Trillium Therapeutics Inc., or we, our, us or the
Corporation, is hereby qualifying for distribution common shares of the
Corporation, or the common shares, and 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$ per common share and US$ 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, 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 24, 2017, the last trading day prior to the date hereof, the closing price
of the common shares on NASDAQ and the TSX were US$5.65 and Cdn$7.53
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.
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 $
per
common share and $
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 , 2017, or such
other date as the Corporation and the representative may agree, but in any event
no later than , 2017. See
Underwriting.
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.
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.
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.
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 SECs 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.
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.
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 24, 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$0.7429. The high and low exchange rates are intra-day
values rather than noon or closing rates.
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.
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:
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
managements 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:
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.
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.
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:
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 managements 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.
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.
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.
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.
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.
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
shareholders 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 shareholders 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.
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.
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.
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$ .
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:
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.
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.
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 24, 2017
|
6.40
|
5.55
|
758,995
|
8.77
|
7.45
|
81,674
|
S-15
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.
S-16
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
|
|
|
|
|
Ladenburg Thalmann & Co. Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
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$ 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$ per common share and US$ 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.
S-18
|
|
No Exercise
|
|
|
Full Exercise
|
|
|
|
|
|
|
|
|
|
|
|
|
Series II
First
|
|
|
|
|
|
|
|
|
|
|
|
Series II First
|
|
|
|
|
|
|
Common
|
|
|
|
|
|
Preferred
|
|
|
|
|
|
Common
|
|
|
|
|
|
Preferred
|
|
|
|
|
|
|
Shares
|
|
|
|
|
|
Shares
|
|
|
|
|
|
Shares
|
|
|
|
|
|
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share
|
|
US$
|
|
|
|
|
|
US$
|
|
|
|
|
|
US$
|
|
|
|
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
US$
|
|
|
|
|
|
US$
|
|
|
|
|
|
US$
|
|
|
|
|
|
US$
|
|
|
|
|
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$ .
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 holders 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 holders securities in connection with the termination of the
holders 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
holders 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.
S-19
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 makers 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.
S-20
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.
S-21
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, 57281968, 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 Investors name,
address and passport number or Israeli identification number.
S-22
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 Holders 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.
S-24
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 Holders 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 Holders 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 Holders 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.
S-25
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 Holders 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
Holders 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.
S-26
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 Holders 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 Holders 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 Holders
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 Holders 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.
S-27
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 Holders 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 Holders tax basis in such common shares or Series II First Preferred
Shares sold or otherwise disposed of. A US Holders tax basis in our common
shares or Series II First Preferred Shares generally will be such holders 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. Holders 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.
S-28
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. Holders 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. Holders 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.
S-29
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 Holders US federal income tax liability on a dollar-for-dollar
basis, whereas a deduction will reduce a US Holders 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 Holders US federal income tax liability that such US Holders foreign
source taxable income bears to such US Holders worldwide taxable income. In
applying this limitation, a US Holders 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 Holders 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 Holders 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.
S-30
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.
S-31
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.
S-32
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
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Dated June 4, 2015
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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
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.
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Three months
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$1 Canadian dollar equivalent in
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ended
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Year ended December 31,
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United States dollars
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March 31, 2015
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2014
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2013
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2012
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Average rate for period
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US$ 0.7920
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US$ 0.9021
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0.9662 US$
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1.0010
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High for period
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0.8562
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0.9444
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1.0188
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1.0371
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Low for period
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0.7791
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0.8568
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0.9314
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0.9576
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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.
1
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:
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our expected future loss and accumulated
deficit levels;
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our projected financial position and estimated
cash burn rate;
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our expectations about the timing of achieving
milestones and the cost of our development programs;
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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;
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our requirements for, and the ability to
obtain, future funding on favorable terms or at all;
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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;
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our expectations about our products safety and
efficacy;
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our expectations regarding our ability to
arrange for the manufacturing of our products and technologies;
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our expectations regarding the progress, and
the successful and timely completion, of the various stages of the
regulatory approval process;
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our ability to secure strategic partnerships
with larger pharmaceutical and biotechnology companies;
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our strategy to acquire and develop new
products and technologies and to enhance the capabilities of existing
products and technologies;
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our plans to market, sell and distribute our
products and technologies;
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our expectations regarding the acceptance of
our products and technologies by the market;
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our ability to retain and access appropriate
staff, management, and expert advisers;
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2
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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
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our strategy with respect to the protection of
our intellectual property.
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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
managements 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:
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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;
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the ability to obtain sufficient and suitable
financing to support operations, preclinical development, clinical trials,
and commercialization of products;
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the risks associated with the development of
novel compounds at early stages of development in our intellectual
property portfolio;
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the risks of reliance on third-parties for the
planning, conduct and monitoring of clinical trials and for the
manufacture of drug product;
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the risks associated with the development of
our product candidates including the demonstration of efficacy and safety;
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the risks related to clinical trials including
potential delays, cost overruns and the failure to demonstrate efficacy
and safety;
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the risks of delays and inability to complete
clinical trials due to difficulties enrolling patients;
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risks associated with our inability to
successfully develop companion diagnostics for our development candidates;
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delays or negative outcomes from the regulatory
approval process;
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our ability to successfully compete in our
targeted markets;
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our ability to attract and retain key
personnel, collaborators and advisors;
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risks relating to the increase in operating
costs from expanding existing programs, acquisition of additional
development programs and increased staff;
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risk of negative results of clinical trials or
adverse safety events by us or others related to our product candidates;
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the potential for product liability claims;
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our ability to achieve our forecasted
milestones and timelines on schedule;
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financial risks related to the fluctuation of
foreign currency rates and expenses denominated in foreign currencies;
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3
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our ability to adequately protect proprietary
information and technology from competitors;
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risks related to changes in patent laws and
their interpretations;
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our ability to source and maintain licenses
from third-party owners; and
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the risk of patent-related litigation and the
ability to protect trade secrets,
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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:
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our annual information form dated March 23,
2015, for the year ended December 31, 2014, or AIF;
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our management information circular dated April
22, 2014 relating to our annual and special meeting of shareholders held
on May 27, 2014;
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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;
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our managements discussion and analysis of
financial condition and results of operations for the years ended December
31, 2014 and 2013 dated March 23, 2015;
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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 managements 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
|
4
|
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, managements 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 managements 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 managements discussion and analysis, all unaudited
interim financial statements and related managements 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 managements 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 managements 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
managements discussion and analysis filed prior to the new interim consolidated
financial statements and related managements 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.
5
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 SECs
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 SECs
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 managements 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;
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|
|
|
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
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|
|
|
694,475 stock options with a weighted-average
exercise price of $12.13 per Common Share; and
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|
|
|
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
|
7
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.
8
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
|
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|
|
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(b)
|
a copy of the approval of the personal information form
by the stock exchange to us; and
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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.
9
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.
10
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.
11
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;
|
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if other than Canadian dollars, the currency or
currency unit in which the Units are denominated;
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|
|
|
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;
|
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|
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any provisions for the issuance, payment,
settlement, transfer or exchange of the Units or of the Securities
comprising the Units; and
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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 ($)
|
Volume (#)
|
June 1 to June 3, 2015
|
28.69
|
26.30
|
9,941
|
May 2015
|
30.57
|
21.21
|
180,416
|
April 2015
|
37.27
|
22.69
|
538,051
|
March 2015
|
26.07
|
17.00
|
307,858
|
February 2015
|
20.21
|
15.14
|
204,365
|
January 2015
|
18.37
|
10.50
|
361,364
|
December 2014
|
10.50
|
7.02
|
209,040
|
November 2014
|
10.35
|
8.25
|
183,076
|
October 2014
|
8.40
|
6.30
|
59,873
|
September 2014
|
9.15
|
7.20
|
66,472
|
August 2014
|
9.15
|
8.25
|
51,381
|
July 2014
|
10.35
|
8.40
|
60,773
|
June 2014
|
12.30
|
8.10
|
103,066
|
12
Notes:
(1)
|
Common Share market prices are restated to reflect the 30
for 1 share consolidation completed in November
2014.
|
NASDAQ
(1)
Month
|
High (US$)
|
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.
13
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.
14
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.
15
Common Shares
Series II Non-Voting Convertible First Preferred Shares
Prospectus Supplement
, 2017
Cowen
Ladenburg Thalmann
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