities commissions or similar regulatory authorities in certain of the provinces of Canada and such documents are specifically incorporated by reference in, and form an integral part of this Prospectus, provided that such documents are not incorporated by reference to the extent that their contents are modified or superseded by a statement contained in this Prospectus or in any subsequently filed document that is also incorporated by reference in this Prospectus:

•   our annual information form dated March 23, 2015, for the year ended December 31, 2014, or “AIF”;
   
our management information circular dated April 22, 2014 relating to our annual and special meeting of shareholders held on May 27, 2014;
   
our audited consolidated financial statements, together with the notes thereto, as at December 31, 2014 and 2013 and for the years then ended prepared under IFRS, as issued by the IASB, and the auditors’ report thereon addressed to our shareholders dated March 23, 2015;
   
our management’s discussion and analysis of financial condition and results of operations for the years ended December 31, 2014 and 2013 dated March 23, 2015;
   
our unaudited interim condensed consolidated financial statements, together with the notes thereto, as at March 31, 2015 and 2014 and for the three months then ended prepared in compliance with International Accounting Standards 34, Interim Financial Reporting, dated May 12, 2015;
   
our management’s discussion and analysis of financial condition and results of operations for the three months ended March 31, 2015 and 2014 dated May 12, 2015;
   
our management information circular dated April 22, 2015 prepared in connection with the annual meeting of shareholders held on May 27, 2015;
   
our material change report dated April 2, 2015 with respect to the pricing of an offering of 1,522,395 Common Shares and 1,077,605 non-voting convertible preferred shares at a price of US$19.50 per share for aggregate gross proceeds of US$50.7 million before deducting underwriting discounts and commissions and other offering expenses; and

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our material change report dated April 14, 2015 with respect to the completion of an offering 1,750,754 Common Shares and 1,077,605 Series II Non-Voting Convertible First Preferred Shares, or “Series II First Preferred Shares”, at a price of US$19.50 per share, including 228,359 Common Shares sold pursuant to the full exercise of the underwriters’ option to purchase additional Common Shares for gross proceeds of approximately US$55.2 million.

Any documents of the type referred to in the preceding paragraph, including any annual information form, comparative annual consolidated financial statements and the auditors’ report thereon, comparative interim consolidated financial statements, management’s discussion and analysis of financial condition and results of operations, material change report (except a confidential material change report), information circular, and the template version of any marketing materials, if filed by us with the securities commissions or similar authorities in the provinces of British Columbia, Alberta, Manitoba, Ontario and Nova Scotia after the date of this Prospectus and before the termination of the distribution, shall be deemed to be incorporated by reference in this Prospectus.

To the extent that any document or information incorporated by reference into this Prospectus is included in a report that is filed with or furnished to the SEC, such document or information shall be deemed to be incorporated by reference as an exhibit to the registration statement on Form F-10 of which this Prospectus forms a part. In addition, any document filed by us with, or furnished by us to, the SEC pursuant to the United States Securities Exchange Act of 1934, as amended, or the “Exchange Act”, subsequent to the date of this Prospectus and prior to the date that is 25 months from the date of this Prospectus shall be deemed to be incorporated by reference into the registration statement of which this Prospectus forms a part, if and to the extent provided in such report.

Any statement contained in this Prospectus or in a document incorporated or deemed to be incorporated by reference herein will be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained in this Prospectus or in any other subsequently filed document which also is, or is deemed to be, incorporated by reference into this Prospectus modifies or supersedes that statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute part of this Prospectus.

Upon a new annual information form and related audited annual financial statements and management’s discussion and analysis being filed by us with, and where required, accepted by, the securities commission or similar regulatory authority in each of the provinces of British Columbia, Alberta, Manitoba, Ontario and Nova Scotia during the term of this Prospectus, the previous annual information form, the previous audited annual financial statements and related management’s discussion and analysis, all unaudited interim financial statements and related management’s discussion and analysis, and material change reports filed prior to the commencement of our financial year in which the new annual information form and related audited annual financial statements and management’s discussion and analysis are filed shall be deemed no longer to be incorporated into this Prospectus for purposes of future offers and sales of Securities under this Prospectus. Upon new interim financial statements and related management’s discussion and analysis being filed by us with the securities commission or similar regulatory authority in each of the provinces of British Columbia, Alberta, Manitoba, Ontario and Nova Scotia during the term of this Prospectus, all interim financial statements and related management’s discussion and analysis filed prior to the new interim consolidated financial statements and related management’s discussion and analysis shall be deemed no longer to be incorporated into this Prospectus for purposes of future offers and sales of Securities under this Prospectus. Upon a new information circular relating to an annual meeting of holders of Common Shares being filed by us with the securities commission or similar regulatory authority in each of the provinces of British Columbia, Alberta, Manitoba, Ontario and Nova Scotia during the term of this Prospectus, the information circular for the preceding annual meeting of holders of Common Shares shall be deemed no longer to be incorporated into this Prospectus for purposes of future offers and sales of Securities under this Prospectus.

One or more Prospectus Supplements containing the specific variable terms for an issue of the Securities and other information in relation to such Securities will be delivered to purchasers of such Securities together with this Prospectus and will be deemed to be incorporated by reference into this Prospectus as of the date of the Prospectus Supplement solely for the purposes of the offering of the Securities covered by any such Prospectus Supplement.

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AVAILABLE INFORMATION

We are subject to the informational requirements of the Exchange Act and applicable Canadian requirements and, in accordance therewith, we file reports and other information with the SEC and with securities regulatory authorities in Canada. Under the multijurisdictional disclosure system adopted by the United States and Canada, such reports and other information may be prepared in accordance with the disclosure requirements of Canada, which are different from those of the United States. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. Reports and other information filed by us with, or furnished to, the SEC may be inspected and copied at the public reference facilities maintained by the SEC in the SEC’s public reference room at 100 F Street, N.E., Washington, D.C., 20549 by paying a fee. You may call the SEC at 1-800-SEC-0330 or access its website at www.sec.gov for further information regarding the public reference facilities. The SEC also maintains a website that contains reports and other information regarding registrants that file electronically with the SEC. The address of the website is www.sec.gov.

We have filed with the SEC a registration statement on Form F-10 under the U.S. Securities Act with respect to the Securities. This Prospectus, including the documents incorporated by reference into this Prospectus, which forms a part of that registration statement, does not contain all of the information set forth in the registration statement, certain parts of which are contained in the exhibits to the registration statement as permitted by the rules and regulations of the SEC. For further information with respect to our corporation and the Securities, reference is made to the registration statement and the exhibits thereto. Statements contained in this Prospectus, including the documents incorporated by reference into this Prospectus, as to the contents of certain documents are not necessarily complete and, in each instance, reference is made to the copy of the document filed as an exhibit to the registration statement. Each such statement is qualified in its entirety by such reference. The registration statement can be found on EDGAR at the SEC’s website at www.sec.gov.

THE CORPORATION

We are an immuno-oncology company developing innovative therapies for the treatment of cancer. Our lead program, SIRPαFc, is a novel, antibody-like protein that harnesses the innate immune system by blocking the activity of CD47, a molecule whose expression is increased on cancer cells to evade the host immune system. Expressed at high levels on the cell surface of a variety of liquid and solid tumors, CD47 functions as a signal that inhibits the destruction of tumor cells by macrophages via phagocytosis. By blocking the activity of CD47, we believe SIRPαFc has the ability to promote the macrophage-mediated killing of tumor cells in a broad variety of cancers both as a monotherapy and in combination with other immune therapies.

RISK FACTORS

An investment in the Securities involves a high degree of risk. Prospective investors should consider carefully the risk factors incorporated by reference in this Prospectus (including in subsequently filed documents incorporated by reference) and those described in any Prospectus Supplement before purchasing the Securities offered hereby. Prospective investors should consider the categories of risks identified and discussed in our annual information form and management’s discussion and analysis incorporated herein by reference. Any one of such risk factors could materially affect our business, financial condition and/or future operating results and prospects and could cause actual events to differ materially from those described in forward-looking statements and information relating to our corporation. Additional risks and uncertainties not currently identified by us or that we currently believe not to be material also may materially and adversely affect our business, financial condition, operations or prospects.

USE OF PROCEEDS

Unless otherwise indicated in an applicable Prospectus Supplement relating to an offering of Securities, we will use the net proceeds that we receive from the sale of Securities for ongoing research and development activities, working capital and general corporate purposes, which may include advancing the development of our SIRPαFc program, and investment in other development programs. Specific information about the use of net proceeds will be described in the applicable Prospectus Supplement.

6


CAPITALIZATION

On April 7, 2015 we completed an underwritten public offering of Common Shares and Series II First Preferred Shares. The offering was made pursuant to an effective registration statement on Form F-1 that was filed with the SEC and was restricted to persons who are not residents of Canada. In the offering, we sold 1,750,754 Common Shares and 1,077,605 Series II First Preferred Shares at a price of US$19.50 per share, including 228,359 Common Shares sold pursuant to the full exercise of the underwriters’ option to purchase additional Common Shares. The gross proceeds to the Corporation from this offering, before deducting underwriting discounts and commissions and other offering expenses payable by the Corporation, were approximately US$55.2 million.

As at June 3, 2015, the following securities were issued and outstanding:

7,185,847 Common Shares;
   
64,904,689 Series I Non-Voting Convertible First Preferred Shares, or “Series I First Preferred Shares”, convertible into 2,163,490 Common Shares;
   
1,077,605 Series II First Preferred Shares convertible into 1,077,605 Common Shares;
   
113,289,012 Common Share purchase warrants convertible into 3,776,300 Common Shares at a weighted- average exercise price of $8.67 per Common Share
   
694,475 stock options with a weighted-average exercise price of $12.13 per Common Share; and
   
37,335 DSUs.

After giving effect to the exercise of all Common Share purchase warrants and options to purchase Common Shares, and the conversion of all Series I and Series II First Preferred Shares and DSUs, there would be 14,935,052 Common Shares issued and outstanding as at June 3, 2015.

There have been no material changes in the number of our issued and outstanding Securities since December 31, 2014 other than the public offering of Common Shares completed on April 7, 2015 and described above and other than as noted below under “Prior Sales”.

PRIOR SALES

The following table summarizes details of all securities issued by us for the 12-month period prior to the date of this Prospectus.

Date of Issuance


Price per
Security or
Exercise Price
(as applicable)
Number of and
Description of Securities

January 14, 16, 19, 21, 22 and 26, 2015 $8.40 Issuance of 92,354 Common Shares on exercise of warrants
January 16 and 19, 2015 $12.00 Issuance of 22,012 Common Shares on exercise of warrants
January 16, 2015 $7.50 Issuance of 3,333 Common Shares on exercise of warrants
February 3, 12, 17 and 27, 2015 $12.00 Issuance of 67,529 Common Shares on exercise of warrants
February 4, 6, 10, 12, 23, 25 and 26, 2015 $8.40 Issuance of 97,256 Common Shares on exercise of warrants
February 27, 2015 $7.50 Issuance of 93 Common Shares on exercise of warrants
March 2, 4, 10, 18, 19 and 24, 2015 $12.00 Issuance of 29,482 Common Shares on exercise of warrants
March 2, 12, 16, 18, 23, 27 and 31, 2015 $8.40 Issuance of 136,000 Common Shares on exercise of warrants
March 5, 2015 $7.50 Issuance of 6,666 Common Shares on exercise of warrants
March 5, 2015 $7.50 Issuance of 3,333 Common Shares on exercise of warrants
May 27, 2015 $28.05 Issuance of 29,000 Options
May 27, 2015 $28.05 Issuance of 8,558 DSU units

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Date of Issuance


Price per
Security or
Exercise Price
(as applicable)
Number of and
Description of Securities

April 1, 2015 $23.44 Issuance of 85,000 Options
April 1, 6, 7, 8, 10, 13, 15, 20 and 23, 2015 $12.00 Issuance of 67,516 Common Shares on exercise of warrants
April 2, 6, 9, 13, 14, 16, 20, 22 and 29, 2015 $8.40 Issuance of 228,932 Common Shares on exercise of warrants
April 6, 14 and 17, 2015 $6.30 Issuance of 92,668 Common Shares on exercise of warrants
April 7, 2015 US$19.50 Issuance of 1,750,754 Common Shares on an underwritten public offering
April 7, 2015 US$19.50 Issuance of 1,077,605 Series II First Preferred Shares on an underwritten public offering
May 1 and 13, 2015 $8.40 Issuance of 4,166 Common Shares on exercise of warrants
May 20 and 22, 2015 $12.00 Issuance of 4,366 Common Shares on exercise of warrants

DESCRIPTION OF COMMON SHARES

Holders of Common Shares are entitled to receive notice of and to attend all meetings of shareholders, except meetings at which holders of another specified class of shares are exclusively entitled to vote, and are entitled to one vote for each Common Share held on all votes taken at such meetings. The holders of Common Shares are entitled to receive such dividends as the board of directors may in their discretion declare, regardless of whether dividends are declared on any other class of shares. Upon liquidation, dissolution or winding up of the Corporation, the holders of Common Shares are entitled to receive any remaining property after payment of any amount required to redeem or retract any issued and outstanding First Preferred Shares of the Corporation and any other shares ranking senior in priority to the Common Shares.

Class B Shares

The holders of the Class B Shares are entitled to receive notice of and to attend any meeting of our shareholders but shall not be entitled to vote any of their Class B Shares at any such meeting. Each issued and fully paid Class B Share may at any time be converted, at the option of the holder, into one Common Share.

DESCRIPTION OF FIRST PREFERRED SHARES

The First Preferred Shares may at any time and from time to time be issued in one or more series and our board of directors may before the issue thereof fix the number of shares in, and determine the designation, rights, privileges, restrictions and conditions attaching to the shares of, each series of First Preferred Shares.

The First Preferred Shares are entitled to priority over the Common Shares and Class B Shares and all other shares ranking junior to the First Preferred Shares with respect to the payment of dividends and the distribution of our assets in the event of our liquidation, dissolution or winding up or other distribution of our assets among our shareholders for the purpose of winding up our affairs.

The First Preferred Shares of each series rank on a parity with the First Preferred Shares of every other series with respect to priority in the payment of dividends and in the distribution of our assets in the event of our liquidation, dissolution or winding up or other distribution of our assets among our shareholders for the purpose of winding up our affairs.

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Series I First Preferred Shares

During 2013, we created a new series of First Preferred Shares, our Series I First Preferred Shares. The holders of Series I First Preferred Shares are not entitled to vote at any meeting of our shareholders (except in limited circumstances provided for in the Business Corporations Act (Ontario)).

The holders of Series I First Preferred Shares are entitled to receive dividends as determined and declared at the discretion of our board of directors equally on a one-for-one basis with the holders of shares of the other series of First Preferred Shares and, at the discretion of our board of directors, either in priority to, or equally on a share-for-share basis with, holders of our Common Shares or Class B Shares. If any amount of cumulative dividends, whether or not declared, or declared non-cumulative dividends, with respect to shares of a series of our First Preferred Shares is not paid in full, the shares of the series will participate on a pro rata basis with the shares of all other series of that class of shares with respect to all accumulated cumulative dividends, whether or not declared, and all declared non-cumulative dividends.

Each issued and fully paid Series I First Preferred Share may at any time be converted, at the option of the holder, into one Common Share, subject to adjustment. Following the 30 for 1 share consolidation completed in November 2014, each presently outstanding Series I First Preferred Share may be converted, at the option of the holder into one thirtieth (1/30th) of a Common Share, subject to further adjustment. Notwithstanding the foregoing, holders of Series I First Preferred Shares will be prohibited from converting Series I First Preferred Shares into Common Shares if, as a result of such conversion, the holder, together with its affiliates, would own more than 4.99% (which the holder may elect to increase or decrease by written notice to us to any other percentage specified in such notice, provided that any increase (but not decrease) will not be effective until the 61st day after such notice) of the total number of our Common Shares then issued and outstanding, unless the holder gives us at least 61 days prior notice of an intent to convert into Common Shares that would cause the holder to own more than 4.99% (or another percentage elected by the holder) of the total number of our Common Shares then issued and outstanding.

In addition, we will not be required to deliver to a holder any Common Shares upon a conversion of our Series I First Preferred Shares into Common Shares if our Common Shares are then listed and posted for trading on the Toronto Stock Exchange (or the TSX Venture Exchange) and to the extent that the conversion would result in the holder, together with any person acting jointly or in concert with the holder within the meaning of the Securities Act (Ontario), beneficially owning or exercising control or direction over Common Shares representing more than:

1.

9.99% of our outstanding Common Shares unless the holder (or, where the holder is not an individual, any director, officer or insider of the holder) has first provided:


  (a)

the stock exchange with a personal information form pursuant to the rules of that stock exchange and the form has been approved by the stock exchange; and

     
  (b)

a copy of the approval of the personal information form by the stock exchange to us; and


2.

19.99% of our outstanding Common Shares, unless we have received approval from the stock exchange and the holders of our Common Shares of the issuance of Common Shares at a meeting of holders of Common Shares which we will call, at our expense, in accordance with the applicable policies of the stock exchange.

In the event of our liquidation, dissolution or winding-up, whether voluntary or involuntary, or in the event of any other distribution of our assets among our shareholders for the purpose of winding-up our affairs, or in the event of a reduction or redemption of our capital stock, the holders of Series I First Preferred Shares are entitled to receive an amount per share equal to that amount of money that we received as consideration for such Series I First Preferred Shares or, in the event that Series I First Preferred Shares were not issued for money, then the amount equal to the fair value of any property we received as consideration for the issuance of such Series I First Preferred Shares divided by the number of Series I First Preferred Shares issued, the whole before any amount shall be paid by us or any of our assets shall be distributed to holders of our Common Shares and Class B Shares. After such payment, the holders of Series I First Preferred Shares are not entitled to share in any further distribution of our property or assets. If any amount payable on return of capital in the event of our liquidation, dissolution or winding-up in respect of shares of a series of our First Preferred Shares is not paid in full, the shares of the series will participate on a pro rata basis with the shares of all other series of that class of shares with respect to all amounts payable on return of capital in the event of our liquidation, dissolution or winding-up.

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Series II First Preferred Shares

During 2015, we created a new series of First Preferred Shares, our Series II First Preferred Shares. The holders of Series II First Preferred Shares are not entitled to vote at any meeting of our shareholders (except in limited circumstances provided for in the Business Corporations Act (Ontario)).

The holders of Series II First Preferred Shares are entitled to receive dividends as determined and declared at the discretion of our board of directors on a parity basis with the holders of shares of the other series of First Preferred Shares and, at the discretion of our board of directors, either in priority to, or equally on a share-for-share basis with, holders of our Common Shares or Class B Shares. If any amount of cumulative dividends, whether or not declared, or declared non-cumulative dividends, with respect to shares of a series of our First Preferred Shares is not paid in full, the shares of the series will participate on a pro rata basis with the shares of all other series of that class of shares with respect to all accumulated cumulative dividends, whether or not declared, and all declared non-cumulative dividends.

Each issued and fully paid Series II First Preferred Share may at any time be converted, at the option of the holder, into one common share, subject to adjustment. Notwithstanding the foregoing, holders of Series II First Preferred Shares will be prohibited from converting Series II First Preferred Shares into Common Shares if, as a result of such conversion, the holder, together with its affiliates, would own more than 4.99% (which the holder may elect to increase or decrease by written notice to us to any other percentage specified in such notice, provided that any increase (but not decrease) will not be effective until the 61st day after such notice) of the total number of our Common Shares then issued and outstanding, unless the holder gives us at least 61 days prior notice of an intent to convert into Common Shares that would cause the holder to own more than 4.99% of the total number of our Common Shares then issued and outstanding.

In addition, we will not be required to deliver to a holder any Common Shares upon a conversion of our Series II First Preferred Shares into Common Shares if our Common Shares are then listed and posted for trading on the Toronto Stock Exchange (or the TSX Venture Exchange) and to the extent that the conversion would result in the holder, together with any person acting jointly or in concert with the holder within the meaning of the Securities Act (Ontario), beneficially owning or exercising control or direction over Common Shares representing more than:

  1.

9.99% of our outstanding Common Shares unless the holder (or, where the holder is not an individual, any director, officer or insider of the holder) has first provided:


    (a)

the stock exchange with a personal information form pursuant to the rules of that stock exchange and the form has been approved by the stock exchange; and

       
    (b)

a copy of the approval of the personal information form by the stock exchange to us; and


  2.

19.99% of our outstanding Common Shares, unless we have received approval from the stock exchange and the holders of our Common Shares of the issuance of Common Shares at a meeting of holders of Common Shares which we will call, at our expense, in accordance with the applicable policies of the stock exchange.

In the event of our liquidation, dissolution or winding-up, whether voluntary or involuntary, or in the event of any other distribution of our assets among our shareholders for the purpose of winding-up our affairs, or in the event of a reduction or redemption of our capital stock, the holders of Series II First Preferred Shares are entitled to receive an amount per share equal to that amount of money that we received as consideration for such Series II First Preferred Shares or, in the event that Series II First Preferred Shares were not issued for money, then the amount equal to the fair value of any property we received as consideration for the issuance of such Series II First Preferred Shares divided by the number of Series II First Preferred Shares issued, the whole before any amount shall be paid by us or any of our assets shall be distributed to holders of our Common Shares and Class B Shares. After such payment, the holders of Series II First Preferred Shares are not entitled to share in any further distribution of our property or assets. If any amount payable on return of capital in the event of our liquidation, dissolution or winding-up in respect of shares of a series of our First Preferred Shares is not paid in full, the shares of the series will participate on a pro rata basis with the shares of all other series of that class of shares with respect to all amounts payable on return of capital in the event of our liquidation, dissolution or winding-up.

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DESCRIPTION OF WARRANTS

The following description of the terms of Warrants sets forth certain general terms and provisions of Warrants in respect of which a Prospectus Supplement may be filed. The particular terms and provisions of Warrants offered by any Prospectus Supplement, and the extent to which the general terms and provisions described below may apply thereto, will be described in the Prospectus Supplement filed in respect of such Warrants. Warrants may be offered separately or in combination with one or more other Securities.

The description of the general terms and provisions of Warrants described in any Prospectus Supplement will include, where applicable:

the designation and aggregate number of Warrants offered;
   
the price at which the Warrants will be offered;
   
if other than Canadian dollars, the currency or currency unit in which the Warrants are denominated;
   
the designation and terms of the Common Shares that may be acquired upon exercise of the Warrants;
   
the date on which the right to exercise the Warrants will commence and the date on which the right will expire;
   
the number of Common Shares that may be purchased upon exercise of each Warrant and the price at which and currency or currencies in which that amount of securities may be purchased upon exercise of each Warrant;
   
the designation and terms of any Securities with which the Warrants will be offered, if any, and the number of the Warrants that will be offered with each Security;
   
the date or dates, if any, on or after which the Warrants and the related Securities will be transferable separately;
   
the minimum or maximum amount, if any, of Warrants that may be exercised at any one time;
   
whether the Warrants will be subject to redemption or call, and, if so, the terms of such redemption or call provisions; and
   
any other material terms, conditions and rights (or limitations on such rights) of the Warrants.

We reserve the right to set forth in a Prospectus Supplement specific terms of the Warrants that are not within the parameters set forth in this Prospectus. In addition, to the extent that any particular terms of the Warrants described in a Prospectus Supplement differ from any of the terms described in this Prospectus, the description of such terms set forth in this Prospectus shall be deemed to have been superseded by the description of such differing terms set forth in such Prospectus Supplement with respect to such Warrants.

DESCRIPTION OF UNITS

We may issue Units comprised of one or more of the other Securities described in this Prospectus in any combination. Each Unit will be issued so that the holder of the Unit is also the holder of each Security included in the Unit. Thus, the holder of a Unit will have the rights and obligations of a holder of each included Security. The unit agreement, if any, under which a Unit is issued may provide that the Securities comprising the Unit may not be held or transferred separately, at any time or at any time before a specified date.

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The particular terms and provisions of Units offered by any Prospectus Supplement, and the extent to which the general terms and provisions described below may apply thereto, will be described in the Prospectus Supplement filed in respect of such Units.

The particular terms of each issue of Units will be described in the related Prospectus Supplement. This description will include, where applicable:

the designation and aggregate number of Units offered;
   
the price at which the Units will be offered;
   
if other than Canadian dollars, the currency or currency unit in which the Units are denominated;
   
the terms of the Units and of the Securities comprising the Units, including whether and under what circumstances those securities may be held or transferred separately;
   
any provisions for the issuance, payment, settlement, transfer or exchange of the Units or of the Securities comprising the Units; and
   
any other material terms, conditions and rights (or limitations on such rights) of the Units.

We reserve the right to set forth in a Prospectus Supplement specific terms of the Units that are not within the parameters set forth in this Prospectus. In addition, to the extent that any particular terms of the Units described in a Prospectus Supplement differ from any of the terms described in this Prospectus, the description of such terms set forth in this Prospectus shall be deemed to have been superseded by the description of such differing terms set forth in such Prospectus Supplement with respect to such Units.

MARKET FOR SECURITIES

Our Common Shares were listed on the TSX Venture Exchange, or “TSXV”, until April 22, 2014 when we delisted from the TSXV and began trading on the TSX. Our Common Shares traded under the symbol “SSS” until June 6, 2014 when the symbol was changed to “TR”. Our Common Shares were listed on the OTCQX International under the symbol “SCTPF” from May 20, 2013 until we delisted and began trading on NASDAQ, under the symbol “TRIL” on December 19, 2014.

The high and low market prices and the aggregate volume of trading of our Common Shares for each month for the most recent twelve months on the TSX, NASDAQ and the OTCQX International were as follows:

TSX(1)

Month High ($) Low ($) Volume (#)
June 1 to June 3, 2015 28.69 26.30 9,941
May 2015 30.57 21.21 180,416
April 2015 37.27 22.69 538,051
March 2015 26.07 17.00 307,858
February 2015 20.21 15.14 204,365
January 2015 18.37 10.50 361,364
December 2014 10.50 7.02 209,040
November 2014 10.35 8.25 183,076
October 2014 8.40 6.30 59,873
September 2014 9.15 7.20 66,472
August 2014 9.15 8.25 51,381
July 2014 10.35 8.40 60,773
June 2014 12.30 8.10 103,066

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Notes:

(1)

Common Share market prices are restated to reflect the 30 for 1 share consolidation completed in November 2014.

NASDAQ(1)

Month High (US$) Low (US$) Volume (#)
June 1 to June 3, 2015 22.99 21.05 335,960
May 2015 24.56 17.57 3,303,704
April 2015 27.99 18.80 7,607,223
March 2015 20.88 13.06 2,542,925
February 2015 16.50 12.61 1,321,813
January 2015 15.65 9.05 3,046,079
December 2014 9.10 7.01 733,484

Notes:

(1)

Our Common Shares began trading on the OTCQX International on May 20, 2013 and on the NASDAQ on December 19, 2014.

OTCQX International(1)(2)

Month High (US$) Low (US$) Volume (#)
December 2014 8.35 6.02 159,907
November 2014 9.09 7.35 177,862
October 2014 7.65 5.64 68,959
September 2014 8.55 6.30 40,676
August 2014 8.41 7.50 45,757
July 2014 9.96 7.61 32,116
June 2014 11.49 7.28 32,151
May 2014 11.31 7.14 34,901
April 2014 14.24 8.70 50,706

Notes: Our

(1)
Our Common Shares began trading on the OTCQX International on May 20, 2013 and on NASDAQ on December 19, 2014.
(2)

Common Share market prices are restated to reflect the 30 for 1 share consolidation completed in November 2014. ​

PLAN OF DISTRIBUTION

We may, from time to time, during the 25-month period that this Prospectus remains valid, offer for sale and issue Securities. We may issue and sell up to US$100,000,000, in the aggregate, of Securities.

We may sell Securities to or through underwriters, dealers, placement agents or other intermediaries and also may sell Securities directly to purchasers or through agents, subject to obtaining any applicable exemption from registration requirements.

The distribution of Securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, including in transactions that are deemed to be “at-the-market distributions” as defined in National Instrument 44-102 Shelf Distributions, or NI 44-102, including sales made directly on the TSX, NASDAQ or other existing trading markets for the Securities, or at prices related to such prevailing market prices to be negotiated with purchasers and as set forth in an accompanying Prospectus Supplement. In connection with the sale of Securities, underwriters may receive compensation from us or from purchasers of Securities for whom they may act as agents in the form of discounts, concessions or commissions. Underwriters, dealers, placement agents or other intermediaries that participate in the distribution of Securities may be deemed to be underwriters and any discounts or commissions received by them from us and any profit on the resale of Securities by them may be deemed to be underwriting discounts and commissions under applicable securities legislation. Any such transactions that are deemed to be “at-the-market distributions” as defined in NI 44-102 will be conducted in accordance with applicable securities legislation in Canada and will be subject to regulatory approval.

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If so indicated in the applicable Prospectus Supplement, we may authorize dealers or other persons acting as our agents to solicit offers by certain institutions to purchase the Securities directly from us pursuant to contracts providing for payment and delivery on a future date. These contracts will be subject only to the conditions set forth in the applicable Prospectus Supplement or supplements, which will also set forth the commission payable for solicitation of these contracts.

The Prospectus Supplement relating to any offering of Securities will set forth the terms of the offering of the Securities, including the name or names of any underwriters, dealers, placement agents or intermediaries and any fees or compensation payable to them in connection with the offering and sale of a particular issue of Securities, the public offering price or prices of the Securities and the proceeds to us from the sale of the Securities.

Under agreements which may be entered into by us, underwriters, dealers, placement agents and other intermediaries who participate in the distribution of Securities may be entitled to indemnification by us against certain liabilities, including liabilities under the U.S. Securities Act and applicable Canadian securities legislation, or to contribution with respect to payments which such underwriters, dealers, placement agents or other intermediaries may be required to make in respect thereof. The underwriters, dealers, placement agents and other intermediaries with whom we enter into agreements may be customers of, engage in transactions with or perform services for us in the ordinary course of business. Any offering of First Preferred Shares, Warrants or Units will be a new issue of securities with no established trading market. Unless otherwise specified in the applicable Prospectus Supplement, the First Preferred Shares, Warrants or Units will not be listed on any securities exchange. Unless otherwise specified in the applicable Prospectus Supplement, there is no market through which the First Preferred Shares, Warrants or Units may be sold and purchasers may not be able to resell First Preferred Shares, Warrants or Units purchased under this Prospectus or any Prospectus Supplement. This may affect the pricing of the First Preferred Shares, Warrants or Units in the secondary market, the transparency and availability of trading prices, the liquidity of the securities, and the extent of issuer regulation. Certain dealers may make a market in the First Preferred Shares, Warrants or Units, as applicable, but will not be obligated to do so and may discontinue any market making at any time without notice. No assurance can be given that any dealer will make a market in the First Preferred Shares, Warrants or Units or as to the liquidity of the trading market, if any, for the First Preferred Shares, Warrants or Units.

Subject to applicable securities legislation, in connection with any offering of Securities under this Prospectus, other than an “at-the-market distribution”, the underwriters, dealers or agents, if any, may over-allot or effect transactions which stabilize or maintain the market price of the Securities offered at a level above that which might otherwise prevail in the open market. These transactions, if commenced, may be discontinued at any time. No underwriter, dealer or agent involved in an “at-the-market distribution”, as defined in NI 44-102, no affiliate of such an underwriter, dealer or agent and no person acting jointly or in concert with such an underwriter, dealer or agent will over-allot Securities in connection with such distribution or effect any other transactions that are intended to stabilize or maintain the market price of the Securities.

INCOME TAX CONSIDERATIONS

The applicable Prospectus Supplement may describe certain Canadian or United States federal income tax consequences which may be applicable to a purchaser of Securities offered thereunder.

DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT

The following documents have been, or will be, filed with the SEC as part of the registration statement on Form F-10 of which this Prospectus forms a part: the documents listed under “Documents Incorporated by Reference”; consents of accountants and counsel; and powers of attorney from some of our directors and officers. A copy of any applicable form of warrant agreement will be filed by post-effective amendment to the registration statement or by incorporation by reference to documents filed or furnished with the SEC under the Exchange Act.

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EXPERTS

Our auditors are Ernst & Young LLP, Chartered Professional Accountants, Licensed Public Accountants, Toronto, Ontario, Canada. Our audited consolidated financial statements as at December 31, 2014 and 2013 and for the years then ended incorporated by reference into this Prospectus have been audited by Ernst & Young LLP, Independent Registered Public Accounting Firm, as indicated in their report dated March 23, 2015 as set forth in their report thereon incorporated herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing. Ernst & Young LLP has been our auditors since inception on March 31, 2004.

Ernst & Young LLP has advised that they are independent with respect to us within the meaning of the Rules of the Professional Conduct of the Chartered Professional Accountants of Ontario (registered name of The Institute of Chartered Accountants of Ontario) and within the meaning of the U.S. Securities Act and the applicable rules and regulations thereunder adopted by the SEC and the United States Public Company Accounting Oversight Board.

REGISTRAR AND TRANSFER AGENT

Our registrar and transfer agent in Canada is Computershare Investor Services Inc. at its principal office in Toronto, Ontario and the co-registrar and co-transfer agent in the United States is Computershare Trust Company, N.A., at its offices in Canton, Massachusetts.

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2,750,000 Common Shares

3,250,000 Series II Non-Voting Convertible First Preferred Shares

 

Prospectus Supplement

 

May 26, 2017

 

Sole Book-Running Manager

Cowen

Co-Manager

Ladenburg Thalmann