---



ANNUAL INFORMATION FORM

FOR THE YEAR ENDED DECEMBER 31, 2017

2488 Dunwin Drive Mississauga, Ontario L5L 1J9
www.trilliumtherapeutics.com

Unless otherwise indicated, all information in the Annual
Information Form is presented as at and for the year ended December 31, 2017

March 8, 2018

---

TABLE OF CONTENTS

|CAUTIONARY
      STATEMENT REGARDING FORWARD-LOOKING STATEMENTS  | 3 
|---------------------------------------------------------------- | --
|                                                                 |   
|CORPORATE
      INFORMATION                                      | 5 
|                                                                 |   
|BUSINESS                                                         | 5 
|                                                                 |   
|GENERAL
      DEVELOPMENT OF THE BUSINESS  3 YEAR SUMMARY       | 18
|                                                                 |   
|RISK
      FACTORS                                               | 20
|                                                                 |   
|DESCRIPTION
      OF SHARE CAPITAL                               | 34
|                                                                 |   
|MARKET
      FOR SECURITIES                                      | 39
|                                                                 |   
|BOARD
      OF DIRECTORS AND MANAGEMENT                          | 40
|                                                                 |   
|CEASE
      TRADE ORDERS, BANKRUPTCIES, PENALTIES OR SANCTIONS   | 42
|                                                                 |   
|CONFLICTS
      OF INTEREST                                      | 43
|                                                                 |   
|LEGAL
      PROCEEDINGS                                          | 43
|                                                                 |   
|INTEREST
      OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS | 43
|                                                                 |   
|INTEREST
      OF EXPERTS                                        | 43
|                                                                 |   
|TRANSFER
      AGENT                                             | 43
|                                                                 |   
|MATERIAL
      CONTRACTS                                         | 43
|                                                                 |   
|AUDIT
      COMMITTEE INFORMATION                                | 44
|                                                                 |   
|ADDITIONAL
      INFORMATION                                     | 47

SCHEDULE A - CHARTER OF THE AUDIT COMMITTEE

---

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Annual Information Form, or AIF, 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 AIF include, but are not limited to, statements with respect
to:

| |  | our expected future loss and accumulated deficit levels;                                                                                                                                                                                                                                   
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | our projected financial position and estimated cash burn
      rate;                                                                                                                                                                                                                       
| |  | our requirements for, and the ability to obtain, future
      funding on favorable terms or at all;                                                                                                                                                                                        
| |  | our projections for the SIRPαFc development plans and
      progress of each of our products and technologies, particularly with
      respect to the timely and successful completion of studies and trials and
      availability of results from such studies and trials;               
| |  | our expectations about our products safety and efficacy;                                                                                                                                                                                                                                  
| |  | our expectations regarding our ability to arrange for and
      scale up the manufacturing of our products and technologies;                                                                                                                                                               
| |  | our expectations regarding the progress, and the
      successful and timely completion, of the various stages of the regulatory
      approval process;                                                                                                                                   
| |  | our expectations about the timing of achieving milestones
      and the cost of our development programs;                                                                                                                                                                                  
| |  | our observations and expectations regarding the relative
      low binding of SIRPαFc to red blood cells, or RBCs compared to anti-CD47
      monoclonal antibodies and proprietary CD47-blocking agents and the
      potential benefits to patients;                                     
| |  | our ability to intensify the dose of TTI-621 with the
      goal of achieving increased blockade of CD47;                                                                                                                                                                                  
| |  | our plans to market, sell and distribute our products and
      technologies;                                                                                                                                                                                                              
| |  | our expectations regarding the acceptance of our products
      and technologies by the market;                                                                                                                                                                                            
| |  | our ability to retain and access appropriate staff,
      management and expert advisers;                                                                                                                                                                                                  
| |  | our expectations about the differentiated nature and
      potential for best-in-class product development programs and discovery
      research capabilities of Fluorinov Pharma Inc., or Fluorinov;                                                                                      
| |  | our ability to generate future product development
      programs with improved pharmacological properties and acceptable safety
      profiles using Fluorinov technology;                                                                                                                
| |  | our expectations about whether various clinical and
      regulatory milestones with an existing Fluorinov compound will be
      achieved;                                                                                                                                                
| |  | our expectations of the final quantum and form of any
      future contingent milestone payments related to the Fluorinov acquisition;                                                                                                                                                     
| |  | our expectations of the ability to secure the requisite
      approvals (including approvals from the Toronto Stock Exchange, or TSX,
      and the NASDAQ Capital Market, or NASDAQ) with respect to the issuance of any common
      shares in satisfaction of future milestone payments;
| |  | our ability to secure strategic partnerships with larger
      pharmaceutical and biotechnology companies;                                                                                                                                                                                 
| |  | our strategy to acquire and develop new products and
      technologies and to enhance the safety and efficacy of existing products
      and technologies;                                                                                                                                
| |  | our expectations with respect to existing and future
      corporate alliances and licensing transactions with third parties, and the
      receipt and timing of any payments to be made by us or to us in respect of
      such arrangements; and                                        
| |  | our strategy with respect to the protection of our
      intellectual property.                                                                                                                                                                                                            

All forward-looking statements reflect our beliefs and
assumptions based on information available at the time the assumption was made.
These forward-looking statements are not based on historical facts but rather on
managements expectations regarding future activities, results of operations,
performance, future capital and other expenditures (including the amount, nature
and sources of funding thereof), competitive advantages, business prospects and
opportunities.

By its 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. In evaluating
forward-looking statements, readers should specifically consider various factors, including the
risks outlined under the heading Risk Factors in this AIF. Some of these risks
and assumptions include, among others:

3

---

| |  | substantial fluctuation of losses from quarter to quarter
      and year to year due to numerous external risk factors, and anticipation
      that we will continue to incur significant losses in the future;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | uncertainty as to our ability to raise additional funding
      to support operations;                                                                                                                         
| |  | our ability to generate product revenue to maintain our
      operations without additional funding;                                                                                                           
| |  | the risks associated with the development of our product
      candidates which are at early stages of development;                                                                                            
| |  | reliance on third parties to plan, conduct and monitor
      our preclinical studies and clinical trials;                                                                                                      
| |  | our product candidates may fail to demonstrate safety and
      efficacy to the satisfaction of regulatory authorities or may not
      otherwise produce positive results;                                    
| |  | risks related to filing Investigational New Drug
      applications, or INDs, to commence clinical trials and to continue
      clinical trials if approved;                                                   
| |  | the risks of delays and inability to complete clinical
      trials due to difficulties enrolling patients;                                                                                                    
| |  | competition from other biotechnology and pharmaceutical
      companies;                                                                                                                                       
| |  | our reliance on the capabilities and experience of our
      key executives and scientists and the resulting loss of any of these
      individuals;                                                           
| |  | our ability to fully realize the benefits of
      acquisitions;                                                                                                                                               
| |  | our ability to adequately protect our intellectual
      property and trade secrets;                                                                                                                           
| |  | our ability to source and maintain licenses from
      third-party owners;                                                                                                                                     
| |  | the risk of patent-related litigation; and                                                                                                                                                                     
| |  | our expectations regarding our status as a passive
      foreign investment company, or PFIC,                                                                                                                  

all as further and more fully described under the heading Risk
Factors in this AIF.

Although the forward-looking statements contained in this AIF
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 AIF 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.

All references in this AIF to the Company, Trillium, we,
us, or our refer to Trillium Therapeutics Inc. and the subsidiaries through
which it conducts its business, unless otherwise indicated.

All dollar amounts are in thousands of Canadian dollars, other
than per share amounts and unless otherwise indicated.

4

---

CORPORATE INFORMATION

The Company was incorporated under the Business Corporations
Act(Alberta) on March 31, 2004 as Neurogenesis Biotech Corp. On October 19,
2004, the Company amended its articles of incorporation to change its name to
Stem Cell Therapeutics Corp., or SCT, and on November 7, 2013 SCT was continued
under the Business Corporations Act (Ontario), or OBCA. Articles of
amalgamation were filed on June 1, 2014 to amalgamate SCT with its wholly-owned
subsidiary, Trillium Therapeutics Inc., or Trillium Privateco, and the
amalgamated entity continued to operate under the name Trillium Therapeutics
Inc.

We are a company domiciled in Ontario, Canada. Our head office
and registered office is located at 2488 Dunwin Drive, Mississauga, Ontario,
Canada, L5L 1J9. We have one wholly-owned subsidiary, Trillium Therapeutics USA
Inc., which was incorporated March 26, 2015 in the State of Delaware. Our
website address is www.trilliumtherapeutics.com.

On January 26, 2016, we acquired all the outstanding shares of
Fluorinov, a corporation existing under the OBCA. See Business - Small Molecule
Program, below. On January 1, 2017 the Company amalgamated with its
wholly-owned subsidiary Fluorinov.

Our common shares are listed on the TSX and the NASDAQ under
the symbol TRIL.

BUSINESS

Overview

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 signal regulatory protein alpha, or SIRPα, linked to the Fc region of a
human immunoglobulin G1, or IgG1. It is designed to act as a soluble decoy
receptor, preventing CD47 from delivering its inhibitory (do not eat) signal.
Neutralization of the inhibitory CD47 signal enables the activation of
macrophage anti-tumor effects by pro-phagocytic (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. We are
also developing a second SIRPαFc fusion protein, TTI-622. TTI-622 consists of
the extracellular CD47-binding domain of human SIRPα linked to a human
immunoglobulin G4, or IgG4 Fc region, which has a decreased ability to engage Fc
receptors than an IgG1 Fc. We plan to initiate a Phase I clinical trial in 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. Our most advanced preclinical program stemming from this platform is
an epidermal growth factor receptor, or EGFR antagonist with increased uptake
and retention in the brain. In addition, a number of compounds directed at
undisclosed immuno-oncology targets are currently in the discovery phase.

Our Strategy

Our goal is to become a leading innovator in the field of
oncology by targeting immune-regulatory pathways that tumor cells exploit to
evade the host immune system.

| |  | Rapidly advance the clinical development of
      TTI-621. We are enrolling patients with advanced hematologic
      malignancies in the Phase Ib expansion phase of our first-in-human
      clinical trial of TTI-621 administered by intravenous infusion. We are
      also enrolling patients in our second Phase I clinical trial with
      intratumoral injection of TTI-621 in percutaneously accessible solid
      tumors and mycosis fungoides/Sézary syndrome.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5

---

| |  | Expand our TTI-621 clinical program to include
      additional cancer indications. Because CD47 is highly expressed by multiple
      liquid and solid tumors, and high expression is correlated with worse
      clinical outcomes, we believe SIRPαFc has potential to be effective in a
      variety of cancers. Our clinical development plans include a broad
      approach for the treatment of hematological malignancies, where we hope to
      identify one or more indications where TTI-621 may provide clinical
      benefit and then move rapidly to focused development programs for those
      indications. We have also expanded our trials to include combination
      treatment cohorts. We have employed a more targeted approach with solid
      tumors, focusing on intratumoral injection.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | Maximize value of
      SIRPαFc through advancement of
      TTI-622. We plan to begin testing TTI-622 in a Phase I clinical
      trial this year. We expect to develop TTI-622 for combination therapy
      treatment where we believe it may have an advantage over competing
      IgG4-based antibodies due to its expected lack of RBC binding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | Build a pipeline of novel oncology products using
      our proprietary medicinal chemistry platform. We have several
      preclinical and discovery stage assets developed using our proprietary
      fluorine chemistry platform. We plan to advance these novel oncology
      products for internal development or out-license.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

Our Product Candidates



SIRPαFc

Blocking the CD47 do not eat signal using a
SIRPαFc decoy receptor

The immune system is the bodys mechanism to identify and
eliminate pathogens, and can be divided into the innate immune system and the
adaptive immune system. The innate immune system is the bodys first line of
defense to identify and eliminate pathogens and consists of proteins and cells,
such as macrophages, that identify and provide an immediate response to
pathogens. The adaptive immune system is activated by, and adapts to, pathogens,
creating a targeted and durable response. Cancer cells often have the ability to
reduce the immune systems ability to recognize and destroy them.

6

---

Macrophages are a type of white blood cell that can ingest and
destroy (phagocytose) other cells. Macrophage activity is controlled by both
positive eat and negative do not eat signals. Recently, a role for
macrophages in the control of tumors has been described. Tumor cells may express
eat signals (e.g., calreticulin) that make themselves visible to macrophages.
To counterbalance this increased visibility the tumor cells often express high
levels of CD47, which transmits a do not eat signal by binding SIRPα on the
surface of macrophages. We believe that the higher expression of CD47 on the
tumor cell helps it evade destruction by the macrophage by overwhelming any
activating eat signals.

Our lead program, TTI-621, is a novel SIRPαFc fusion protein
that harnesses the innate immune system by blocking the activity of CD47.
TTI-621 is a protein that consists of the CD47-binding domain of human SIRPα
linked to the Fc region of IgG1. It is designed to act as a soluble decoy
receptor, preventing CD47 from delivering its inhibitory signal. Neutralization
of the inhibitory CD47 signal enables the activation of macrophage anti-tumor
effects by the pro-phagocytic eat signals. The IgG1 Fc region of TTI-621 may
also assist in the activation of macrophages by engaging Fc receptors. A second
SIRPαFc fusion protein, TTI-622, is entering Phase I in the first half of 2018.
TTI-622 consists of the same CD47-binding domain of human SIRPα and is linked to
the Fc region of IgG4. The IgG4 Fc region of TTI-622 is expected to have a
decreased ability to engage activating Fc receptors compared to an IgG1 Fc.

In addition to their direct anti-tumor activity, macrophages
can also function as antigen-presenting cells and stimulate antigen-specific T
cells. Thus it is possible that increasing tumor cell phagocytosis after SIRPαFc
exposure may result in enhanced adaptive immunity. In support of this, CD47
antibody blockade has been recently shown to augment antigen presentation and
prime an anti-tumor cytotoxic T cell response in immune-competent mice. In 2016,
we presented data demonstrating that TTI-621 can augment antigen-specific T cell
responses in vitro. CD47 blockade has also been reported to promote
tumor-specific T cell responses through a dendritic cell-based mechanism,
although the effect of SIRPαFc on dendritic cells is currently unknown.

The figure below illustrates how SIRPαFc blocks the CD47 do
not eat signal and engages activating Fc receptors on macrophages, leading to
tumor cell phagocytosis, increased antigen presentation and enhanced T cell
responses.

7

---



By inhibiting the CD47 do not eat signal, 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. Both SIRPαFc fusion proteins enable CD47 blockade with
different levels of Fc receptor engagement on macrophages and thus may find
unique applications.

We believe that SIRPαFc has broad clinical potential in both
hematological and solid tumors. High expression of the CD47 do not eat signal
on tumor cells has been observed in acute myeloid leukemia, or AML,
myelodysplastic syndrome, or MDS, chronic myeloid leukemia, or CML, acute
lymphoblastic leukemia, or ALL, diffuse large B cell lymphoma, or DLBCL, chronic
lymphocytic leukemia, or CLL, follicular lymphoma, mantle cell lymphoma,
marginal zone lymphoma, multiple myeloma and in solid tumors including: bladder,
brain, breast, colon, leiomyosarcoma, liver, melanoma, ovarian and prostate. In
a number of these cancers high CD47 expression was shown to have negative
clinical consequences, correlating with more aggressive disease and poor
survival. In normal karyotype AML patients, for example, high CD47 expression
was correlated with worse event-free survival (6.8 vs. 17.1 months) and worse
overall survival (9.1 vs. 22.1 months) compared to low CD47 expression. These
data are consistent with CD47 providing a survival advantage to tumor cells.

In vitro studies with primary tumor samples obtained from AML,
MDS, multiple myeloma, B cell-ALL and T cell-ALL demonstrated that SIRPαFc
frequently triggered significant macrophage-mediated tumor cell phagocytosis
compared to control treatment. Similar results were observed with tumor cell
lines established from patients with B cell lymphoma and CML.

In vivo studies have demonstrated that TTI-621 exhibits
anti-tumor activity in xenograft models of AML, Burkitt lymphoma and DLBCL.
These results are supported by numerous studies demonstrating that antibody
blockade of CD47 has activity against a range of tumor xenografts.

8

---

SIRPαFc Key Attributes

| |  | Potential efficacy in a broad range of
      cancers. SIRPαFc blocks the tumors ability to transmit a do not
      eat signal allowing macrophages to destroy tumor cells; a mechanism that
      we believe could have broad applicability.      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                      
| |  | Potential for use as a monotherapy and in
      combination with other therapies. We intend to develop our
      products as monotherapies as well as potentially for use in combination
      with other cancer immuno-therapies.                   
| |   |                                                                                                                                                                                                                                                      
| |  | May enhance both innate and adaptive immune
      response. SIRPαFc may enhance stimulation of tumor attacking T
      cells since macrophages, in addition to their role in phagocytosis, can
      also prime T cells through antigen presentation.

SIRPαFc Clinical Development
 TTI-621

We are enrolling patients with advanced hematologic
malignancies in a Phase Ib clinical trial. This two-part clinical trial was
designed as a multi-center, open-label Phase Ia/Ib trial, evaluating TTI-621 as
a single agent in patients with relapsed or refractory hematologic malignancies.
During the dose escalation phase the safety, tolerability, pharmacokinetics and
pharmacodynamics were characterized to determine the optimal dose for subsequent
enrollment in the expansion phase. To characterize potential changes in
hematologic parameters that might occur with blockade of CD47, the dose
escalation portion of the Phase I trial included lymphoma patients with
relatively normal hematologic parameters and acceptable marrow function. In
November 2016, a reasonably well-tolerated dose and schedule of SIRPαFc was
established in the dose escalation phase, and now, safety and antitumor activity
are being examined in expansion cohorts with advanced hematologic malignancies
including indolent B cell lymphoma, aggressive B cell lymphoma, T cell lymphoma,
Hodgkin lymphoma, CLL, multiple myeloma, AML, B cell-ALL, T cell-ALL, MDS and
myeloproliferative neoplasms. We also have a solid tumor cohort of small cell
lung cancer patients being treated with monotherapy. In two combination drug
cohorts, TTI-621 is being administered in combination with rituximab for
patients with CD20-positive lymphomas, and in combination with the PD-1
checkpoint inhibitor nivolumab in patients with Hodgkin lymphoma.

Data from the ongoing expansion phase were reported at the
American Society of Hematology 59th Annual Meeting in December 2017.
Weekly infusions of TTI-621 were shown to be well tolerated, and notably,
transient thrombocytopenia was attenuated after the first dose. These data,
combined with the previously reported results from the dose escalation phase,
demonstrate a favorable safety profile of intravenous TTI-621 in over 100
patients. Intravenous administration of TTI-621, particularly in combination
with rituximab, resulted in objective responses in 5 out of 18 evaluable
patients with heavily pre-treated, relapsed/refractory DLBCL, and several others
experienced prolonged progression-free intervals. Furthermore, preliminary
experience indicates that patients can be safely dose intensified beyond 0.2
mg/kg.

In our second multi-center, open-label Phase I trial, TTI-621
is being delivered by intratumoral injection in patients with relapsed and
refractory, percutaneously-accessible cancers. In the escalation phase, patients
were enrolled in sequential dose cohorts to receive intratumoral injections of
TTI-621 that increase in dose and dosing frequency to characterize safety,
pharmacokinetics, pharmacodynamics and preliminary evidence of antitumor
activity. In addition, detailed evaluation of serial, on-treatment tumor
biopsies of both injected and non-injected cancer lesions will help characterize
tumor microenvironment changes anticipated with CD47 blockade. Preliminary data
from the escalation phase were reported the American Society of Hematology
59th Annual Meeting in December 2017. Intratumoral injection was well
tolerated, with no dose-limiting toxicity observed. A rapid reduction in CAILS
scores, which measures local lesion responses, was observed in 9 out of 10
mycosis fungoides patients and a reduction in circulating leukemic Sézary cells
was observed in 3 out of 3 patients. Several patient profiles were presented
which demonstrate clinical responses in disfiguring lesions, in some cases after
a single dose of TTI-621. Collectively, the data demonstrate that cutaneous
T-cell lymphoma (CTCL) appears biologically responsive to intratumoral
injections of TTI-621. Patients are currently being enrolled in the expansion
phase of the trial in which they receive 10 mg TTI-621 three times per week for
two weeks followed by weekly dosing, to further characterize safety and efficacy. In addition, patients may receive
intratumoral TTI-621 in combination with other anti-cancer therapies (anti-PD-1
or anti-PD-L1, pegylated interferon α2a, talimogene laherparepvec or
radiation).

9

---

SIRPαFc Clinical Development
 TTI-622

A second SIRPαFc fusion protein, TTI-622, is in preclinical
development. TTI-622 consists of the same extracellular CD47-binding domain of
human SIRPα as TTI-621 but has a different Fc region (IgG4 Fc instead of IgG1
Fc) and is thus anticipated to have a different pharmacologic profile and enable
greater exposures in patients than TTI-621. TTI-622 does not bind RBCs, like
TTI-621, and we believe that this property could give TTI-622 best-in-class
status among IgG4-based blocking agents currently in development. We plan to
begin recruiting patients into a Phase I clinical trial in the first half of
2018, with the goal of rapidly advancing this agent into combination studies.

SIRPαFc
Competition

There are a number of companies developing blocking agents to
the CD47-SIRPα axis, which can be broadly classified into four groups:

| |  | CD47-specific antibodies:
      Forty-Seven Inc. (Phase I), Celgene Corporation (Phase I), Surface
  Oncology (preclinical) and Arch Oncology (preclinical)
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | CD47 bispecific antibodies:
      Novimmune SA (CD47/CD19 bispecific antibody, preclinical) and Hummingbird
  BioSciences (preclinical)                    
| |  | Mutated high affinity
      SIRPαFc: Alexo Therapeutics (Phase I)                                                                                          
| |  | SIRPα-specific
      antibody: OSE Immunotherapeutics (preclinical)                                                                                        

We believe that our SIRPαFc fusion proteins have several
advantages over competitor products, which are summarized in the table
below.

Competitor Class
    Potential Advantages of Trilliums
      SIRPαFcsCD47-specific antibody
    Trilliums SIRPαFcs do not bind RBCs.IgG1 isotype of TTI-621 may confer greater potency than IgG4-based
    antibodies.CD47 bispecific antibody
    Bispecific is limited to tumors that express both target
      antigens. SIRPαFc may have more broad applicability.Mutated high affinity SIRPαFc (inactive Fc)
    Our SIRPαFcs do not bind RBCs.Our SIRPαFc fusion proteins, which are based on wild type sequences,
      are less likely to be immunogenic than mutated SIRPα.IgG1 isotype of
      TTI-621 and IgG4 isotype of TTI-622 may confer greater potency than
      mutated SIRPα linked to an inactive Fc.SIRPα-specific antibody
    SIRPα-specific antibodies bind macrophages and generally
      do not bind tumors. We believe that targeting the tumor cell directly
      using SIRPαFc is more likely to generate effective anti-tumor
responses.


We have demonstrated that our SIRPαFc fusion proteins exhibit
minimal binding to RBCs in contrast to CD47-specific antibodies and a mutated
high affinity SIRPαFc. We believe that this property confers several possible
advantages including avoidance of drug-induced anemia, avoidance of the antigen
sink effect (i.e., removal of drug from circulation by RBCs) and
non-interference with laboratory blood typing tests. It should be noted that
TTI-622 shares the same CD47-binding domain as TTI-621 and preclinical studies
have shown that it also exhibits minimal binding to human RBCs. Thus, we anticipate that
TTI-622, like TTI-621, will not induce anemia in patients.

10

---

Combination Therapy

We believe that SIRPαFc enhancement of macrophage activity, and
possibly T cell responses, could be synergistic with other immune-mediated
therapies. Published studies conducted by third parties provide evidence that
SIRPαFc may be useful in combination with approved anti-cancer antibodies (e.g.
Rituxan®, Herceptin®, Campath®, and Erbitux®). Since many cancer antibodies work
at least in part by activating cells of the innate immune system, it may be
possible to enhance the potency of these agents by blocking the negative do not
eat CD47 signal that tumor cells deliver to macrophages. We hypothesize that
SIRPαFc may act synergistically with other immunological agents, including T
cell checkpoint inhibitors (e.g. pembrolizumab and nivolumab), cancer vaccines,
oncolytic viruses or chimeric antigen receptor, or CAR T cells.

Fluorine Chemistry Platform

Our medicinal chemistry platform uses proprietary
fluorine-based chemistry to modify specific properties of validated drug
candidates to yield new chemical entities. We believe the potency and/or safety
of both existing pharmacophores and historically inaccessible chemical
structures may be enhanced using our technology. This chemistry platform has
been utilized to establish two preclinical programs, an EGFR inhibitor and a
bromodomain and extra-terminal, or BET bromodomain inhibitor, and a number of
compounds directed at undisclosed immuno-oncology targets are currently in the
discovery phase.

EGFR Inhibitor (TTI-2341)

A combination of molecular design, novel fluorine-based
chemical synthesis, and extensive biological testing led to the identification
of TTI-2341, a novel brain-penetrant, second generation, covalent EGFR
inhibitor. EGFR is a validated drug target in oncology but the use of EGFR
inhibitors has been limited by two factors. First, toxicities can arise from
indiscriminate reactivity with off-target proteins. Second, the low central
nervous system, or CNS penetration of existing EGFR inhibitors limits their use
for CNS indications such as glioblastoma multiforme and brain metastasis from
lung cancer. The incorporation of fluorine into small molecules is known to
minimize the formation of highly reactive metabolites and improve blood brain
barrier, or BBB penetration and thus this strategy has the potential to overcome
the major limitations of existing EGFR inhibitors.

We have benchmarked TTI-2341 against a second- and
third-generation EGFR inhibitor (both approved for the treatment of non-small
cell lung cancer). This comparison included measurements of BBB penetration, as
well as retention and the ratio of free to bound drug in the brain. We are
currently evaluating different options for TTI-2341 development, including
possible partnerships.

BET Bromodomain Inhibitor (TTI-281)

Bromodomains recognize and bind to DNA-associated proteins that
have been epigenetically modified. These epigenetic readers act as scaffolds
for the recruitment of proteins involved in the initiation of gene expression.
Bromodomain-containing proteins regulate genes that play roles in proliferation,
cell cycle progression and apoptosis. Members of the BET subfamily have been
implicated in controlling the transcription of c-Myc, a proto-oncogene that
contributes to the pathogenesis of many cancers but has proven to be difficult
to target pharmacologically.

TTI-281 selectively binds the BET proteins BRD2, BRD3 and BRD4
and is two- to six-fold more potent than a leading bromodomain inhibitor. It is
strongly cytotoxic to AML cells but not to normal hematopoietic cells, and
reversibly suppresses the expression of c-Myc. TTI-281 has demonstrated oral
efficacy in xenograft models of human leukemia and myeloma. We have completed
our planned preclinical development program for TTI-281. We believe that TTI-281
represents a unique opportunity to reduce the expression of c-Myc, and are
seeking a partner for further development of TTI-281.

11

---

Other Developments

Acquisition of Fluorinov

On January 26, 2016, we acquired all the outstanding shares of
Fluorinov, a privately-held oncology company with a proprietary medicinal
chemistry platform using unique fluorine chemistry, which permits the creation
of new chemical entities from validated drugs and drug candidates with improved
pharmacological properties, potentially leading to increased safety and
efficacy. We expect Fluorinovs fluorine-based chemistry platform will provide
us with an internal drug discovery engine. Fluorinovs preclinical pipeline of
oncology assets include orally-available bromodomain and proteasome inhibitors,
and EGFR antagonists with increased uptake in the brain.

We anticipate that future cancer treatments will be dominated
by combination therapies that may often involve combining biologics and small
molecules. The acquisition of our own small molecule platform with opportunity
for oral drug delivery may provide us with new drug candidates that we may
either develop in-house or out-license. According to Wang et al. Chem Rev. 2014,
114 (4), approximately 25% of all marketed drugs contain fluorine. The benefits
of fluorine include blocking sites of metabolism to increase drug half-life and
reduce toxicity, lipophilicity that improves oral absorption and BBB
penetration, and electronegativity that alters chemical properties to improve
binding and potency. We believe that the Fluorinov acquisition reduces the risks
to which we are subject and diversifies us for the longer term.

The upfront consideration for Fluorinov was $10,000 less the
working capital deficiency of $134. We may also incur up to $35,000 of future
payments contingent on us achieving certain clinical and regulatory milestones
with an existing Fluorinov compound. The amount of contingent consideration
recognized by us as of the acquisition date was $1,750 and has been classified
as other liabilities on the consolidated statement of financial position. The
fair value of the contingent consideration was calculated using a discounted
cash flow approach, where a risk-adjusted discount rate was applied to future
cash flows. We also have an obligation to pay royalty payments on future sales
of such compounds.

At our discretion, up to 50% of the future contingent payments
can be satisfied through the issuance of our common shares, provided that the
aggregate number of common shares issuable under such payments will not exceed
1,558,447 common shares unless shareholder approval has first been obtained. In
addition, any such future share issuance remains subject to final approval from
our board of directors and receipt of any requisite approvals under the
applicable rules of the TSX and NASDAQ. We have also committed to use
commercially reasonable efforts to monetize Fluorinovs CNS assets and share 50%
of the net proceeds with Fluorinov shareholders.

Collaboration with University Health Network and the
Hospital for Sick Children

We entered into a collaboration agreement with University
Health Network, or UHN, and the Hospital for Sick Children, or HSC, to fund and
undertake a research program entitled SIRPαFc: Translating Genomics Research
Into a Novel Cancer Immunotherapy. This project was approved for funding by
Genome Canada under the Genomic Applications Partnership Program. In addition,
The Ontario Ministry of Research and Innovation is supporting the project with a
grant matching Genome Canadas contribution, providing the collaboration with a
3-year budget of approximately $3,400. This matching funding is allowing us to
expand our translational research efforts, focusing primarily on AML. Our
contribution to the overall budget of this program is $886 in cash and $478 in
kind over three years.

Plan of Operations

Our primary focus is the advancement of our Phase I clinical
trial of SIRPαFc in patients with advanced hematologic malignancies and our
Phase I clinical trial in patients with relapsed and refractory,
percutaneously-accessible cancers to identify one or more cohorts of patients
that respond to TTI-621 treatment. We plan further focused clinical development
of promising indications.
We continue to advance our combination treatment strategy incorporating
combination treatment cohorts in our TTI-621 clinical trials and our TTI-622
Phase I trial is on track to begin recruiting patients in the first half of
2018.

12

---

We continue to advance our small molecule program in internal
development and pursue partnering activities.

Intellectual Property

We own or control patent rights covering our key products and
their therapeutic end uses. The patents and patent applications are either
granted or pending in major pharmaceutical markets. In all, the patent estate
includes inventions in three different areas that include SIRPα, CD200, and
modified new chemical entities. These are supported by numerous patents and
applications. In connection specifically with patent coverage for SIRPαFc, we
control two patent families. One family has claims that embrace species of
SIRPαFc found to have certain therapeutic benefits, and their use for the
treatment of cancer. We own these patent rights outright and national patent
filings have been made in the U.S., Europe, Japan, Canada, Australia, China and
India. Patents emerging from this family will expire in 2033. A second SIRPα
patent family was in-licensed on an exclusive basis from co-owners UHN and HSC.
This family has also been filed in major markets. The claims cover the use of
various forms of SIRPα to treat CD47-positive cancers. Patents in this family
begin to expire in the year 2030. We have also filed for
patent protection on combination therapies in which our SIRPαFc drugs are used together with established anti-cancer agents to
provide enhanced effects.

Most recently, our patent estate expanded with the acquisition
of Fluorinov. This estate covers many different inventions in the small molecule
therapeutics field and in a diverse range of medical end-uses. There are claims
for bromodomain inhibitors, EGFR inhibitors and for a generic chemical process
useful to produce the novel classes of small molecule drugs. As well, there are
two patent families relating to proteasome inhibition that have been
nationalized in the US, Canada, Europe and Australia. Most patents in these
families will have patent terms that reach out to 2035 and beyond.

We intend to protect additional intellectual property developed
by us through the filing of patent applications within appropriate jurisdictions
throughout the world.

Regulatory Process

Government authorities in the United States, including federal,
state, and local authorities, and in other countries, extensively regulate,
among other things, the manufacturing, research and clinical development,
marketing, labeling and packaging, storage, distribution, post-approval
monitoring and reporting, advertising and promotion, and export and import of
biological products, such as those we are developing. The process of obtaining
regulatory approvals and the subsequent compliance with appropriate federal,
state, local, and foreign statutes and regulations require the expenditure of
substantial time and financial resources.

Securing final regulatory approval for the manufacture and sale
of biological products in the U.S., Europe, Canada and other commercial
territories, is a long and costly process that is controlled by that particular
territorys regulatory agency. The regulatory agency in the U.S. is the U.S.
Food and Drug Administration, or FDA, in Canada it is Health Canada, or HC, and
in Europe it is the European Medicines Agency. Other regulatory agencies have
similar regulatory approval processes, but each regulatory agency has its own
approval processes. Approval in the U.S., Canada or Europe does not assure
approval by other regulatory agencies, although often test results from one
country may be used in applications for regulatory approval in another country.

None of our products have been completely developed or tested
and, therefore, we are not yet in a position to seek final regulatory approval
to market any of our products. The time required to obtain approval by such
regulatory authorities is unpredictable but typically takes many years following
the commencement of preclinical studies and clinical trials and will require
significant additional capital.See Risk Factors - Risks Related to our
Business and our Industry below.

13

---

U.S. Government Regulation

In the U.S., the FDA regulates drugs under the Federal Food,
Drug, and Cosmetic Act, or FDCA, and its implementing regulations, and biologics
under the FDCA and the Public Health Service Act, or PHSA, and its implementing
regulations. FDA approval is required before any new unapproved drug or biologic
or dosage form, including a new use of a previously approved drug, can be
marketed in the United States. Drugs and biologics are also subject to other
federal, state, and local statutes and regulations. If we fail to comply with
applicable FDA or other requirements at any time during the product development
process, clinical testing, the approval process or after approval, we may become
subject to administrative or judicial sanctions. These sanctions could include
the FDAs refusal to approve pending applications, license suspension or
revocation, withdrawal of an approval, warning letters, product recalls, product
seizures, total or partial suspension of production or distribution, civil
monetary penalties or criminal prosecution. Any FDA enforcement action could
have a material adverse effect on us.

The process required by the FDA before product candidates may
be marketed in the United States generally involves the following:

| |  | completion of extensive preclinical laboratory tests and
      preclinical animal studies, all performed in accordance with the Good
      Laboratory Practices regulations;                                         
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | submission to the FDA of an investigational new drug
      application, or IND, which must become effective before human clinical
      trials may begin and must be updated annually;                               
| |  | approval by an independent institutional review board, or
      IRB, or ethics committee representing each clinical site before each
      clinical trial may be initiated;                                          
| |  | performance of adequate and well-controlled human
      clinical trials to establish the safety and efficacy of the product
      candidate for each proposed indication;                                            
| |  | preparation of and submission to the FDA of a new drug
      application, or NDA, or biologics license application, or BLA, after
      completion of all pivotal clinical trials;                                   
| |  | potential review of the product application by an FDA
      advisory committee, where appropriate and if applicable;                                                                                                 
| |  | a determination by the FDA within 60 days of its receipt
      of an NDA or BLA to file the application for review;                                                                                                  
| |  | satisfactory completion of an FDA pre-approval inspection
      of the manufacturing facilities where the proposed product is produced to
      assess compliance with current Good Manufacturing Practices, or cGMP;
| |  | a potential FDA audit of the preclinical research and
      clinical trial sites that generated the data in support of the NDA or BLA;
      and                                                                     
| |  | FDA review and approval of an NDA or BLA prior to any
      commercial marketing or sale of the product in the U.S.                                                                                                  

The preclinical research and clinical testing and approval
process require substantial time, effort, and financial resources, and we cannot
be certain that any approvals for our product candidates will be granted on a
timely basis, if at all.

An IND is a request for authorization from the FDA to
administer an investigational new drug product to humans in clinical trials. The
central focus of an IND submission is on the general investigational plan and
the protocol(s) for human clinical trials. The IND also includes results of
animal studies assessing the toxicology, pharmacokinetics, pharmacology, and
pharmacodynamic characteristics of the product; chemistry, manufacturing, and
controls information; and any available human data or literature to support the
use of the investigational new drug. An IND must become effective before human
clinical trials may begin. An IND will automatically become effective 30 days
after receipt by the FDA, unless before that time the FDA raises concerns or
questions related to the proposed clinical trials. In such a case, the IND may
be placed on clinical hold and the IND sponsor and the FDA must resolve any
outstanding concerns or questions before clinical trials can begin. Accordingly,
submission of an IND may or may not result in the FDA allowing clinical trials
to commence.

14

---

Clinical Trials

Clinical trials involve the administration of the
investigational new drug to human subjects under the supervision of qualified
investigators in accordance with Good Clinical Practices, or GCPs, which include
the requirement that all research subjects provide their informed consent for
their participation in any clinical trial. Clinical trials are conducted under
protocols detailing, among other things, the objectives of the study, the
parameters to be used in monitoring safety, and the efficacy criteria to be
evaluated. A protocol for each clinical trial and any subsequent protocol
amendments must be submitted to the FDA as part of the IND. Additionally,
approval must also be obtained from each clinical trial sites IRB or ethics
committee, before the trials may be initiated, and the IRB or ethics committee
must monitor the trial until completed. There are also requirements governing
the reporting of ongoing clinical trials and clinical trial results to public
registries.

The clinical investigation of a drug is generally divided into
three or four phases. Although the phases are usually conducted sequentially,
they may overlap or be combined.

| |  | Phase I. The drug is initially introduced into
      healthy human subjects or patients with the target disease or condition.
      These studies are designed to evaluate the safety, dosage tolerance,
      metabolism and pharmacologic actions of the investigational new drug in
      humans, the side effects associated with increasing doses, and if
      possible, to gain early evidence on effectiveness.               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Phase II. The drug is administered to a limited
      patient population to evaluate dosage tolerance and optimal dosage,
      identify possible adverse side effects and safety risks, and preliminarily
      evaluate efficacy.                                                                                                                                                                                                   
| |  | Phase III. The drug is administered to an expanded
      patient population, generally at geographically dispersed clinical trial
      sites to generate enough data to statistically evaluate dosage, clinical
      effectiveness and safety, to establish the overall benefit-risk
      relationship of the investigational new drug product, and to provide an
      adequate basis for physician labeling.                     
| |  | Phase IV. In some cases, the FDA may condition
      approval of an NDA or BLA for a product candidate on the sponsors
      agreement to conduct additional clinical trials after approval. In other
      cases, a sponsor may voluntarily conduct additional clinical trials after
      approval to gain more information about the drug. Such post-approval
      studies are typically referred to as phase IV clinical trials.

Clinical trial sponsors must also report to the FDA, within
certain timeframes, serious and unexpected adverse reactions, any clinically
important increase in the rate of a serious suspected adverse reaction over that
listed in the protocol or investigators brochure, or any findings from other
studies or animal testing that suggest a significant risk in humans exposed to
the product candidate. The FDA, the IRB or ethics committee, or the clinical
trial sponsor may suspend or terminate a clinical trial at any time on various
grounds, including a finding that the research subjects are being exposed to an
unacceptable health risk. Additionally, some clinical trials are overseen by an
independent group of qualified experts organized by the clinical trial sponsor,
known as a data safety monitoring board or committee. This group provides
authorization for whether or not a trial may move forward at designated check
points based on access to certain data from the trial.

The clinical trial process can take years to complete, and
there can be no assurance that the data collected will support FDA approval or
licensure of the product. Results from one trial are not necessarily predictive
of results from later trials. We may also suspend or terminate a clinical trial
based on evolving business objectives and/or competitive climate.

Submission of an NDA or BLA to the FDA

Assuming successful completion of all required preclinical
studies and clinical testing in accordance with all applicable regulatory
requirements, detailed investigational new drug product information is submitted
to the FDA in the form of an NDA or BLA requesting approval to market the
product for one or more indications. Under federal law, the submission of most
NDAs and BLAs is subject to an application user fee. For fiscal year 2017, the
application user fee exceeds $2,038, and the sponsor of an approved NDA or BLA
is also subject to annual product and establishment user fees, set at $98 per
product and $512 per establishment. These fees are typically increased annually.
Applications for orphan drug products are exempted from the NDA and BLA
application user fee, unless the application includes an indication for other than a rare
disease or condition, and may be exempted from product and establishment user
fees under certain conditions.

15

---

An NDA or BLA must include all relevant data available from
pertinent preclinical studies and clinical trials, including negative or
ambiguous results as well as positive findings, together with detailed
information relating to the products chemistry, manufacturing, controls, and
proposed labeling, among other things. Data comes from company-sponsored
clinical trials intended to test the safety and effectiveness of a use of a
product, and may also come from a number of alternative sources, including
trials initiated by investigators. To support marketing approval, the data
submitted must be sufficient in quality and quantity to establish the safety and
effectiveness of the investigational new drug product to the satisfaction of the
FDA.

Once an NDA or BLA has been submitted, the FDAs goal is to
review the application within ten months after it accepts the application for
filing, or, if the application relates to an unmet medical need in a serious or
life-threatening indication, six months after the FDA accepts the application
for filing. The review process is often significantly extended by the FDAs
requests for additional information or clarification.

Before approving an NDA or BLA, the FDA typically will inspect
the facility or facilities where the product is manufactured. The FDA will not
approve an application unless it determines that the manufacturing processes and
facilities are in compliance with cGMP requirements and adequate to assure
consistent production of the product within required specifications.
Additionally, before approving an NDA or BLA, the FDA will typically inspect one
or more clinical sites to assure compliance with GCP.

The FDA is required to refer an NDA or BLA for a novel drug (in
which no active ingredient has been approved in any other application) to an
advisory committee or explain why such referral was not made. Typically, an
advisory committee is a panel of independent experts, including clinicians and
other scientific experts, that reviews, evaluates and provides a recommendation
as to whether the application should be approved and under what conditions. The
FDA is not bound by the recommendations of an advisory committee, but it
considers such recommendations carefully when making decisions.

The FDAs Decision on an NDA or BLA

After the FDA evaluates the NDA or BLA and conducts inspections
of manufacturing facilities where the product will be produced, the FDA will
issue either an approval letter or a Complete Response Letter. An approval
letter authorizes commercial marketing of the drug with specific prescribing
information for specific indications. A Complete Response Letter indicates that
the review cycle of the application is complete and the application is not ready
for approval. In order to satisfy deficiencies identified in a Complete Response
Letter, additional clinical data and/or an additional phase III clinical
trial(s), and/or other significant, expensive and time-consuming requirements
related to clinical trials, preclinical studies or manufacturing may be required
for the product candidate. Even if such additional information is submitted, the
FDA may ultimately decide that the NDA or BLA does not satisfy the criteria for
approval. The FDA could also approve the NDA or BLA with a risk evaluation and
mitigation strategy, plan to mitigate risks, which could include medication
guides, physician communication plans, or elements to assure safe use, such as
restricted distribution methods, patient registries and other risk minimization
tools. The FDA also may condition approval on, among other things, changes to
proposed labeling, development of adequate controls and specifications, or a
commitment to conduct one or more post-market studies or clinical trials. Such
post-market testing may include phase IV clinical trials and surveillance to
further assess and monitor the products safety and effectiveness after
commercialization. New government requirements, including those resulting from
new legislation, may be established, or the FDAs policies may change, which
could delay or prevent regulatory approval of our products under development.

Patent Term Restoration

Depending upon the timing, duration, and specifics of the FDA
approval of the use of our product candidates, some of our U.S. patents may be
eligible for limited patent term extension under the Drug Price Competition and
Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman
Amendments. The Hatch-Waxman Amendments permit a patent restoration term of up
to five years as compensation for patent term lost during product development
and the FDA regulatory review process. However, patent term restoration cannot
extend the remaining term of a patent beyond a total of 14 years from the products
approval date. The patent term restoration period is generally one-half the time
between the effective date of an IND and the submission date of an NDA or BLA,
plus the time between the submission date and the approval of that application.
Only one patent applicable to an approved product is eligible for the extension
and the application for the extension must be submitted prior to the expiration
of the patent and within 60 days of the products approval. The U.S. Patent and
Trademark Office, in consultation with the FDA, reviews and approves the
application for any patent term extension or restoration. In the future, we may
apply for restoration of patent term for one of our currently owned or licensed
patents to add patent life beyond its current expiration date, depending on the
expected length of the clinical trials and other factors involved in the filing
of the relevant NDA or BLA.

16

---

Companion Diagnostics

In its August 6, 2014, guidance document entitled In Vitro
Companion Diagnostic Devices, the FDA defines an IVD companion diagnostic
device to be an in vitro diagnostic device that provides information that is
essential for the safe and effective use of a corresponding therapeutic product.
Use of an IVD companion diagnostic device is considered essential when its use
is required in the labeling of a therapeutic product, for example, to select
appropriate patients for a product or those who should not use the product, or
to monitor patients to achieve safety or effectiveness. In most circumstances,
the IVD companion diagnostic device should be approved or cleared by FDA under
the device authorities of the FDCA contemporaneously with the therapeutic
products approval under section 505 of the FDCA for a drug or section 351 of
the PHSA for a biological product. FDA expects the therapeutic product sponsor
to address the need for an approved or cleared IVD companion diagnostic device
in its therapeutic product development plan. The therapeutic product sponsor may
develop its own IVD companion diagnostic device, partner with a diagnostic
device sponsor to develop an IVD companion diagnostic device, or explore
modifying an existing IVD diagnostic device to develop a new intended use. The
FDA explains if a diagnostic device and a therapeutic device are studied
together to support their respective approvals, both products can be studied in
the same investigational study that meets both the requirements of the
Investigational Device Exemption, or IDE, regulations and the IND regulations.
Depending on the study plan and participants, a sponsor may seek to submit an
IND alone, or both an IND and IDE.

Raw Materials, Manufacturing, and Supply

We have limited experience in manufacturing products for
clinical or commercial purposes. We produce small quantities of our products in
our laboratories for internal use. We believe that sources of raw materials
pertinent to our laboratory operations and for manufacturing of our products by
a CMO are generally available.

We have established a contract manufacturing relationship for
the supply of SIRPαFc that we believe will provide sufficient material for
clinical trials. However, there can be no assurance that our
contract manufacturer will be successful at scaling up and producing our product
with the required quality and in the quantities and timelines that we will need
for clinical and/or commercial purposes.

We expect to similarly rely on contract manufacturing
relationships for any products that we may further develop, or in-license or
acquire in the future. However, there can be no assurance that we will be able
to successfully contract with such manufacturers on terms acceptable to us, or
at all.

Contract manufacturers are subject to ongoing periodic and
unannounced inspections by the FDA, the U.S. Drug Enforcement Administration and
corresponding state agencies to ensure strict compliance with cGMP and other
state and federal regulations. We do not have control over third-party
manufacturers compliance with these regulations and standards, other than
through contractual obligations and periodic auditing. If they are deemed out of
compliance with such regulations, approvals could be delayed, product recalls
could result, inventory could be destroyed, production could be stopped and
supplies could be delayed or otherwise disrupted.

If we need to change manufacturers after commercialization, the
FDA and corresponding foreign regulatory agencies must approve these new
manufacturers in advance, which will involve testing and additional inspections
to ensure compliance with FDA regulations and standards and may require
significant lead times and delay, and disruption of supply. Furthermore,
switching manufacturers may be difficult because the number of potential manufacturers is limited. It may be difficult or impossible for
us to find a replacement manufacturer quickly or on terms acceptable to us, or
at all.

17

---

Property, Plant and Equipment

We currently operate from approximately 22,000 square feet of
leased laboratory and office space at 2488 Dunwin Drive, Ontario, Canada, L5L
1J9. We perform research and development in our facility and use qualified
vendors and collaborators to conduct clinical research, research and development
and manufacturing on our behalf. We incur capital expenditures mainly for
leaseholds, laboratory equipment, office equipment, and computer equipment in
the operation of our business. As at December 31, 2017 the net carrying value of
our property and equipment was $2,882.

Employees

As at December 31, 2017, we had fifty-nine full-time employees
including five senior management, forty-eight research and development staff and
six finance and administrative staff. Fifty-seven employees are located at our
head office and lab facilities in Mississauga, Ontario, Canada and two employees
are located at in the United States.

We also use consultants and outside contractors to carry on
many of our activities, including preclinical testing and validation,
formulation, assay development, manufacturing, clinical and regulatory affairs,
toxicology and clinical trials.

Legal Proceedings

To our knowledge, there have not been any legal or arbitration
proceedings, including those relating to bankruptcy, receivership or similar
proceedings, those involving any third party, and governmental proceedings
pending or known to be contemplated, which may have, or have had in the recent
past, significant effect on our financial position or profitability.

Also, to our knowledge, there have been no material proceedings
in which any director, any member of senior management, or any of our affiliates
is either a party adverse to us or any of our subsidiaries or has a material
interest adverse to us or any of our subsidiaries.

GENERAL DEVELOPMENT OF THE BUSINESS  3 YEAR SUMMARY

Acquisition of Fluorinov Pharma Inc.

On January 26, 2016, we acquired all the outstanding shares of
Fluorinov, a privately-held oncology company that has developed a proprietary
medicinal chemistry platform using unique fluorine chemistry. The terms of the
acquisition were an upfront payment of $10,000 plus up to $35,000 of additional
future payments that are contingent on us achieving certain clinical and
regulatory milestones with an existing Fluorinov compound. We will also have an
obligation to pay royalty payments on future sales of such compounds. The
upfront payment was subject to adjustment based on the net working capital of
Fluorinov and other adjustments at the time of closing. At our discretion, up to
50% of the future contingent payments can be satisfied through the issuance of
common shares of Trillium provided that the aggregate number of common shares
issuable under such payments will not exceed 1,558,447 common shares unless
shareholder approval has first been obtained. In addition, any such future share
issuance remains subject to final approval from our board of directors and
receipt of any requisite approvals under the applicable rules of the TSX and
NASDAQ . We have also committed to use commercially reasonable efforts to
monetize Fluorinovs central nervous system, or CNS, assets and share 50% of the
net proceeds with Fluorinov shareholders.

Agreements with Catalent Pharma Solutions

In connection with our development of SIRPαFc, we entered into
two agreements on August 12, 2014 with Catalent pursuant to which we acquired
the right to use two of Catalents proprietary GPEx® expression cell lines for
the manufacture of SIRPαFc. One agreement relates to the manufacture of TTI-621
and the other agreement relates to the manufacture of TTI-622. In consideration for the purchase
of the expression cell lines, each agreement provides that we will pay Catalent
up to US$875 upon reaching certain pre-marketing approval milestones and up to
an additional US$28,750 for reaching certain sales milestones. We will also pay
Catalent an annual product maintenance fee until the first product derived from
the expression cell lines receives a regulatory approval other than a pricing
approval.

18

---

Under the Catalent agreements, we may use the two expression
cell lines to secure such regulatory approvals and to develop, test, market and
otherwise commercially exploit products originating from the cell lines. We may
transfer the expression cell lines to a third party contract manufacturer who
may utilize the cell lines in a similar fashion. We, or a third-party, cannot
use or modify the cell lines, or any portions of the cell lines, to create a new
cell line.

We plan to further develop the expression cell lines for use in our
  pre-IND toxicology and pharmacology studies, as well as to supply our phase I
  clinical trial. We will be required to indemnify Catalent for any costs Catalent
  incurs related to regulatory filings and related claims or proceedings, for the
  conduct of any clinical trials and for any manufacture, packaging, sale,
  promotion, distribution, use of or exposure to the expression cell lines or
  products. As a result of this risk, we are obligated to maintain several
  designated insurance policies throughout the term of the agreements.

We may terminate the agreements upon 90 days written notice to
Catalent, upon their bankruptcy or upon their material breach and failure to
cure within 30 days. Similarly, Catalent may terminate the agreements upon our
bankruptcy or upon our material breach and failure to cure within 30 days. If
our material breach is for nonpayment, however, we will only have 10 days to
cure before Catalent may terminate the agreement.

Financings

See details of our financings completed over the past three
years under Description of Share Capital below.

Capital Markets

We are listed on the TSX and NASDAQ under the symbol TRIL.

Capital Expenditures

Capital expenditures for 2017 were mainly for laboratory
equipment. Capital expenditures for 2016 were mainly for leasehold improvements
for our new office and laboratory location, laboratory equipment, office
equipment, and information technology equipment. Capital expenditures in the
years ended December 31, 2017 and 2016 are set out in the following table.

|                     |   | Year ended December
      31, | 
|-------------------- | - | ----------------------------- | 
|                     |   | 2017                          | 
|Capital expenditures | $ | 471                           | 

Trend Information

Historical patterns of expenditures cannot be taken as an
indication of future expenditures. The amount and timing of expenditures and
therefore liquidity and capital resources vary substantially from period to
period depending on the number of research and development programs being
undertaken at any one time, the stage of the development programs, the timing of
significant expenditures for manufacturing, toxicology and pharmacology studies
and clinical trials, and the availability of funding from investors and
prospective commercial partners.

19

---

RISK FACTORS

An investment in our common shares involves a high degree of
risk and should be considered speculative. An investment in our common shares
should only be undertaken by those persons who can afford the total loss of
their investment. You should carefully consider the risks and uncertainties
described below, as well as other information contained in this AIF. The risks
and uncertainties below are not the only ones we face. Additional risks and
uncertainties not presently known to us or that we believe to be immaterial may
also adversely affect our business. If any of the following risks occur, our
business, financial condition and results of operations could be seriously
harmed and you could lose all or part of your investment. Further, if we fail to
meet the expectations of the public market in any given period, the market price
of our common shares could decline. We operate in a highly competitive
environment that involves significant risks and uncertainties, some of which are
outside of our control.

Risks Related to Our Financial Position and Need for
Additional Capital

We expect to incur future losses and we may never become
profitable.

We have incurred losses of $45,088, $31,733 and $14,734 for the
years ended December 31, 2017, 2016, and 2015, respectively, and expect to incur
an operating loss for the year ending December 31, 2018. We have an accumulated
deficit since inception through December 31, 2017 of $142,111. We believe that
operating losses will continue as we are planning to incur significant costs
associated with the clinical development of SIRPαFc. Our net losses have had and
will continue to have an adverse effect on, among other things, our
shareholders equity, total assets and working capital. We expect that losses
will fluctuate from quarter to quarter and year to year, and that such
fluctuations may be substantial. We cannot predict when we will become
profitable, if at all.

We will require additional capital to finance our
operations, which may not be available to us on acceptable terms, or at all. As
a result, we may not complete the development and commercialization of our
product candidates or develop new product candidates.

As a research and development company, our operations have
consumed substantial amounts of cash since inception. We expect to spend
substantial funds to continue the research, development and testing of our
product candidates and to prepare to commercialize products subject to approval
of the U.S. Food and Drug Administration, or FDA, in the U.S. and similar
approvals in other jurisdictions. We will also require significant additional
funds if we expand the scope of our current clinical plans or if we were to
acquire any new assets and advance their development. Therefore, for the
foreseeable future, we will have to fund all of our operations and development
expenditures from cash on hand, equity or debt financings, through
collaborations with other biotechnology or pharmaceutical companies or through
financings from other sources. We expect that our existing cash and cash
equivalents and marketable securities at December 31, 2017 of $81,791 will
enable us to fund our current operating plan requirements for at least the next
twelve months. Additional financing will be required to meet our long term
liquidity needs. If we do not succeed in raising additional funds on acceptable
terms, we might not be able to complete planned preclinical studies and clinical
trials or pursue and obtain approval of any product candidates from the FDA and
other regulatory authorities. It is possible that future financing will not be
available or, if available, may not be on favorable terms. The availability of
financing will be affected by the achievement of our corporate goals, the
results of scientific and clinical research, the ability to obtain regulatory
approvals, the state of the capital markets generally and with particular
reference to drug development companies, the status of strategic alliance
agreements and other relevant commercial considerations. If adequate funding is
not available, we may be required to delay, reduce or eliminate one or more of
our product development programs, or obtain funds through corporate partners or
others who may require us to relinquish significant rights to product candidates
or obtain funds on less favorable terms than we would otherwise accept. To the
extent that external sources of capital become limited or unavailable or
available on onerous terms, our intangible assets and our ability to continue
our clinical development plans may become impaired, and our assets, liabilities,
business, financial condition and results of operations may be materially or
adversely affected.

We currently have no product revenue and will not be able
to maintain our operations and research and development without additional
funding.

To date, we have generated no product revenue and cannot
predict when and if we will generate product revenue. Our ability to generate
product revenue and ultimately become profitable depends upon our ability, alone
or with partners, to successfully develop our product candidates,
obtain regulatory approval, and commercialize products, including any of our
current product candidates, or other product candidates that we may develop,
in-license or acquire in the future. We do not anticipate generating revenue
from the sale of products for the foreseeable future. We expect our research and
development expenses to increase in connection with our ongoing activities,
particularly as we advance our product candidates through clinical trials.

20

---

We are exposed to the financial risk related to the
fluctuation of foreign exchange rates and the degrees of volatility of those
rates.

We may be adversely affected by foreign currency fluctuations.
To date, we have been primarily funded through issuances of equity, proceeds
from the exercise of warrants and stock options and from interest income on
funds available for investment, which are all denominated both in Canadian and
U.S. dollars. Also, a significant portion of our expenditures are in U.S.
dollars, and we are therefore subject to foreign currency fluctuations which
may, from time to time, impact our financial position and results of
operations.

Risks Related to Our Business and Our Industry

Our prospects depend on the success of our product
candidates which are at early stages of development, and we may not generate
revenue for several years, if at all, from these products.

Given the early stage of our product development, we can make
no assurance that our research and development programs will result in
regulatory approval or commercially viable products. To achieve profitable
operations, we, alone or with others, must successfully develop, gain regulatory
approval, and market our future products. We currently have no products that
have been approved by the FDA, Health Canada, or HC, or any similar regulatory
authority. To obtain regulatory approvals for our product candidates being
developed and to achieve commercial success, clinical trials must demonstrate
that the product candidates are safe for human use and that they demonstrate
efficacy. While we have commenced Phase I trials for SIRPαFc, we have not yet
completed a Phase I clinical trial or subsequent required clinical trials for
any of our product candidates.

Many product candidates never reach the stage of clinical
testing and even those that do have only a small chance of successfully
completing clinical development and gaining regulatory approval. Product
candidates may fail for a number of reasons, including, but not limited to,
being unsafe for human use or due to the failure to provide therapeutic benefits
equal to or better than the standard of treatment at the time of testing.
Unsatisfactory results obtained from a particular study relating to a research
and development program may cause us or our collaborators to abandon commitments
to that program. Positive results of early preclinical research may not be
indicative of the results that will be obtained in later stages of preclinical
or clinical research. Similarly, positive results from early-stage clinical
trials may not be indicative of favorable outcomes in later-stage clinical
trials. We can make no assurance that any future studies, if undertaken, will
yield favorable results.

We acquired several preclinical and discovery research programs
in our acquisition of Fluorinov, including certain assets relating to the
treatment of CNS disorders. While we conducted extensive due diligence before
making this acquisition, our assessment of the Fluorinov technologies may not be
accurate. Therefore, our expectations about whether various clinical and
regulatory milestones with an existing Fluorinov compound or development of a
future program on the Fluorinov development platform will be achieved may not be
borne out fully or at all. We have made a commitment to use commercially
reasonable efforts to monetize the Fluorinov CNS assets and, if successful, to
share the net proceeds with the Fluorinov vendors. As this is not our core
competency, our efforts to monetize these assets or any other Fluorinov assets
may not be successful. We can make no assurances that toxicology, or other
preclinical, studies will yield results that will allow us to proceed with
clinical trials in humans.

The early stage of our product development makes it
particularly uncertain whether any of our product development efforts will prove
to be successful and meet applicable regulatory requirements, and whether any of
our product candidates will receive the requisite regulatory approvals, be
capable of being manufactured at a reasonable cost or be successfully marketed.
If we are successful in developing our current and future product candidates
into approved products, we will still experience many potential obstacles such
as the need to develop or obtain manufacturing, marketing and distribution capabilities. If we are unable to
successfully commercialize any of our products, our financial condition and
results of operations may be materially and adversely affected.

21

---

We rely and will continue to rely on third parties to
plan, conduct and monitor our preclinical studies and clinical trials, and their
failure to perform as required could cause substantial harm to our
business.

We rely and will continue to rely on third parties to conduct a
significant portion of our preclinical and clinical development activities.
Preclinical activities include in vivo studies providing access to specific
disease models, pharmacology and toxicology studies, and assay development.
Clinical development activities include trial design, regulatory submissions,
clinical patient recruitment, clinical trial monitoring, clinical data
management and analysis, safety monitoring and project management. If there is
any dispute or disruption in our relationship with third parties, or if they are
unable to provide quality services in a timely manner and at a feasible cost,
our active development programs will face delays. Further, if any of these third
parties fails to perform as we expect or if their work fails to meet regulatory
requirements, our testing could be delayed, cancelled or rendered
ineffective.

We rely on contract manufacturers over whom we have
limited control. If we are subject to quality, cost or delivery issues with the
preclinical and clinical grade materials supplied by contract manufacturers, our
business operations could suffer significant harm.

We have limited manufacturing experience and rely on contract
manufacturing organizations, or CMOs to manufacture our product candidates for
larger preclinical studies and clinical trials. We produce small quantities of
our product candidates at bench scale in our laboratory facilities for use in
smaller preclinical studies. We rely on CMOs for manufacturing, filling,
packaging, storing and shipping of drug product in compliance with current Good
Manufacturing Practice, or cGMP, regulations applicable to our products. The FDA
ensures the quality of drug products by carefully monitoring drug manufacturers
compliance with cGMP regulations. The cGMP regulations for drugs contain minimum
requirements for the methods, facilities and controls used in manufacturing,
processing and packing of a drug product.

We contracted with Catalent for the manufacture of the SIRPαFc
protein to supply drug substance for our Phase I clinical trials. The
manufacture of recombinant proteins uses well established processes including a
protein expression system. Catalent is producing SIRPαFc using their proprietary
GPEx® expression system. We believe that Catalent has the capacity, the systems,
and the experience to supply SIRPαFc for our Phase I clinical trials and we may
consider using Catalent for manufacturing for later clinical trials. However,
since the Catalent manufacturing facility where SIRPαFc is being produced was
only recently established and does not support commercial manufacturing, it has
not yet been inspected by the FDA. Any manufacturing failures or delays or
compliance issues could cause delays in the conduct of SIRPαFc preclinical
studies and clinical trials.

There can be no assurances that CMOs will be able to meet our
timetable and requirements. We have not contracted with alternate suppliers for
SIRPαFc drug substance production in the event Catalent is unable to scale up
production, or if Catalent otherwise experiences any other significant problems.
If we are unable to arrange for alternative third-party manufacturing sources on
commercially reasonable terms or in a timely manner, we may be delayed in the
development of our product candidates. Further, CMOs must operate in compliance
with cGMP and failure to do so could result in, among other things, the
disruption of product supplies. Our dependence upon third parties for the
manufacture of our products may adversely affect our profit margins and our
ability to develop and deliver products on a timely and competitive basis.

If clinical trials of our product candidates fail to
demonstrate safety and efficacy to the satisfaction of regulatory authorities or
do not otherwise produce positive results, we would incur additional costs or
experience delays in completing, or ultimately be unable to complete, the
development and commercialization of our product candidates.

Before obtaining marketing approval from regulatory authorities
for the sale of our product candidates, we must conduct preclinical studies in
animals and extensive clinical trials in humans to demonstrate the safety and
efficacy of the product candidates. Clinical testing is expensive and difficult
to design and implement, can take many years to complete and has uncertain
outcomes. The outcome of preclinical studies and early clinical trials may not
predict the success of later clinical trials, and interim results of a clinical
trial do not necessarily predict final results. A number of companies in the
pharmaceutical and biotechnology industries have suffered significant setbacks
in advanced clinical trials due to lack of efficacy or unacceptable safety
profiles, notwithstanding promising results in earlier trials. We do not know
whether the clinical trials we may conduct will demonstrate adequate efficacy
and safety to result in regulatory approval to market any of our product
candidates in any jurisdiction. A product candidate may fail for safety or
efficacy reasons at any stage of the testing process. A major risk we face is
the possibility that none of our product candidates under development will
successfully gain market approval from the FDA or other regulatory authorities,
resulting in us being unable to derive any commercial revenue from them after
investing significant amounts of capital in multiple stages of preclinical and
clinical testing.

22

---

If we experience delays in clinical testing, we will be
delayed in commercializing our product candidates, and our business may be
substantially harmed.

We cannot predict whether any clinical trials will begin as
planned, will need to be restructured, or will be completed on schedule, or at
all. Our product development costs will increase if we experience delays in
clinical testing. Significant clinical trial delays could shorten any periods
during which we may have the exclusive right to commercialize our product
candidates or allow our competitors to bring products to market before us, which
would impair our ability to successfully commercialize our product candidates
and may harm our financial condition, results of operations and prospects. The
commencement and completion of clinical trials for our products may be delayed
for a number of reasons, including delays related, but not limited, to:

| |  | failure by regulatory authorities to grant permission to
      proceed or placing the clinical trial on hold;                                                                                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | patients failing to enroll or remain in our trials at the
      rate we expect;                                                                                                                                                                                                                                                                        
| |  | suspension or termination of clinical trials by
      regulators for many reasons, including concerns about patient safety or
      failure of our CMOs to comply with cGMP requirements;                                                                                                                                                              
| |  | any changes to our manufacturing process that may be
      necessary or desired;                                                                                                                                                                                                                                                                       
| |  | delays or failure to obtain clinical supply from CMOs of
      our products necessary to conduct clinical trials;                                                                                                                                                                                                                                      
| |  | product candidates demonstrating a lack of safety or
      efficacy during clinical trials;                                                                                                                                                                                                                                                            
| |  | patients choosing an alternative treatment for the
      indications for which we are developing any of our product candidates or
      participating in competing clinical trials;                                                                                                                                                                    
| |  | patients failing to complete clinical trials due to
      dissatisfaction with the treatment, side effects or other reasons;                                                                                                                                                                                                                           
| |  | reports of clinical testing on similar technologies and
      products raising safety and/or efficacy concerns;                                                                                                                                                                                                                                        
| |  | competing clinical trials and scheduling conflicts with
      participating clinicians;                                                                                                                                                                                                                                                                
| |  | clinical investigators not performing our clinical trials
      on their anticipated schedule, dropping out of a trial, or employing
      methods not consistent with the clinical trial protocol, regulatory
      requirements or other third parties not performing data collection and
      analysis in a timely or accurate manner;             
| |  | failure of our contract research organizations, or CROs,
      to satisfy their contractual duties or meet expected deadlines;                                                                                                                                                                                                                         
| |  | inspections of clinical trial sites by regulatory
      authorities or Institutional Review Boards, or IRBs, or ethics committees
      finding regulatory violations that require us to undertake corrective
      action, resulting in suspension or termination of one or more sites or the
      imposition of a clinical hold on the entire study;
| |  | one or more IRBs or ethics committees rejecting,
      suspending or terminating the study at an investigational site, precluding
      enrollment of additional subjects, or withdrawing its approval of the
      trial; or                                                                                                                          
| |  | failure to reach agreement on acceptable terms with
      prospective clinical trial sites.                                                                                                                                                                                                                                                            

Our product development costs will increase if we experience
delays in testing or approval or if we need to perform more or larger clinical
trials than planned. Additionally, changes in regulatory requirements and
policies may occur, and we may need to amend study protocols to reflect these
changes. Amendments may require us to resubmit our study protocols to regulatory
authorities or IRBs or ethics committees for re-examination, which may impact
the cost, timing or successful completion of that trial. Delays or increased
product development costs may have a material adverse effect on our business,
financial condition and prospects.

We may not be able to file INDs to commence additional
clinical trials on the timelines we expect, and even if we are able to, the FDA
may not permit us to proceed in a timely manner, or at all.

Prior to commencing clinical trials in the United States for
any of our product candidates, we may be required to have an allowed IND for
each product candidate and to file additional INDs prior to initiating any
additional clinical trials for SIRPαFc. We believe that the data from previous
preclinical studies will support the filing of additional INDs, to enable us to
undertake additional clinical studies as we have planned. However, submission of
an IND may not result in the FDA allowing further clinical trials to begin and,
once begun, issues may arise that will require us to suspend or terminate such
clinical trials. Additionally, even if relevant regulatory authorities agree
with the design and implementation of the clinical trials set forth in an IND,
these regulatory authorities may change their requirements in the future.
Failure to submit or have effective INDs and commence clinical programs will
significantly limit our opportunity to generate revenue.

23

---

If we have difficulty enrolling patients in clinical
trials, the completion of the trials may be delayed or cancelled.

As our product candidates advance from preclinical testing to
clinical testing, and then through progressively larger and more complex
clinical trials, we will need to enroll an increasing number of patients that
meet our eligibility criteria. There is significant competition for recruiting
cancer patients in clinical trials, and we may be unable to enroll the patients
we need to complete clinical trials on a timely basis or at all. The factors
that affect our ability to enroll patients are largely uncontrollable and
include, but are not limited to, the following:

| |  | size and nature of the patient population;                                         
| | - | -----------------------------------------------------------------------------------
| |  | eligibility and exclusion criteria for the
      trial;                            
| |  | design of the study protocol;                                                      
| |  | competition with other companies for clinical
      sites or patients;             
| |  | the perceived risks and benefits of the product
      candidate under study;       
| |  | the patient referral practices of physicians;
      and                            
| |  | the number, availability, location and
      accessibility of clinical trial sites.

If we are unable to successfully develop companion
diagnostics for our therapeutic product candidates, or experience significant
delays in doing so, we may not achieve marketing approval or realize the full
commercial potential of our therapeutic product candidates.

We may develop companion diagnostics for our therapeutic
product candidates. We expect that, at least in some cases, regulatory
authorities may require the development and regulatory approval of a companion
diagnostic as a condition to approving our therapeutic product candidates. We
have limited experience and capabilities in developing or commercializing
diagnostics and plan to rely in large part on third parties to perform these
functions. We have not begun to develop companion diagnostics for any of our
therapeutic product candidates.

Companion diagnostics are subject to regulation by the FDA, HC,
and comparable foreign regulatory authorities as medical devices and may require
separate regulatory approval or clearance prior to commercialization. If we, or
any third parties that we engage to assist us, are unable to successfully
develop companion diagnostics for our therapeutic product candidates, or
experience delays in doing so, our business may be substantially harmed.

Regulatory approval processes are lengthy, expensive and
inherently unpredictable. Our inability to obtain regulatory approval for our
product candidates would substantially harm our business.

Our development and commercialization activities and product
candidates are significantly regulated by a number of governmental entities,
including the FDA, HC, and comparable authorities in other countries. Regulatory
approvals are required prior to each clinical trial and we may fail to obtain
the necessary approvals to commence or continue clinical testing. We must comply
with regulations concerning the manufacture, testing, safety, effectiveness,
labeling, documentation, advertising, and sale of products and product
candidates and ultimately must obtain regulatory approval before we can
commercialize a product candidate. The time required to obtain approval by such
regulatory authorities is unpredictable but typically takes many years following
the commencement of preclinical studies and clinical trials. Any analysis of
data from clinical activities we perform is subject to confirmation and
interpretation by regulatory authorities, which could delay, limit or prevent
regulatory approval. Even if we believe results from our clinical trials are
favorable to support the marketing of our product candidates, the FDA or other
regulatory authorities may disagree. In addition, approval policies,
regulations, or the type and amount of clinical data necessary to gain approval
may change during the course of a product candidates clinical development and
may vary among jurisdictions. We have not obtained regulatory approval for any
product candidate and it is possible that none of our existing product
candidates or any future product candidates will ever obtain regulatory
approval.

24

---

We could fail to receive regulatory approval for our product
candidates for many reasons, including, but not limited to:

| |  | disagreement with the design or implementation of our
      clinical trials;                                                                                                                                                           
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | failure to demonstrate that a product candidate is safe
      and effective for its proposed indication;                                                                                                                               
| |  | failure of clinical trials to meet the level of
      statistical significance required for approval;                                                                                                                                  
| |  | failure to demonstrate that a product candidates
      clinical and other benefits outweigh its safety risks;                                                                                                                         
| |  | disagreement with our interpretation of data from
      preclinical studies or clinical trials;                                                                                                                                        
| |  | the insufficiency of data collected from clinical trials
      of our product candidates to support the submission and filing of a
      biologic license application, or BLA, or other submission to obtain
      regulatory approval;
| |  | deficiencies in the manufacturing processes or the
      failure of facilities of CMOs with whom we contract for clinical and
      commercial supplies to pass a pre-approval inspection; or                                          
| |  | changes in the approval policies or regulations that
      render our preclinical and clinical data insufficient for approval.                                                                                                         

A regulatory authority may require more information, including
additional preclinical or clinical data to support approval, which may delay or
prevent approval and our commercialization plans, or we may decide to abandon
the development program. If we were to obtain approval, regulatory authorities
may approve any of our product candidates for fewer or more limited indications
than we request, may grant approval contingent on the performance of costly
post-marketing clinical trials, or may approve a product candidate with a label
that does not include the labeling claims necessary or desirable for the
successful commercialization of that product candidate. Moreover, depending on
any safety issues associated with our product candidates that garner approval,
the FDA may impose a risk evaluation and mitigation strategy, thereby imposing
certain restrictions on the sale and marketability of such products.

We may not achieve our publicly announced milestones
according to schedule, or at all.

From time to time, we may announce the timing of certain events
we expect to occur, such as the anticipated timing of results from our clinical
trials. These statements are forward-looking and are based on the best estimates
of management at the time relating to the occurrence of such events. However,
the actual timing of such events may differ from what has been publicly
disclosed. The timing of events such as initiation or completion of a clinical
trial, filing of an application to obtain regulatory approval, or announcement
of additional clinical trials for a product candidate may ultimately vary from
what is publicly disclosed. These variations in timing may occur as a result of
different events, including the nature of the results obtained during a clinical
trial or during a research phase, problems with a CMO or a CRO or any other
event having the effect of delaying the publicly announced timeline. We
undertake no obligation to update or revise any forward-looking information,
whether as a result of new information, future events or otherwise, except as
otherwise required by law. Any variation in the timing of previously announced
milestones could have a material adverse effect on our business plan, financial
condition or operating results and the trading price of common shares.

We face competition from other biotechnology and
pharmaceutical companies and our financial condition and operations will suffer
if we fail to effectively compete.

The biotechnology and pharmaceutical industries are intensely
competitive and subject to rapid and significant technological change. Our
competitors include large, well-established pharmaceutical companies,
biotechnology companies, and academic and research institutions developing
cancer therapeutics for the same indications we are targeting and competitors
with existing marketed therapies. Many other companies are developing or
commercializing therapies to treat the same diseases or indications for which
our product candidates may be useful. Although there are no approved therapies
that specifically target the CD47 pathway, some competitors use therapeutic
approaches that may compete directly with our product candidates. For example,
SIRPαFc is in direct competition with CD47 blocking antibodies from Forty Seven
Inc., Celgene Corporation, Novimmune SA and others.

Many of our competitors have substantially greater financial,
technical and human resources than we do and have significantly greater
experience than us in conducting preclinical testing and human clinical trials
of product candidates, scaling up manufacturing operations and obtaining
regulatory approvals of products. Accordingly, our competitors may succeed in
obtaining regulatory approval for products more rapidly than we do. Our ability
to compete successfully will largely depend on:

25

---

| |  | the efficacy and safety profile of our product candidates
      relative to marketed products and other product candidates in development;       
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------
| |  | our ability to develop and maintain a competitive
      position in the product categories and technologies on which we focus;                   
| |  | the time it takes for our product candidates to complete
      clinical development and receive marketing approval;                              
| |  | our ability to obtain required regulatory approvals;                                                                                             
| |  | our ability to commercialize any of our product
      candidates that receive regulatory approval;                                               
| |  | our ability to establish, maintain and protect
      intellectual property rights related to our product candidates; and                         
| |  | acceptance of any of our product candidates that receive
      regulatory approval by physicians and other healthcare providers and
      payers.

Competitors have developed and may develop technologies that
could be the basis for products that challenge the differentiated nature and
potential for best-in-class product development programs and discovery research
capabilities of Fluorinov. Some of those products may have an entirely different
approach or means of accomplishing the desired therapeutic effect than our
product candidates and may be more effective or less costly than our product
candidates. The success of our competitors and their products and technologies
relative to our technological capabilities and competitiveness could have a
material adverse effect on the future preclinical studies and clinical trials of
our product candidates, including our ability to obtain the necessary regulatory
approvals for the conduct of such clinical trials. This may further negatively
impact our ability to generate future product development programs using
Fluorinov technology.

If we are not able to compete effectively against our current
and future competitors, our business will not grow and our financial condition
and operations will substantially suffer.

We heavily rely on the capabilities and experience of our
key executives and scientists and the loss of any of them could affect our
ability to develop our products.

The loss of Dr. Niclas Stiernholm, our President and Chief
Executive Officer, or other key members of our staff, could harm us. We have
employment agreements with Drs. Stiernholm and other key members of our staff,
although such employment agreements do not guarantee their retention. We also
depend on our scientific and clinical collaborators and advisors, all of whom
have outside commitments that may limit their availability to us. In addition,
we believe that our future success will depend in large part upon our ability to
attract and retain highly skilled scientific, managerial, medical, clinical and
regulatory personnel, particularly as we expand our activities and seek
regulatory approvals for clinical trials. We enter into agreements with our
scientific and clinical collaborators and advisors, key opinion leaders and
academic partners in the ordinary course of our business. We also enter into
agreements with physicians and institutions who will recruit patients into our
clinical trials on our behalf in the ordinary course of our business.
Notwithstanding these arrangements, we face significant competition for these
types of personnel from other companies, research and academic institutions,
government entities and other organizations. We cannot predict our success in
hiring or retaining the personnel we require for continued growth. The loss of
the services of any of our executive officers or other key personnel could
potentially harm our business, operating results or financial condition.

Our employees may engage in misconduct or other improper
activities, including noncompliance with regulatory standards and requirements,
which could have a material adverse effect on our business.

We are exposed to the risk of employee fraud or other
misconduct. Misconduct by employees could include failures to comply with FDA
regulations, provide accurate information to the FDA, comply with manufacturing
standards we have established, comply with federal and state healthcare fraud
and abuse laws and regulations, report financial information or data accurately or disclose unauthorized
activities to us. In particular, sales, marketing and business arrangements in
the healthcare industry are subject to extensive laws and regulations intended
to prevent fraud, kickbacks, self-dealing, and other abusive practices. These
laws and regulations may restrict or prohibit a wide range of pricing,
discounting, marketing and promotion, sales commission, customer incentive
programs and other business arrangements. Employee misconduct could also involve
the improper use of information obtained in the course of clinical trials, which
could result in regulatory sanctions and serious harm to our reputation. If any
such actions are instituted against us, and we are not successful in defending
ourselves or asserting our rights, those actions could have a substantial impact
on our business and results of operations, including the imposition of
substantial fines or other sanctions.

26

---

The failure to fully realize the benefits of our
acquisition of Fluorinov may adversely affect our future results.

In
January 2016, we acquired all of the outstanding capital stock of Fluorinov, a
small molecule medicinal chemistry company with preclinical oncology assets and
a potential discovery platform. The success of our acquisition of Fluorinov will
depend, in part, on our ability to fully realize the anticipated benefits from
combining our business with Fluorinovs business. However, to realize these
anticipated benefits, we must continue the research and development activities
previously undertaken by Fluorinov as a stand-alone company. If we are unable to
achieve these objectives, the anticipated benefits of our acquisition of
Fluorinov may not be realized fully or at all or may take longer to realize than
expected.

We may expand our business through the acquisition of
companies or businesses or by entering into collaborations or by in-licensing
product candidates, each of which could disrupt our business and harm our
financial condition.

We have in the past and may in the future seek to expand our
pipeline and capabilities by acquiring one or more companies or businesses,
entering into collaborations, or in-licensing one or more product candidates.
Acquisitions, collaborations and in-licenses involve numerous risks, including,
but not limited to:

| |  | substantial cash expenditures;                                                                                                                 
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------
| |  | technology development risks;                                                                                                                  
| |  | potentially dilutive issuances of equity securities;                                                                                           
| |  | incurrence of debt and contingent liabilities, some of
      which may be difficult or impossible to identify at the time of
      acquisition;
| |  | difficulties in assimilating the operations of the
      acquired companies;                                                                   
| |  | potential disputes regarding contingent consideration;                                                                                         
| |  | diverting our managements attention away from other
      business concerns;                                                                  
| |  | entering markets in which we have limited or no direct
      experience; and                                                                   
| |  | potential loss of our key employees or key employees of
      the acquired companies or businesses.                                            

We have experience in making acquisitions, entering
collaborations, and in-licensing product candidates, however, we cannot provide
assurance that any acquisition, collaboration or in-license will result in
short-term or long-term benefits to us. We may incorrectly judge the value or
worth of an acquired company or business or in-licensed product candidate. In
addition, our future success would depend in part on our ability to manage the
rapid growth associated with some of these acquisitions, collaborations and
in-licenses. We cannot provide assurance that we would be able to successfully
combine our business with that of acquired businesses, manage a collaboration or
integrate in-licensed product candidates. Furthermore, the development or
expansion of our business may require a substantial capital investment by
us.

Negative results from clinical trials or studies of
others and adverse safety events involving the targets of our products may have
an adverse impact on our future commercialization efforts.

From time to time, studies or clinical trials on various
aspects of biopharmaceutical products are conducted by academic researchers,
competitors or others. The results of these studies or trials, when published,
may have a significant effect on the market for the biopharmaceutical product
that is the subject of the study. The publication of negative results of studies
or clinical trials or adverse safety events related to our product candidates,
or the therapeutic areas in which our product candidates compete,
could adversely affect our share price and our ability to finance future
development of our product candidates, and our business and financial results
could be materially and adversely affected.

27

---

We face the risk of product liability claims, which could
exceed our insurance coverage and produce recalls, each of which could deplete
our cash resources.

We are exposed to the risk of product liability claims alleging
that use of our product candidates caused an injury or harm. These claims can
arise at any point in the development, testing, manufacture, marketing or sale
of our product candidates and may be made directly by patients involved in
clinical trials of our product candidates, by consumers or healthcare providers
or by individuals, organizations or companies selling our products. Product
liability claims can be expensive to defend, even if the product or product
candidate did not actually cause the alleged injury or harm.

Insurance covering product liability claims becomes
increasingly expensive as a product candidate moves through the development
pipeline to commercialization. We currently maintain clinical trial liability
insurance coverage of $10,000. However, there can be no assurance that such
insurance coverage is or will continue to be adequate or available to us at a
cost acceptable to us or at all. We may choose or find it necessary under our
collaborative agreements to increase our insurance coverage in the future. We
may not be able to secure greater or broader product liability insurance
coverage on acceptable terms or at reasonable costs when needed. Any liability
for damages resulting from a product liability claim could exceed the amount of
our coverage, require us to pay a substantial monetary award from our own cash
resources and have a material adverse effect on our business, financial
condition and results of operations. Moreover, a product recall, if required,
could generate substantial negative publicity about our products and business,
inhibit or prevent commercialization of other products and product candidates or
negatively impact existing or future collaborations.

If we are unable to maintain product liability insurance
required by our third parties, the corresponding agreements would be subject to
termination, which could have a material adverse impact on our
operations.

Some of our licensing and other agreements with third parties
require or might require us to maintain product liability insurance. If we
cannot maintain acceptable amounts of coverage on commercially reasonable terms
in accordance with the terms set forth in these agreements, the corresponding
agreements would be subject to termination, which could have a material adverse
impact on our operations.

Risks Related to Intellectual Property

If we are unable to adequately protect and enforce our
intellectual property, our competitors may take advantage of our development
efforts or acquired technology and compromise our prospects of marketing and
selling our key products.

We control two patent families relating to SIRPα. One family
relates to the use of SIRPα to treat cancer. The other family relates to our
drug as a composition of matter, SIRPαFc. We have also recently filed for patent
protection covering additional inventions relating to SIRPα, including
anti-cancer drug combination therapies that utilize SIRPαFc.

Our small molecule portfolio embraces patent filings that cover
numerous different inventions. With the exception of one process scheme, these
patent filings each claim a family of small molecule drugs as compositions of
matter, together with claims for their production and their medical uses. These
drugs target cancer for the most part, and some related medical end-uses.

Our success will depend in part upon our ability to protect our
intellectual property and proprietary technologies and upon the nature and scope
of the intellectual property protection we receive. For example, some of our
patent portfolio covers primarily methods of medical use but not compositions of
matter. The ability to compete effectively and to achieve partnerships will
depend on our ability to develop and maintain proprietary aspects of our
technology and to operate without infringing on the proprietary rights of
others. The presence of such proprietary rights of others could severely limit our ability to develop and
commercialize our products, to conduct our existing research and could require
financial resources to defend litigation, which may be in excess of our ability
to raise such funds. There is no assurance that our pending patent applications
or those that we intend to acquire will be approved in a form that will be
sufficient to protect our proprietary technology and gain or keep any
competitive advantage that we may have or, once approved, will be upheld in any
post-grant proceedings brought by any third parties.

28

---

The patent positions of pharmaceutical companies can be highly
uncertain and involve complex legal, scientific and factual questions for which
important legal principles remain unresolved. Patents issued to us or our
respective licensors may be challenged, invalidated or circumvented. To the
extent our intellectual property, including licensed intellectual property,
offers inadequate protection, or is found to be invalid or unenforceable, we are
exposed to a greater risk of direct competition. If our intellectual property
does not provide adequate protection against our competitors products, our
competitive position could be adversely affected, as could our business,
financial condition and results of operations. Both the patent application
process and the process of managing patent disputes can be time consuming and
expensive, and the laws of some foreign countries may not protect our
intellectual property rights to the same extent as do the laws of Canada and the
United States.

We will be able to protect our intellectual property from
unauthorized use by third parties only to the extent that our proprietary
technologies, key products, and any future products are covered by valid and
enforceable intellectual property rights including patents or are effectively
maintained as trade secrets, and provided we have the funds to enforce our
rights, if necessary.

If we lose our licenses from third-party owners we may be
unable to continue a substantial part of our business.

We are party to licenses that give us rights to intellectual
property that is necessary or useful for a substantial part of our business.
Pursuant to our exclusive license agreement with UHN and HSC under which we
license certain patent rights for our key products and their uses, we are
required to use commercially reasonable efforts to commercialize products based
on the licensed rights and pay certain royalties and sublicensing revenue to UHN
and HSC. These licenses require that we pay development milestone payments,
regulatory milestone payments, royalties on net sales, and sublicensing
revenues, as well as annual maintenance fees.

We have also entered into agreements allowing us to manufacture
SIRPαFc using Catalents proprietary GPEx® expression system. The consideration
includes payments at the time we successfully reach a series of development and
sales milestones. We may also enter into licenses in the future to access
additional third-party intellectual property.

If we fail to pay annual maintenance fees, development and
sales milestones, or it is determined that we did not use commercially
reasonable efforts to commercialize licensed products, we could lose our
licenses which could have a material adverse effect on our business and
financial condition.

We may require additional third-party licenses to
effectively develop and manufacture our key products and are currently unable to
predict the availability or cost of such licenses.

A substantial number of patents have already been issued to
other biotechnology and pharmaceutical companies. To the extent that valid
third-party patent rights cover our products or services, we or our strategic
collaborators would be required to seek licenses from the holders of these
patents in order to manufacture, use or sell these products and services, and
payments under them would reduce our profits from these products and services.
We are currently unable to predict the extent to which we may wish or be
required to acquire rights under such patents, the availability and cost of
acquiring such rights, and whether a license to such patents will be available
on acceptable terms or at all. There may be patents in the U.S. or in foreign
countries or patents issued in the future that are unavailable to license on
acceptable terms. Our inability to obtain such licenses may hinder or eliminate
our ability to manufacture and market our products.

Changes in patent law and its interpretation could
diminish the value of patents in general, thereby impairing our ability to
protect our product candidates.

As is the case with other biotechnology and pharmaceutical
companies, our success is heavily dependent on intellectual property rights,
particularly patents. Obtaining and enforcing patents in the biopharmaceutical
industry involves technological and legal complexity, and obtaining and
enforcing biopharmaceutical patents is costly, time-consuming and inherently
uncertain. The U.S. Supreme Court has ruled on several patent cases in recent
years, either narrowing the scope of patent protection available in certain
circumstances or weakening the rights of patent owners in certain situations. In
addition to increasing uncertainty with regard to our and our licensors or
collaborators ability to obtain patents in the future, this combination of
events has created uncertainty with respect to the value of patents, once
obtained. Depending on decisions by the U.S. Congress, the federal courts, and
the U.S. Patent and Trademark Office, or USPTO, the laws and regulations
governing patents could change in unpredictable ways that would weaken our and
our licensors or collaborators ability to obtain new patents or to enforce
existing patents and patents we and our licensors or collaborators may obtain in
the future.

29

---

Recent patent reform legislation could increase the
uncertainties and costs surrounding the prosecution of our and our licensors or
collaborators patent applications and the enforcement or defense of our or our
licensors or collaborators issued patents. On September 16, 2011, the
Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law.
The Leahy-Smith Act includes a number of significant changes to U.S. patent law.
These include provisions that affect the way patent applications are prosecuted
and may also affect patent litigation. The USPTO recently developed new
regulations and procedures to govern administration of the Leahy-Smith Act, and
many of the substantive changes to patent law associated with the Leahy-Smith
Act, and in particular, the first to file provisions, only became effective on
March 16, 2013. Accordingly, it is not clear what, if any, impact the
Leahy-Smith Act will have on the operation of our business. However, the
Leahy-Smith Act and its implementation could increase the uncertainties and
costs surrounding the prosecution of our or our licensors or collaborators
patent applications and the enforcement or defense of our or our licensors or
collaborators issued patents, all of which could have a material adverse effect
on our business and financial condition.

Litigation regarding patents, patent applications, and
other proprietary rights may be expensive, time consuming and cause delays in
the development and manufacturing of our key products.

Our success will depend in part on our ability to operate
without infringing the proprietary rights of third parties. The pharmaceutical
industry is characterized by extensive patent litigation. Other parties may
have, or obtain in the future, patents and allege that the use of our
technologies infringes these patent claims or that we are employing their
proprietary technology without authorization.

In addition, third parties may challenge or infringe upon our
existing or future patents. Proceedings involving our patents or patent
applications or those of others could result in adverse decisions regarding:

| |  | the patentability of our inventions relating to
      our key products; and/or                                 
| | - | ---------------------------------------------------------------------------------------------------------------
| |  | the enforceability, validity, or scope of
      protection offered by our patents relating to our key products.

If we are unable to avoid infringing the patent rights of
others, we may be required to seek a license, defend an infringement action, or
challenge the validity of the patents in court. Regardless of the outcome,
patent litigation is costly and time consuming. In some cases, we may not have
sufficient resources to bring these actions to a successful conclusion. In
addition, if we do not obtain a license, develop or obtain non-infringing
technology, fail to defend an infringement action successfully or have infringed
patents declared invalid, we may:

| |  | incur substantial monetary damages;                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------
| |  | encounter significant delays in bringing our
      key products to market; and/or                                                          
| |  | be precluded from participating in the
      manufacture, use or sale of our key products or methods of treatment
      requiring licenses.

Even if we are successful in these proceedings, we may incur
substantial costs and divert management time and attention in pursuing these
proceedings, which could have a material adverse effect on us.

Our reliance on third parties requires us to share our
trade secrets, which increases the possibility that a competitor will discover
them.

Because we rely on third parties to develop our products, we
must share trade secrets with them. We seek to protect our proprietary
technology in part by entering into confidentiality agreements and, if
applicable, material transfer agreements, collaborative research agreements,
consulting agreements or other similar agreements with our collaborators, advisors, employees and consultants prior to
beginning research or disclosing proprietary information. These agreements
typically restrict the ability of our collaborators, advisors, employees and
consultants to publish data potentially relating to our trade secrets. Our
academic and clinical collaborators typically have rights to publish data,
provided that we are notified in advance and may delay publication for a
specified time in order to secure our intellectual property rights arising from
the collaboration. In other cases, publication rights are controlled exclusively
by us, although in some cases we may share these rights with other parties. We
also conduct joint research and development programs which may require us to
share trade secrets under the terms of research and development collaboration or
similar agreements. Despite our efforts to protect our trade secrets, our
competitors may discover our trade secrets, either through breach of these
agreements, independent development or publication of information including our
trade secrets in cases where we do not have proprietary or otherwise protected
rights at the time of publication. A competitors discovery of our trade secrets
may impair our competitive position and could have a material adverse effect on
our business and financial condition.

30

---

Risks Related to Our Common Shares

Our common share price has been volatile in recent years,
and may continue to be volatile.

The market prices for securities of biopharmaceutical
companies, including ours, have historically been volatile. In the year ended
December 31, 2017, our common shares traded on the TSX at a high of $15.68 and a
low of $5.26 per share and on the NASDAQ at a high of U.S. $13.30 and a low of
U.S.$4.15
per share. In the year ended December 31, 2016, our common shares traded on the TSX at a high of $23.48 and a low of $7.12 per share and on the NASDAQ at a high
of U.S. $17.70 and a low of U.S. $5.25 per share. A number of factors could influence the
volatility in the trading price of our common shares, including changes in the
economy or in the financial markets, industry related developments, the results
of product development and commercialization, changes in government regulations,
and developments concerning proprietary rights, litigation and cash flow. Our
quarterly losses may vary because of the timing of costs for manufacturing,
preclinical studies and clinical trials. Also, the reporting of adverse safety
events involving our products and public rumors about such events could cause
our share price to decline or experience periods of volatility. Each of these
factors could lead to increased volatility in the market price of our common
shares. In addition, changes in the market prices of the securities of our
competitors may also lead to fluctuations in the trading price of our common
shares.

We have never paid dividends and do not expect to do so
in the foreseeable future.

We have not declared or paid any cash dividends on our common
or preferred shares to date. The payment of dividends in the future will be
dependent on our earnings and financial condition in addition to such other
factors as our board of directors considers appropriate. Unless and until we pay
dividends, shareholders may not receive a return on their shares. There is no
present intention by our board of directors to pay dividends on our shares.

We may issue additional common shares to the former
shareholders of Fluorinov as a result of our satisfaction of certain milestones,
resulting in share ownership dilution.

Under the terms of our agreements with Fluorinov and its former
shareholders, at our discretion up to 50% of any future contingent payments can
be satisfied through the issuance of our common shares, provided that the
aggregate number of common shares issuable under such payments will not exceed
1,558,447 common shares, which amount represented 19.99% of the outstanding
common shares at the time of execution of the acquisition, unless shareholder
approval has first been obtained.

Issuing additional common shares to the former shareholders of
Fluorinov in satisfaction of contingent consideration dilutes the ownership
interests of holders of our common shares on the dates of such issuances. If we
are unable to realize the strategic, operational and financial benefits
anticipated from our acquisition of Fluorinov, our shareholders may experience
dilution of their ownership interests in our company upon any such future
issuances of our common shares without receiving any commensurate benefit.

Future sales or issuances of equity securities and the
conversion of outstanding securities to common shares could decrease the value
of the common shares, dilute investors voting power, and reduce our earnings
per share.

31

---

We may sell additional equity securities in future offerings,
including through the sale of securities convertible into equity securities, to
finance operations, acquisitions or projects, and issue additional common shares
if outstanding warrants or stock options are exercised, or preferred shares are
converted to common shares, which may result in dilution. See the information in
the section of this MD&A entitled Description of Share Capital for details
of our outstanding securities convertible into common shares. Subject to receipt
of any required regulatory approvals, subscribers of the December 2013 private
placement who purchased a minimum of 10% of the securities sold under the
offering received rights to purchase our securities in future financings to
enable each such shareholder to maintain their percentage holding in our common
shares for so long as the subscriber holds at least 10% of the outstanding
common shares on a fully-diluted basis. Shareholders who do not have this future
financing participation right may be disadvantaged in participating in such
financings.

Our board of directors has the authority to authorize certain
offers and sales of additional securities without the vote of, or prior notice
to, shareholders. Based on the need for additional capital to fund expected
expenditures and growth, it is likely that we will issue additional securities
to provide such capital. Such additional issuances may involve the issuance of a
significant number of common shares at prices less than the current market price
for our common shares.

Sales of substantial amounts of our securities, or the
availability of such securities for sale, as well as the issuance of substantial
amounts of our common shares upon conversion of outstanding convertible equity
securities, could adversely affect the prevailing market prices for our
securities and dilute investors earnings per share. A decline in the market
prices of our securities could impair our ability to raise additional capital
through the sale of securities should we desire to do so.

U.S. holders of 10% or more of the voting power of our
common shares may be subject to U.S. federal income taxation at ordinary income
tax rates on undistributed earnings and profits.

There is a risk that we will be classified as a controlled
foreign corporation, or CFC, for U.S. federal income tax purposes. We will
generally be classified as a CFC if more than 50% of our outstanding shares,
measured by reference to voting power or value, are owned (directly, indirectly
or by attribution) by U.S. Shareholders. For this purpose, a U.S.
Shareholder is any U.S. person that owns directly, indirectly or by
attribution, 10% or more of the voting power of our outstanding shares. If we
are classified as a CFC, a U.S. Shareholder may be subject to U.S. income
taxation at ordinary income tax rates on all or a portion of our undistributed
earnings and profits attributable to subpart F income and may also be subject
to tax at ordinary income tax rates on any gain realized on a sale of common
shares, to the extent of our current and accumulated earnings and profits
attributable to such shares. The CFC rules are complex and U.S. Shareholders of
our common shares are urged to consult their own tax advisors regarding the
possible application of the CFC rules to them in their particular circumstances.

We are likely a passive foreign investment company,
which may have adverse U.S. federal income tax consequences for U.S.
shareholders.

U.S. investors should be aware that we believe we were
classified as a PFIC during the tax years ended December 31, 2017 and 2016, and
based on current business plans and financial expectations, we believe 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 U.S. shareholders holding period of our
common shares, then such U.S. shareholder generally will be required to treat
any gain realized upon a disposition of our common shares, or any so-called
excess distribution received on our common 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
QEFElection, or a mark-to-market election with respect to our shares.
A U.S. 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 U.S. shareholder who makes the mark-to-market election generally
must include as ordinary income each year the excess of the fair market value of
the common shares over the shareholders adjusted tax basis therein. Each U.S.
shareholder should consult its own tax advisors regarding the PFIC rules and the
U.S. federal income tax consequences of the acquisition, ownership and
disposition of our common shares.

32

---

The effect of comprehensive U.S. tax reform legislation
on the Company is uncertain.

On December 22, 2017, the U.S. government enacted H.R. 1, An
Act to provide for reconciliation pursuant to titles II and V of the concurrent
resolution on the budget for fiscal year 2018 (informally titled the Tax Cuts
and Jobs Act). Among a number of significant changes to the U.S. federal income
tax rules, the Tax Cuts and Jobs Act reduces the marginal U.S. corporate income
tax rate from 35% to 21%, limits the deduction for net interest expense, shifts
the United States toward a more territorial tax system, and imposes new taxes to
combat erosion of the U.S. federal income tax base, such as a one-time tax on
earnings of certain foreign subsidiaries that were previously tax deferred and a
new minimum tax on foreign earnings. The effects of the Tax Cuts and Jobs Act on
our company, whether adverse or favorable, are uncertain, and may not become
evident for some period of time, but could have a material adverse effect on our
business, financial position or results from operations.

It may be difficult for non-Canadian investors to obtain
and enforce judgments against us because of our Canadian incorporation and
presence.

We are a corporation existing under the laws of the Province of
Ontario, Canada. Several of our directors and officers, and several of the
experts are residents of Canada, and all or a substantial portion of their
assets, and a substantial portion of our assets, are located outside the United
States. Consequently, although we have appointed an agent for service of process
in the United States, it may be difficult for holders of our securities who
reside in the United States to effect service within the United States upon
those directors and officers, and the experts who are not residents of the
United States. It may also be difficult for holders of our securities who reside
in the United States to realize in the United States upon judgments of courts of
the United States predicated upon our civil liability and the civil liability of
our directors, officers and experts under the United States federal securities
laws. Investors should not assume that Canadian courts (i) would enforce
judgments of United States courts obtained in actions against us or such
directors, officers or experts predicated upon the civil liability provisions of
the United States federal securities laws or the securities or blue sky laws
of any state or jurisdiction of the United States or (ii) would enforce, in
original actions, liabilities against us or such directors, officers or experts
predicated upon the United States federal securities laws or any securities or
blue sky laws of any state or jurisdiction of the United States. In addition,
the protections afforded by Canadian securities laws may not be available to
investors in the United States.

If there are substantial sales of our common shares, the
market price of our common shares could decline.

Sales of substantial numbers of our common shares could cause a
decline in the market price of our common shares. Any sales by existing
shareholders or holders who exercise their warrants or stock options may have an
adverse effect on our ability to raise capital and may adversely affect the
market price of our common shares.

We are an emerging growth company, and we cannot be
certain if the reduced reporting requirements applicable to emerging growth
companies will make our common shares less attractive to investors.

We are an emerging growth company, as defined in the JOBS
Act. For as long as we continue to be an emerging growth company, we may take
advantage of exemptions from various reporting requirements that are applicable
to other public companies that are not emerging growth companies, including not
being required to comply with the auditor attestation requirements of Section
404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding
executive compensation in our periodic reports and exemptions from the
requirements of holding a nonbinding advisory vote on executive compensation and
shareholder approval of any golden parachute payments not previously approved.
We could be an emerging growth company for up to five years, although
circumstances could cause us to lose that status earlier. We cannot predict if
investors will find our common shares less attractive because we may rely on
these exemptions. If some investors find our common shares less attractive as a
result, there may be a less active trading market for our common shares and our
share price may be more volatile.

Any failure to maintain an effective system of internal
controls may result in material misstatements of our consolidated financial
statements or cause us to fail to meet our reporting obligations or fail to
prevent fraud; and in that case, our shareholders could lose confidence in our
financial reporting, which would harm our business and could negatively impact
the price of our common shares.

Effective internal controls are necessary for us to provide
reliable financial reports and prevent fraud. If we fail to maintain an
effective system of internal controls, we might not be able to report our
financial results accurately or prevent fraud; and in that case, our shareholders could lose
confidence in our financial reporting, which would harm our business and could
negatively impact the price of our common shares. While we believe that we have
sufficient personnel and review procedures to allow us to maintain an effective
system of internal controls, we cannot provide assurance that we will not
experience potential material weaknesses in our internal control. Even if we
conclude that our internal control over financial reporting provides reasonable
assurance regarding the reliability of financial reporting and the preparation
of consolidated financial statements for external purposes in accordance with
IFRS as issued by the IASB, because of its inherent limitations, internal
control over financial reporting may not prevent or detect fraud or
misstatements. Failure to implement required new or improved controls, or
difficulties encountered in their implementation, could harm our results of
operations or cause us to fail to meet our future reporting obligations.

33

---

If we fail to timely achieve and maintain the adequacy of our
internal control over financial reporting, we may not be able to produce
reliable financial reports or help prevent fraud. Our failure to achieve and
maintain effective internal control over financial reporting could prevent us
from complying with our reporting obligations on a timely basis, which could
result in the loss of investor confidence in the reliability of our consolidated
financial statements, harm our business and negatively impact the trading price
of our common shares.

As a foreign private issuer, we are not subject to
certain United States securities law disclosure requirements that apply to a
domestic United States issuer, which may limit the information which would be
publicly available to our shareholders.

As a foreign private issuer, we are not required to comply with
all the periodic disclosure requirements of the Exchange Act, and therefore,
there may be less publicly available information about us than if we were a
United States domestic issuer. For example, we are not subject to the proxy
rules in the United States and disclosure with respect to our annual meetings
will be governed by Canadian requirements.

Our charter documents and certain Canadian legislation
could delay or deter a change of control, limit attempts by our shareholders to
replace or remove our current management and limit the market price of our
common shares.

Our authorized preferred shares are available for issuance from
time to time at the discretion of our board of directors, without shareholder
approval. Our articles grant our board of directors the authority to determine
the special rights and restrictions granted to or imposed on any unissued series
of preferred shares, and those rights may be superior to those of our common
shares. Further, the Investment Canada Act subjects any acquisition of control
of a company by a non-Canadian to government review if the value of the assets
as calculated pursuant to the legislation exceeds a threshold amount or in other
circumstances determined at the discretion of the Canadian government. A
reviewable acquisition may not proceed unless the relevant minister is satisfied
that the investment is likely to be of net benefit to Canada and the Canadian
government is satisfied that no other important concerns arise from the
acquisition of control. Any of the foregoing could prevent or delay a change of
control and may deprive or limit strategic opportunities to our shareholders to
sell their shares.

DESCRIPTION OF SHARE CAPITAL

Overview

Our authorized share capital consists of an unlimited number of
common shares, Class B Shares, First Preferred Shares, Series I Non-Voting
Convertible First Preferred Shares, or Series I Preferred Shares, and Series II
Non-Voting Convertible First Preferred Shares, or Series II Preferred Shares, in
each case without nominal or par value.

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.

34

---

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 Company.

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.

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. 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 Class B Shares shall be
entitled to participate rateably with the common shares in any distribution of
the assets of the Company.

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 shall be 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.

During 2013, we created a new series of shares, our Series I
Preferred Shares. The holders of Series I Preferred Shares are not entitled to
vote at any meeting of our shareholders (except in limited circumstances
provided for in the OBCA), and they 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. Each issued and fully paid Series I Preferred Share may at any
time be converted, at the option of the holder, into one-thirtieth
(1/30th) of a common share, subject to adjustment. In the event of a
take-over bid, that is a formal bid, the Offeror of such bid shall make an
offer to acquire the same percentage of outstanding Series I Preferred Shares as
the percentage of common shares for which the bid is made, on the same terms and
for the same amount and kind of consideration.

During 2015, we created a new series of shares, our Series II
Preferred Shares. The holders of Series II Preferred Shares are not entitled to
vote at any meeting of our shareholders (except in limited circumstances
provided for in the OBCA), and they 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. Each issued and fully paid Series II Preferred Share may at
any time be converted, at the option of the holder, into one common share,
subject to adjustment. In the event of a take-over bid, that is a formal bid,
the Offeror of such bid shall make an offer to acquire the same percentage of
outstanding Series II Preferred Shares as the percentage of common shares for
which the bid is made, on the same terms and for the same amount and kind of
consideration.

As at December 31, 2017, 13,147,404 common shares were
outstanding, 52,325,827 Series I Preferred Shares were outstanding and
convertible into 1,744,194 common shares, and 4,368,403 Series II Preferred
Shares were outstanding and convertible into 4,368,403 common shares.

As at December 31, 2017, 69,073,031 common share purchase
warrants were outstanding and convertible into 2,302,434 common shares with a
weighted average exercise price of $8.83 per common share and 1,190,476 Preferred Warrants (as defined below) were outstanding and
convertible at the option of the holder into 1,190,476 common shares or
1,190,476 Series II Preferred Shares with a weighted average exercise price of
$8.40 per share.

As at December 31, 2017, there were 1,746,982 stock options
  outstanding to purchase common shares. The terms and conditions of such stock
  options are contained in the 2016 Stock Option Plan.

35

---

Share capital issued  year ended December 31, 2017

In June 2017, the Company completed an underwritten public
offering of common shares and Series II Preferred Shares in the United States.
In the offering, the Company sold 2,949,674 common shares and 3,250,000 Series
II Preferred Shares at a price of U.S. $5.00 per share. The gross proceeds from
this offering were $41,847 (U.S. $30,998) before deducting offering expenses of
$2,856.

Concurrently with the closing of the offering, the Company
amended the terms of certain common share purchase warrants, or the Preferred
Warrants, held by an existing institutional investor. The Preferred Warrants
were previously exercisable to acquire up to 1,190,476 common shares at an
exercise price of $8.40 per common share until December 13, 2018 (in each case
after giving effect to the 30:1 consolidation previously effected by the
Company). Pursuant to the amendment, each Preferred Warrants will now be
exercisable, at the discretion of the holder, to acquire either one common share
or one Series II Preferred Share. All other terms of the Preferred Warrants
(including the aggregate number of shares issuable on exercise of the Preferred
Warrants, the exercise price and the expiry date) remain unchanged.

In December 2017, the Company completed a non-brokered private
placement financing and sold 1,950,000 common shares and 400,000 Series II
Preferred Shares at a price of U.S. $8.50 per share yielding gross proceeds of
$25,338 (U.S. $19,975) before deducting offering expenses of $1,784.

During the year ended December 31, 2017, 13,332 common shares
were issued on the exercise of 399,980 common share purchase warrants for
proceeds of $159; 900,364 Series I Preferred Shares were converted into 30,012
common shares; and 359,202 Series II Preferred Shares were converted into
359,202 common shares.

Share capital issued  for the year ended December 31,
2016

During the year ended December 31, 2016, 30,301 common shares
were issued on the exercise of 909,059 common share purchase warrants for
proceeds of $359; and 562,388 Series I Preferred Shares were converted into
18,746 common shares.

Share capital issued  for the year ended December 31, 2015

On April 7, 2015, the Company completed an underwritten public
offering of common shares and Series II Preferred Shares in the United States.
In the offering, Trillium sold 1,750,754 common shares and 1,077,605 Series II
Preferred Shares at a price of U.S. $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 Trillium from this
offering were $68,875 (U.S. $55,153) before deducting offering expenses of
$4,913.

During the year ended December 31, 2015, 1,087,603 common
shares were issued on the exercise of 32,628,425 common share purchase warrants
for proceeds of $9,515 and 6,666 stock options were exercised for proceeds
of $50.

During the year ended December 31, 2015, 15,716,110 Series I
Preferred Shares were converted into 523,870 common shares.

Fully Diluted Share Capital

The number of issued and outstanding common shares, Series I
Preferred Shares, Series II Preferred Shares common share purchase warrants,
Preferred Warrants, and stock options on a fully converted basis as at December
31, 2017 was as follows:

36

---

|                                                                                       |  | Number of common  | 
|-------------------------------------------------------------------------------------- |  | ----------------- | 
|                                                                                       |  | share equivalents | 
|                                                                                       |  |                   | 
|Common shares                                                                          |  | 13,147,404        | 
|Series I Preferred Shares                                                              |  | 1,744,194         | 
|Series II Preferred Shares                                                             |  | 4,368,403         | 
|Warrants (exercisable for common shares)                                               |  | 2,302,434         | 
|Preferred Warrants
      (exercisable for common shares or Series II Preferred Shares) |  | 1,190,476         | 
|Stock options                                                                          |  | 1,746,982         | 
|Fully diluted common shares as at December 31, 2017                                    |  | 24,499,893        | 

Warrants

Our board of directors authorized or ratified the issuances of
the common share purchase warrants set forth in the table below and the issuance
of one common share upon the due exercise of every 30 common share purchase
warrants in accordance with its terms and the receipt by us of the designated
exercise price payable in respect of the share prior to the time of expiry on
the designated expiry date.

The following table shows the number of common share purchase
warrants outstanding, the exercise prices, and the number of common shares
issuable on exercise of such warrants and the exercise price per common share
for 30 common share purchase warrants at December 31, 2017:

|              |  |            |  |  |          |  |  | Number of     |  |  | Exercise     |  
|------------- |  | ---------- |  |  | -------- |  |  | ------------- |  |  | ------------ | -
|              |  |            |  |  |          |  |  | Common shares |  |  | Price per    |  
|              |  | Number of  |  |  | Exercise |  |  | Issuable      |  |  | Common Share |  
|Expiry dates  |  | Warrants   |  |  | Price    |  |  | on Exercise   |  |  | (30 Warrants | )
|              |  |            |  |  |          |  |  |               |  |  |              |  
|March 2018    |  | 8,240,455  |  |  | $ 0.40   |  |  | 274,682       |  |  | $ 12.00      |  
|December 2018 |  | 60,832,576 |  |  | $ 0.28   |  |  | 2,027,753     |  |  | $   8.40     |  
|Total         |  | 69,073,031 |  |  |          |  |  | 2,302,435     |  |  |              |  

Our board of directors authorized or ratified the issuances of
the Preferred Warrants set forth in the table below and the issuance of one
common share or one Series II Preferred Share upon the due exercise of each
Preferred Warrant in accordance with its terms and the receipt by us of the
designated exercise price payable in respect of the share prior to the time of
expiry on the designated expiry date.

The following table shows the number of Preferred Warrants
outstanding and their exercise price to acquire either one common share or one
Series II Preferred Share at the option of the holder as at December 31, 2017:

|              |  | Number of |  |  |          | 
|------------- |  | --------- |  |  | -------- | 
|              |  | Preferred |  |  | Exercise | 
|Expiry dates  |  | Warrants  |  |  | Price    | 
|              |  |           |  |  |          | 
|December 2018 |  | 1,190,476 |  |  | $ 8.40   | 
|Total         |  | 1,190,476 |  |  |          | 

37

---

Stock Options

Our board of directors authorized or ratified the issuances of
the options set forth in the table below and the issuance of one common share
upon the due exercise of each option in accordance with its terms and the
receipt by us of the designated exercise price payable in respect of the share
prior to the time of expiry on the designated expiry date.

As at December 31, 2017, we had the following outstanding stock
options:

|Number of Stock     |  |                    |  |   |                |  |  |                         | 
|------------------- |  | ------------------ |  | - | -------------- |  |  | ----------------------- | 
|Options Outstanding |  | Number Exercisable |  |   | Exercise Price |  |  | Expiry Date             | 
|73,675              |  | 73,675             |  | $ | 7.50           |  |  | April 8, 2023           | 
|1,166               |  | 1,166              |  | $ | 7.50           |  |  | May 23, 2023            | 
|6,666               |  | 5,555              |  | $ | 15.30          |  |  | January 29, 2024        | 
|13,332              |  | 11,110             |  | $ | 18.90          |  |  | March 6, 2024           | 
|264,127             |  | 220,106            |  | $ | 10.35          |  |  | April 17, 2024          | 
|215,758             |  | 179,798            |  | $ | 8.34           |  |  | May 27, 2024            | 
|85,000              |  | 56,666             |  | $ | 23.44          |  |  | April 1, 2025           | 
|29,000              |  | 18,729             |  | $ | 28.05          |  |  | May 27, 2025            | 
|220,859             |  | 115,030            |  | $ | 19.33          |  |  | November 19,
      2025 | 
|6,000               |  | 2,625              |  | $ | 10.39          |  |  | March 1, 2026           | 
|3,000               |  | 1,188              |  | $ | 14.10          |  |  | May 1, 2026             | 
|295,459             |  | 116,953            |  | $ | 13.98          |  |  | May 27, 2026            | 
|2,000               |  | 750                |  | $ | 14.57          |  |  | June 1, 2026            | 
|3,000               |  | 1,063              |  | $ | 11.44          |  |  | July 4, 2026            | 
|1,000               |  | 313                |  | $ | 17.00          |  |  | September 1,
      2026 | 
|1,000               |  | 292                |  | $ | 19.43          |  |  | October 3, 2026         | 
|11,000              |  | 2,979              |  | $ | 18.57          |  |  | November 1, 2026        | 
|137,862             |  | 37,338             |  | $ | 9.20           |  |  | November 9, 2026        | 
|1,000               |  | -                  |  | $ | 8.21           |  |  | April 3, 2027           | 
|53,000              |  | -                  |  | $ | 6.36           |  |  | October 2, 2027         | 
|65,500              |  | -                  |  | $ | 9.89           |  |  | November 1, 2027        | 
|253,578             |  | -                  |  | $ | 12.22          |  |  | November 9, 2027        | 
|4,000               |  | -                  |  | $ | 14.37          |  |  | December 1, 2027        | 
|Total: 1,746,982    |  | Total: 845,336     |  |   |                |  |  |                         | 

Deferred Share Units

Our shareholders approved the 2014 Deferred Share Unit Plan, or
the 2014 DSU Plan, on May 27, 2014 and the reservation for issuance of up to
66,667 common shares under the plan. Deferred share units, or DSUs, granted
under the 2014 DSU Plan were equity-settled. There were no DSUs issued during
the year ended December 31, 2016. A total of 51,788 DSUs were outstanding under
this plan as at December 31, 2016 and March 8, 2017.

The board of directors approved a new cash-settled DSU plan, or
the Cash-Settled DSU Plan, on November 9, 2016 and granted 47,614 DSUs for the payment of directors fees that
will ultimately be cash-settled. On March 9, 2017 the board of directors amended
the terms of all outstanding equity-settled DSUs to be settled in cash. The 2014
DSU Plan was subsequently terminated resulting in a reclassification of $414
from contributed surplus to accrued liabilities and the Cash-Settled DSU Plan
continues as our only DSU plan. On November 9, 2017, 46,187 DSUs were granted
for payment of directors fees. The fair values of DSUs under this plan as at
December 31, 2017 and 2016 were $1,349 and $362, respectively. As at December
31, 2017, there were 145,589 DSUs outstanding under this plan.

38

---

Prior Sales

The following table summarizes details of each class of
securities that is outstanding but not listed or quoted on a marketplace issued
by the Company during the year ended December 31, 2017.

Date of Issuance
    Price per Security or
      Exercise Price as Applicable
    Number of and
      Description of SecuritiesApril 3, 2017
    $8.21
    1,000
      Options(1)June 1, 2017
    U.S.$5.00
    2,750,000 Common
      shares(2)June 1, 2017
    U.S.$5.00
    3,250,000 Series II Preferred
      Shares(2)June 28, 2017
    U.S.$5.00
    199,674 Common
      shares(2)October 2, 2017
    $6.36
    53,000
      Options(1)November 1, 2017
    $9.89
    65,500
      Options(1)November 9, 2017
    $12.22
    253,578
      Options(1)December 1, 2017
    $14.37
    4,000
      Options(1)December 1, 2017
    U.S.$8.50
    1,950,000 Common
      shares(3)December 1, 2017
    U.S.$8.50
    400,000 Series II Preferred
      Shares(3)


Note:

|(1) | Issued under the 2016 Stock Option Plan.                                                                             
|--- | ---------------------------------------------------------------------------------------------------------------------
|(2) | Issued in an underwritten public offering of common shares and Series
      II Preferred Shares in the United States.
|(3) | Issued in a private placement offering of common shares and Series II
      Preferred Shares in the United States.   

MARKET FOR SECURITIES

We are listed on the TSX and on NASDAQ under the symbol TRIL.
The following table shows the price ranges and volumes traded on the TSX and
NASDAQ for the periods noted:

Month
    TSX
    NASDAQHigh ($)
    Low ($)
    Volume (#)
    High (US$)
    Low (US$)
    Volume (#)December 2017
    $ 14.840
    $ 13.500
    373,330
    $ 11.600
    $ 10.400
    3,668,810November 2017
    $ 15.680
    $ 9.980
    721,421
    $ 13.300
    $ 7.750
    4,700,237October 2017
    $ 9.890
    $ 6.270
    265,105
    $ 7.750
    $ 4.901
    2,815,763September 2017
    $ 6.520
    $ 5.450
    85,167
    $ 5.350
    $ 4.450
    1,337,546August 2017
    $ 6.140
    $ 5.260
    93,533
    $ 4.950
    $ 4.150
    602,277July 2017
    $ 6.290
    $ 5.390
    55,808
    $ 5.050
    $ 4.150
    631,676June 2017
    $ 6.890
    $ 5.600
    80,163
    $ 5.050
    $ 4.300
    1,457,332May 2017
    $ 8.770
    $ 6.570
    136,801
    $ 6.400
    $ 4.975
    1,306,809April 2017
    $ 9.300
    $ 7.910
    136,543
    $ 6.950
    $ 5.850
    914,112March 2017
    $ 9.300
    $ 7.440
    213,912
    $ 7.100
    $ 5.505
    1,345,793February 2017
    $ 9.010
    $ 6.150
    418,307
    $ 6.900
    $ 4.700
    2,357,995January 2017
    $ 8.180
    $ 5.900
    323,944
    $ 6.300
    $ 4.500
    1,950,986


39

---

BOARD OF DIRECTORS AND MANAGEMENT

The following table and summary of business experience set
forth the name, office held, and functions and areas of experience in the
Company, principal business activities and other principal directorships of each
of our directors and senior management:

NamePresent Office HeldProvince/State andCountry of ResidencePosition Held Since
    
    Principal Business Activities, Other Principal
      Directorships and FunctionLuke
      Beshar Director(1)New Jersey, USA
      March 10, 2014
    
    Mr. Beshar is an independent biotechnology consultant and
      financial expert. He was most recently the Executive/Senior Vice President
      and Chief Financial Officer of NPS Pharmaceuticals, Inc., a global
      biopharmaceutical company from November 2007 to February 2015. Mr. Beshar
      also sits on the boards of REGENXBIO Inc. and Entera Bio Ltd.
      As an independent director, Mr. Beshar supervises our
      management and helps to ensure compliance with our corporate governance
      policies and standards.Henry
    Friesen Director(1)(2)Manitoba, Canada
      June 28, 2011
    
    Dr. Friesen is a Distinguished University Professor
      Emeritus at University of Manitoba since October 2000.
      As an independent director, Dr. Friesen supervises our
      management and helps to ensure compliance with our corporate governance
      policies and standards.Robert Kirkman Director(1)(3)Washington, USA December 17, 2013
    
    Dr. Kirkman was the President and Chief Executive Officer
      and director of Cascadian Therapeutics (formerly Oncothyreon Inc.), an
      oncology-focused biotechnology company from September 2006 to January
      2016.
      As an independent director, Dr. Kirkman supervises our
      management and helps to ensure compliance with our corporate governance
      policies and standards.Michael Moore Director(2)(3)Surrey, UK April 9, 2013
    
    Dr. Moore was the Founder Chair and is a director of
      MISSIONTherapeutics Ltd. since 2012, is a director of Chronos
      Therapeutics Ltd since 2009 and was the Chair of Trillium Privateco from
      2004-2013. From 2003-2008, Dr. Moore was the Chief Executive Officer and
      director of Piramed Ltd., a UK-based oncology company acquired by Roche.
      As an independent director, Dr. Moore supervises our
      management and helps to ensure compliance with our corporate governance
      policies and standards.Thomas Reynolds Director(2)(3)Washington, USAMarch 10, 2014
    
    Dr. Reynolds is an independent biotechnology consultant
      since February 2013, and was Chief Medical Officer of Seattle Genetics,
      Inc., a biotechnology company focused on antibody-based therapies for the
      treatment of cancer from March 2007 to January 2013. Dr. Reynolds also
      sits on the board of MEI Pharma, Inc.As an independent
      director, Dr. Reynolds supervises our management and helps to ensure
      compliance with our corporate governance policies and standards.


40

---

Calvin Stiller Director, Chair of the Board
        Ontario, Canada
      July 18, 2011
    
    Dr. Stiller is the Chair Emeritus of the Ontario Institute for Cancer
        Research and Professor Emeritus at Western University. Dr. Stiller also
        sits on the boards of Revera Corporation and Smarter Alloys Inc.
      As an independent director, Dr. Stiller supervises our management and
        helps to ensure compliance with our corporate governance policies and
    standards.Helen Tayton-Martin Director(1)(2)
      Berkshire, UK October 1, 2017
    
    Dr. Tayton-Martin is the Chief Business Officer at Adaptimmune
      Therapeutics since March 2017, a biotechnology company focused on cancer
      immunotherapy and a leader in T-cell therapy. Dr. Tayton-Martin co-founded
      Adaptimmune from the former company, Avidex Limited, and served as its
      Chief Operating Officer from 2008 to March 2017.
      As an independent director, Dr. Tayton-Martin supervises our management
      and helps to ensure compliance with our corporate governance policies and
      standards.Niclas
      Stiernholm President and Chief Executive Officer,
      Director Ontario, Canada Director since July 18, 2011;
      President and CEO since April 9, 2013
    
    Dr. Stiernholm is the President and Chief Executive Officer of Trillium
      since April 9, 2013 and was the Chief Executive Officer of Trillium
      Therapeutics Inc. (private) since 2002. He joined Trillium from YM
      BioSciences Inc. where he was Executive Vice President and Chief
      Scientific Officer. Mr. Stiernholm also sits on the board of Vasomune
      Therapeutics Inc.
      As President and Chief Executive Officer, Dr. Stiernholm is responsible
      for overseeing our strategic direction, executing business development
      plans and ensuring that our scientific programs remain funded and advance
      on schedule. As a director, Dr. Stiernholm participates in management
      oversight and helps to ensure compliance with our corporate governance
      policies and standards.Robert Uger Chief Scientific Officer Ontario,
      Canada
      April 9, 2013
    
    Dr. Uger is the Chief Scientific Officer of Trillium since April 9, 2013 and was the Vice President, Research of Trillium Privateco prior thereto from 2003.
      As Chief Scientific Officer, Dr. Uger is responsible for developing and
      implementing our scientific direction, and oversees both internal product
      development and external research and development programs.James Parsons Chief Financial Officer Ontario,
      Canada
      August 25, 2011
    
    Mr. Parsons is the Chief Financial Officer of Trillium since August 25,
      2011 and was also the Director, Finance of Trillium Privateco. He was
      previously the Vice President, Finance of DiaMedica Inc. from October 2010
      to May 2014. Mr. Parsons sits on the board of Sernova Corp and DiaMedica
      Therapeutics, Inc.
      As Chief Financial Officer, Mr. Parsons is responsible for financial
      and risk management, investor relations, corporate governance and
      administration.Penka Petrova Chief Development Officer Ontario,
      Canada
      May 29, 2015
    
    Dr. Petrova is the Chief Development Officer of Trillium since May 29,
      2015 and was the Vice President, Drug Development from April 2013 to May
      2015. Dr. Petrova joined Trillium Privateco in 2003.
      As Chief Development Officer, Dr. Petrova is responsible for managing
      our formal drug development efforts, including all outsourced activities
      to contract manufacturers and contract research organizations.Eric Sievers Senior Clinical Advisor Washington,
      USA
      April 1, 2015
    
    Dr.
      Sievers was the Chief Medical Officer of Trillium from April 1, 2015 to
      January 10, 2018 when he transitioned to a consulting role as Senior
      Clinical Advisor. He previously held several senior roles at Seattle
      Genetics including the Senior Vice President, Clinical Development from
      October 2013 to March 2015, the Vice President and Interim Chief Medical
Officer from 2012 to October 2013, and Vice President, Clinical Affairs from 2011 to 2012, and Executive Medical
    Director from 2010 to 2011. As Chief Medical Officer, Dr. Sievers was responsible for the design
      and execution of our clinical and regulatory strategy.


41

---

| |  | 
| |  | 

Notes:

| | (1) | Current member of our audit committee.                              
| | --- | --------------------------------------------------------------------
| | (2) | Current member of our corporate governance and nominating committee.
| | (3) | Current member of our compensation committee.                       

Directors are elected annually and hold office until a
successor is elected at a subsequent annual meeting of the Company, unless a
directors office is earlier vacated in accordance with the by-laws of the
Company.

As at December 31, 2017, the directors and senior officers of
the Company, as a group, beneficially owned, directly or indirectly, 150,128
common shares of the Company constituting approximately 1.14% of the issued and
outstanding common shares.

CEASE TRADE ORDERS, BANKRUPTCIES, PENALTIES OR SANCTIONS

Cease Trade Orders

To the knowledge of the Company, no director or executive
officer of the Company is, or within the ten years prior to the date hereof has
been, a director, chief executive officer, or chief financial officer, of any
company (including the Company) that was subject to (a) a cease trade order; (b)
an order similar to a cease trade order; or (c) an order that denied the
relevant company access to any exemption under securities legislation, that was
in effect for a period of more than thirty consecutive days, issued while that
person was acting in such capacity or issued thereafter but resulted from an
event that occurred while that person was acting in such capacity.

Bankruptcies

To the knowledge of the Company, no director or executive
officer or shareholder holding a sufficient number of securities of the Company
to affect materially the control of the Company is, or within the ten years
prior to the date hereof has been, a director or executive officer of any
company (including the Company) that, while that person was acting in such
capacity or within a year of that person ceasing to act in such capacity, became
bankrupt, made a proposal under any legislation relating to bankruptcy or
insolvency or was subject to or instituted any proceedings, arrangement or
compromise with creditors or had a receiver, receiver manager or trustee
appointed to hold its assets.

To the knowledge of the Company, no director or executive
officer or shareholder holding a sufficient number of securities of the Company
to affect materially the control of the Company has, within the ten years prior
to the date hereof, become bankrupt, made a proposal under any legislation
relating to bankruptcy or insolvency, or become subject to or instituted any
proceedings, arrangement, or compromise with creditors, or had a receiver,
receiver manager or trustee appointed to hold that person's assets.

Penalties and Sanctions

No director or executive officer of the Company, or a
shareholder holding a sufficient number of securities of the Company to affect
materially the control of the Company has been subject to (a) any penalties or
sanctions imposed by a court relating to securities legislation or by a
securities regulatory authority or has entered into a settlement agreement with
a securities regulatory authority; or (b) any other penalties or sanctions
imposed by a court or regulatory body that would likely be considered important
to a reasonable investor in making an investment decision.

All of the above disclosure also applies to any personal
holding companies of any of the persons referred to above.

42

---

CONFLICTS OF INTEREST

Certain of our officers and directors are also officers and/or
directors of other companies engaged in the biotechnology industry and research
business generally. As a result, situations arise where the interest of such
directors and officers conflict with their interests as directors and officers
of other companies. The resolution of such conflicts is governed by applicable
corporate laws, which require that directors act honestly, in good faith and
with a view to the best interests of the Company. In addition, the OBCA, our
governing statute, requires our officers and directors to disclose any personal
interest which they may have in any material contract or transaction which is
proposed to be entered into with the Company and, in the case of directors, to
abstain from voting as a director for the approval of any such contract or
transaction, unless otherwise permitted under the OBCA.

LEGAL PROCEEDINGS

We are and were not a party to, and none of our property or
assets are or were subject to, any material legal proceedings during the last
financial year, nor to our knowledge are any such proceedings contemplated.

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Except as provided herein, there are no material interests,
direct or indirect, of directors, executive officers, any shareholders who
beneficially own, or controls or directs, directly or indirectly, more than 10%
of our outstanding common shares, or any known associates or affiliates of such
persons, in any transaction within the last three completed financial years or
during the current financial year which has materially affected or is reasonably
expected to materially affect the Company.

INTEREST OF EXPERTS

Our auditors are Ernst & Young LLP, Chartered Professional
Accountants, Licensed Public Accountants, Toronto, Ontario, Canada. Our
consolidated financial statements as at December 31, 2017 and 2016 have been
audited by Ernst & Young LLP, Independent Registered Public Accounting Firm,
as indicated in their report dated March 8, 2018. Ernst & Young LLP has been
the Companys auditors since inception on March 31, 2004.

Ernst & Young LLP has advised that they are independent
with respect to the Company within the meaning of the Rules of Professional
Conduct of the Chartered Professional Accountants of Ontario (registered name of
the Institute of Chartered Accountants of Ontario) and the rules and standards
of the Public Company Accounting Oversight Board (United States) and the
securities laws and regulations administered by the United States Securities and
Exchange Commission.

TRANSFER AGENT

Our registrar and transfer agent is Computershare Trust Company
of Canada, located at 100 University Avenue, Toronto, Ontario, M5J 2Y1.

MATERIAL CONTRACTS

There are no other contracts, other than those disclosed in
this AIF and those entered into in the ordinary course of our business, that are
material to us and which were entered into in the last completed fiscal year or
which were entered into before the most recently completed fiscal year but are
still in effect as of the date of this AIF:

| | 1. | License Agreement between Trillium Privateco, UHN and HSC
      dated February 1, 2010 pursuant to which we licensed intellectual property
      relating to methods and compounds for the modulation of the SIRPα-CD47
      interaction for therapeutic cancer applications. The license agreement
      requires us to use commercially reasonable efforts to commercialize the
      licensed technology. The license agreement will terminate on a
      country-by-country basis, in countries where a valid claim exists, when
      the last valid claim expires in such country, or if no valid claim exists,
      when the last valid claim expires in the U.S. We paid an up-front license
      fee of $150 and committed to pay an annual maintenance fee of $25, as well
      as payments on patent issuances, development milestone payments ranging
      from $100 to $300 on the initiation of phase I, II and III clinical trials
      respectively, and payments upon the achievement of certain
  regulatory milestones as well as royalties of either 3% or 1%
of net revenues on commercial sales. The regulatory milestone payments amount to
$1 million on each of the submission of a first BLA in the U.S. and receipt of
first regulatory approval in the U.S. and proportionate payments in other
territories worldwide. The aggregate milestones payable on their first
achievement under the agreement in the major markets of the U.S., Europe and
Asia combined are $5,660. Under the license agreement, Trillium is required to
pay 20% of any sublicensing revenues to the licensors on the first $50,000 of
sublicensing revenues, and pay 15% of any sublicensing revenues to the licensors
after the first $50,000 of sublicensing revenue received.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

43

---

| | 2. | GPEx®-Derived Cell Line Sale Agreement between Trillium
      Therapeutics Inc. and Catalent Pharma Solutions, LLC dated August 12, 2014
      pursuant to which we acquired the right to use the GPEx® expression system
      for the manufacture of TTI-621 (SIRPαFc). Consideration for the license
      includes potential pre-marketing approval milestones of up to US$875 and
      aggregate sales milestone payments of up to US$28,750. 
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 3. | GPEx®-Derived Cell Line Sale Agreement between Trillium
      Therapeutics Inc. and Catalent Pharma Solutions, LLC dated August 12, 2014
      pursuant to which we acquired the right to use the GPEx® expression system
      for the manufacture of TTI-622 (SIRPαFc). Consideration for the license
      includes potential pre-marketing approval milestones of up to US$875 and
      aggregate sales milestone payments of up to US $28,750.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 4. | Share purchase agreement among the Company, Fluorinov and
      Fluorinov shareholders dated January 26, 2016 pursuant to which we
      purchased all of the issued and outstanding shares in the capital of
      Fluorinov. See General Development of the Business  3 Year Summary.                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 5. | Royalty agreement among the Company, Fluorinov and
      Fluorinov shareholders dated January 26, 2016 which sets out contingent
      future royalty payments. See the discussion in the section of this AIF
      entitled General Development of the Business  3 Year Summary.                                                                                                                                                                

AUDIT COMMITTEE INFORMATION

Audit Committee

The Charter of the Audit Committee is attached hereto as
Schedule A. The purpose of our audit committee is to assist our Board in:

| |  | overseeing the integrity of our financial statements and
      our accounting and financial reporting processes and financial statement
      audits;                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                
| |  | overseeing our compliance with legal and regulatory
      requirements;                                                                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                
| |  | overseeing the qualifications and independence of our
      registered public accounting firm (independent auditor);                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                
| |  | overseeing the performance of our independent auditor;
      and                                                                                                                                                                                               
| |   |                                                                                                                                                                                                                                                                
| |  | overseeing the design, implementation and ongoing
      effectiveness of our systems of disclosure controls and procedures, risk
      management systems, internal control over financial reporting and
      compliance with ethical standards adopted by us.

Composition of the Audit Committee

Our audit committee is comprised of a minimum of three members,
each of whom, in the determination of our board of directors, satisfies the
independence, financial literacy and experience requirements of applicable U.S.
and National Instrument 52- 110 Audit Committees (NI 52-110),
rules and guidelines, any applicable stock exchange requirements or guidelines
and any other applicable regulatory rules.

44

---

In particular:

| |  | each member shall be (a) an Independent Director, as
      defined in NASDAQ Stock Market Rule 5605(a)(2), and (b) independent
      within the meaning of Rule 10A-3 under the Exchange Act, and the
      determination of independence will be affirmatively made by our board
      annually, provided that our board may elect to take advantage of any
      exemption from such requirements provided in the rules of NASDAQ or the
      Exchange Act;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |  | each member shall meet the independence and financial
      literacy requirements set forth in Canadian NI 52-110;                                                                                                                                                                                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |  | each member shall not have participated in the
      preparation of the financial statements of ours (or any then current
      subsidiary of ours) at any time during the past three years;                                                                                                                                                                                                                                                                      
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |  | each member shall be able to read and understand
      fundamental financial statements in accordance with the audit committee
      requirements for companies listed on NASDAQ in NASDAQ Stock Market Rule
      5605(c)(2)(A)(iv); and                                                                                                                                                                                                                         

at least one (1) member shall, in the judgment of our board, be
an audit committee financial expert within the meaning of such term in Item
407(d) of Regulation S-K under the United States Securities Act of 1933.

Our current audit committee members are Mr. Luke Beshar
(chair), Dr. Henry Friesen, Dr. Helen Tayton-Martin and Dr. Robert Kirkman, each
of whom is a non-executive member of our Board. Our Board has determined that
each of the members of our audit committee is financially literate and has
sufficient financial expertise, and is independent within the meaning of such
term in the rules of NASDAQ, the SEC and Canadian provincial securities
regulatory authorities. Our Board has determined that Mr. Luke Beshar is a
financial expert in accordance with the rules and regulations of the SEC.

Relevant Education and Experience

The following describes the education and experience of each
audit committee member that is relevant in the performance of his
responsibilities as an audit committee member:

Luke Beshar, CPA- Director, Chair of the
Audit Committee

Mr. Beshar was Executive Vice President and Chief Financial
Officer of NPS Pharmaceuticals until February 2015 when the company was sold to
Shire plc. He joined NPS Pharmaceuticals in 2007 and has been responsible for
financial management, investor relations, information technology, technical
operations, supply-chain management, facilities, project management, contracts
and outsourcing and strategic and alliance management. Prior to joining NPS, Mr.
Beshar served as Executive Vice President and Chief Financial Officer of Cambrex
Corporation, a global life sciences company. Mr. Beshar began his career with
Arthur Andersen & Co. and is a certified public accountant.

He obtained his bachelors degree in Accounting and Finance
from Michigan State University and is a graduate of The Executive Program at the
Darden Graduate School of Business at the University of Virginia.

Dr. Henry Friesen- Director

Dr. Friesen was the President of the Canadian Governments
Medical Research Council, and the architect and lead champion for the creation
the Canadian Institutes for Health Research, President of the National Cancer
Institute of Canada and President of the Canadian Society for Clinical
Investigation. He is the Past Founding Chair of Genome Canada. A Fellow of the
Royal Society of Canada, Dr. Friesen was named a Companion of the Order of
Canada and was inducted into the Canadian Medical Hall of Fame in 2001 and,
later the Order of Manitoba. He was also awarded the Gairdner Foundation
Wightman Award, the McLaughlin Medal of the Royal Society of Canada, and the
Koch Medal, the highest award of the Endocrine Society. He was presented with
the Frederic Newton Gisborne Starr Award by the Canadian Medical Association,
the associations highest award, in 2006. Dr. Friesen also holds eight Honorary
Doctorates from Canadian universities.

45

---

Dr. Robert Kirkman- Director

Dr. Kirkman served as Oncothyreons President and Chief
Executive Officer from September 2006 to January 2016. From 2005 to 2006, he was
acting President and Chief Executive Officer of Xcyte Therapies, which concluded
a merger with Cyclacel Pharmaceuticals, both development-stage biopharmaceutical
companies, in March of 2006. From 2004 to 2005, Dr. Kirkman was Chief Business
Officer and Vice President of Xcyte. From 1998 to 2003, Dr. Kirkman was Vice
President, Business Development and Corporate Communications of Protein Design
Labs, a biopharmaceutical company. Dr. Kirkman holds a M.D. degree from Harvard
Medical School and a B.A. in economics from Yale University.

Dr. Helen Tayton-Martin- Director

Dr.
Tayton-Martin serves as the Chief Business Officer at Adaptimmune and has over
25 years of experience working within the pharma, biotech and consulting
environment in disciplines across preclinical and clinical development,
outsourcing, strategic planning, due diligence and business development. Dr.
Tayton-Martin transitioned to become Adaptimmune's Chief Business Officer in
March 2017, having served as its Chief Operating Officer since 2008, a role in
which she oversaw the transition of all operations in the company from 5 to 300
staff, through transatlantic growth, multiple clinical, academic and commercial
collaborations and private and public financing through to its NASDAQ IPO.

Audit Committee Oversight

Since the commencement of our most recently completed fiscal
year and adoption of the audit committee charter, the Board has not failed to
adopt a recommendation of the audit committee to nominate or compensate an
external auditor.

Pre-Approval Policies and Procedures

The audit committee has adopted specific policies and
procedures for the engagement of audit and non-audit services as set out in our
Auditor Services Pre-Approval Policy. Pursuant to the Policy, the audit
committee on an annual basis may approve the provision of a specified list of
audit and permitted non-audit services that the audit committee believes to be
typical, reoccurring or otherwise likely to be provided by the external auditor
during the then current fiscal year. All pre-approvals granted under this Policy
shall be sufficiently detailed as to the particular services being provided that
it will not be necessary for management of Trillium to exercise any discretion
in determining whether a particular service has been pre-approved.

In addition, pursuant to the Policy the audit committee has
delegated its pre-approval authority to the Chair of the audit committee for
services where the aggregate fees are estimated to be less than or equal to Cdn.
$50,000. The Chair of the audit committee is required to report any such granted
pre-approvals to the audit committee at its next scheduled meeting. The audit
committee shall not delegate to management the audit committee's
responsibilities for pre-approving audit and non-audit services to be performed
by the external auditor.

Pursuant to the Policy, there is an exception to the
pre-approval requirements for permitted non-audit services, provided all such
services were not recognized at the time of the engagement to be non-audit
services and, once recognized, are promptly brought to the attention of the
audit committee and approved prior to the completion of the audit. The aggregate
amount of all services approved in this manner may not constitute more than five
percent of the total fees paid to the external auditor during the fiscal year in
which the services are provided.

External Auditors Service Fees (By Category)

The aggregate fees billed and accrued by our external auditor
in the last two fiscal years for auditor service fees were as follows:

|Financial Year Ending |   | **Audit Fees(1)** |  |  | Audit Related**Fees(2)** |  |   | **Tax Fees(3)** |  |  | **All Other Fees(4)** | 
|--------------------- | - | ----------------- |  |  | ------------------------ |  | - | --------------- |  |  | --------------------- | 
|                      |   |                   |  |  |                          |  |   |                 |  |  |                       | 
|December 31, 2017     | $ | 296,000           |  |  | Nil                      |  | $ | 8,048           |  |  | Nil                   | 
|December 31, 2016     | $ | 240,000           |  |  | Nil                      |  | $ | 22,285          |  |  | Nil                   | 

46

---

Notes:

| | (1) | Audit fees are the aggregate fees billed by Ernst &
      Young LLP for the audit of Trilliums consolidated annual financial
      statements, reviews of interim financial statements and attestation
      services that are provided in connection with statutory and regulatory
      filings or engagements. During 2017, the services also consisted of fees
      related to the filing of a base shelf prospectus and a prospectus
      financing.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Audit-related fees are fees charged by Ernst &
      Young LLP for assurance and related services that are reasonably related
      to the performance of the audit or review of the Trilliums financial
      statements and are not reported under Audit Fees.                                                                                                                                                                                         
| | (3) | Tax fees are fees billed by Ernst & Young LLP for
      tax compliance and tax advice.                                                                                                                                                                                                                                                                                                                                                                      
| | (4) | All other fees are fees billed by Ernst & Young LLP
      for services not described above.                                                                                                                                                                                                                                                                                                                                                                 

ADDITIONAL INFORMATION

Additional information about us may be found on SEDAR at
www.sedar.com. Additional information, including directors and officers
remuneration and indebtedness, principal holders of our securities, options to
purchase securities and securities authorized for issuance under equity
compensation plans, is contained in our Management Information Circular for our
most recent annual meeting of shareholders. Additional information may also be
found in our audited financial statements and related managements discussion
and analysis for our most recently completed financial year.

47

---

SCHEDULE A

TRILLIUM THERAPEUTICS INC.

CHARTER OF THE AUDIT COMMITTEEOF THE BOARD OF
DIRECTORS

POWER, AUTHORITY AND PURPOSE OF THE COMMITTEE

The purpose of the Audit Committee (the Committee) of the
Board of Directors (the Board) of Trillium Therapeutics Inc. (together with
its subsidiaries,the Company) is to assist the Board in:

| |  | Overseeing the integrity of the Companys financial
      statements and the Companys accounting and financial reporting processes
      and financial statement audits.                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                    
| |  | Overseeing the Companys compliance with legal and
      regulatory requirements.                                                                                                                                                                                                  
| |   |                                                                                                                                                                                                                                                                                    
| |  | Overseeing the qualifications and independence of the
      Companys registered public accounting firm (independent auditor).                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                    
| |  | Overseeing the performance of the Companys independent
      auditor.                                                                                                                                                                                                             
| |   |                                                                                                                                                                                                                                                                                    
| |  | Overseeing the design, implementation and on-going
      effectiveness of the Companys systems of disclosure controls and
      procedures, risk management systems, internal control over financial
      reporting and compliance with ethical standards adopted by the Company.

The operation of the Committee shall be subject to the Bylaws
of the Company, as in effect from time to time, and the rules and regulations
promulgated by the Ontario Securities Commission, the Toronto Stock Exchange,
the U.S. Securities and Exchange Commission (SEC) and the NASDAQ Stock Market
LLC (NASDAQ), as in effect from time to time. The Committee shall have the
full power and authority to carry out the duties and responsibilities listed
below.

While the Committee has the responsibilities and powers set
forth in this charter (this Charter), it is not the duty of the Committee to
plan or conduct audits or to determine that the Companys financial statements
are complete and accurate and are in accordance with generally accepted
accounting principles. Management is responsible for preparing the Companys
financial statements, and the Companys independent auditor is responsible for
auditing those financial statements.

The Committee has the authority to undertake the specific
duties and responsibilities listed below and such other duties as the Board may
from time to time prescribe. It is acknowledged, however, that all of the areas
of oversight listed below may not be relevant to all of the matters and tasks
that the Committee may consider and act upon from time to time, and the members
of the Committee in their judgment may determine the relevance thereof and the
attention such items will receive in any particular context.

The Committee shall have the power and authority to act
independently of management, conduct investigations into any matters within its
scope of responsibility, hire and obtain advice from its own outside legal,
accounting or other advisors who will report solely to the Committee, set and pay
the compensation for any advisors employed by the Committee and communicate
directly with internal and external auditors.

---

Committee members and the Committee Chair shall receive such
remuneration for their service on the Committee as the Board may determine from
time to time, on the recommendation of the Compensation Committee.

COMPOSITION

The Committee shall be comprised of a minimum of three members,
each of whom, in the determination of the Board, satisfies the independence,
financial literacy and experience requirements of applicable U.S. and Canadian
securities laws, rules and guidelines, any applicable stock exchange
requirements or guidelines and any other applicable regulatory rules.

In particular:

| | 1. | each member shall be (a) an Independent Director, as defined in
      NASDAQ Marketplace Rule 5605(a)(2), and (b) independent within the
      meaning of Rule 10A-3 under the Securities Exchange Act of 1934, as
      amended (the Exchange Act), and the determination of independence will
      be affirmatively made by the Board annually, provided that the Board may
      elect to take advantage of any exemption from such requirements provided
      in the NASDAQ rules or the Exchange Act;
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | 2. | each member shall meet the independence and financial literacy
      requirements set forth in Canadian National Instrument 52-110 Audit
      Committeesand such additional criteria for independence as the Board
      may establish;                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | 3. | each member shall not have participated in the preparation of the
      financial statements of the Company (or any then current subsidiary of the
      Company) at any time during the past three years;                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | 4. | each member shall be able to read and understand fundamental financial
      statements in accordance with the audit committee requirements for
      companies listed on NASDAQ in NASDAQ Marketplace Rule 5605(c)(2)(A)(iv);
      and                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | 5. | at least one (1) member shall, in the judgment of the Board, be an
      audit committee financial expert within the meaning of such term in Item
      407(d) of Regulation S-K of the SEC.                                                                                                                                                                                                                                                                                                                    

The chairperson of the Committee (the Chair) will be
appointed by the Board on the recommendation of the Corporate Governance and
Nominating Committee and will serve at the discretion of the Board, and all
members will serve at the pleasure of the Board, continuing as a member of the
Committee until resignation or replacement. The Board may fill vacancies on the
Committee by appointment, on the recommendation of the Corporate Governance and
Nominating Committee, from qualified members of the Board.

The designation of the Chair shall occur annually at the first
meeting of the Board after a meeting of shareholders at which Directors are
elected. If the Chair is not so designated, the Director who is then serving as
Chair shall continue as Chair until his or her successor is appointed.

COMMITTEE FUNCTION AND PROCESS

The Committee will meet at least once each fiscal quarter. The
Committee may establish its own schedule and call additional meetings as it
deems necessary to fulfill its responsibilities. The Committee shall fix its own
rules of procedure, which shall be consistent with the Bylaws of the Company and
this Charter. A majority of the Committee members, but not less than two, shall
constitute a quorum. Committee meetings may be attended in person or by
telephone or video conferencing or any other electronic means of communication
as permit all persons participating in the meeting to communicate with each other simultaneously
and instantaneously. The Committee may request that any directors, officers or
employees of the Company, or other persons whose advice and counsel are sought
by the Committee, attend any meeting to provide such information as the
Committee requests. The Committee may take action by unanimous written consent
when deemed necessary or desirable by the Committee or its Chair, subject to the
requirements of any applicable law, regulation or rule.

A - 2

---

Committee members may raise any subjects that are not set on
the agenda by the Committee Chair. Each regularly scheduled meeting will
conclude with an executive session of the Committee absent members of
management.

The Committee will meet separately with the Chief Executive
Officer and the Chief Financial Officer at such times as it deems appropriate to
review the financial affairs of the Company. The Committee will meet separately
with the independent auditor and without management present, at such times as it
deems appropriate, but not less than quarterly, to fulfill the responsibilities
of the Committee under this Charter.

The independent auditor shall receive notice of each meeting of
the Committee and shall be entitled to attend and be heard at any such meeting
at the Company's expense.

The Committee shall maintain copies of minutes of each meeting
and each written consent to action taken without a meeting, reflecting the
actions so authorized or taken by the Committee. After approval, the minutes
shall be signed by the Chair or Secretary of the meeting and a copy of the
minutes and all consents shall be placed in the Companys minute book.

The Committee will summarize its examinations and
recommendations to the Board as may be appropriate, consistent with this
Charter.

ROLE OF THE CHAIR

The Chairs primary role is to ensure that the Committee
functions properly, meets its obligations and responsibilities, fulfills its
purpose and that its organization and mechanisms are in place and working
effectively. More specifically, the Chair shall:

| | 1. | chair meetings of the Committee;                                                                                                                                                                                                                                                                                                                                                              
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                               
| | 2. | in consultation with the Chair of the Board, the members,
      and the Chief Financial Officer, set the agendas for the meetings of the
      Committee;                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                               
| | 3. | in collaboration with the Chair of the Board, the Chief
      Executive Officer, and the Chief Financial Officer, ensure that agenda
      items for all Committee meetings are ready for presentation and that
      adequate information is distributed to members in advance of such meetings
      in order that members may properly inform themselves on matters to be
      acted upon;
| |    |                                                                                                                                                                                                                                                                                                                                                                                               
| | 4. | assign work to members;                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                               
| | 5. | act as liaison and maintain communication with the Chair
      of the Board and the Board to optimize and co- ordinate input from
      directors, and to optimize the effectiveness of the Committee; and                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                               
| | 6. | provide leadership to the Committee with respect to its
      functions as described in this Charter and as otherwise may be
      appropriate.                                                                                                                                                                                                                                               

DUTIES AND RESPONSIBILITIES

The Committee shall:

| | 1. | Be responsible for overseeing the design, implementation
      and on-going effectiveness of policies and procedures for providing
      reasonable assurance regarding the reliability of financial reporting and
      the preparation of financial statements for external purposes in
      accordance with generally accepted accounting principles, including those policies and procedures that: (i)
pertain to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of the Company;
(ii) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company are
being made only in accordance with authorizations of management and directors of
the Company; and (iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition of the
Companys assets that could have a material effect on the financial
statements.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

A - 3

---

| | 2. | Periodically review the adequacy and effectiveness of the
      Companys system of internal control over financial reporting and
      disclosure controls and procedures, by meeting with the Companys
      management, the independent auditor and the Chair of the Disclosure
      Committee to review the adequacy and effectiveness of such controls; and
      review before its release the disclosure regarding such system of internal
      control and disclosure controls required to be contained in the Companys
      periodic filings and the attestations or reports by the independent
      auditor relating to such disclosure.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 3. | Review with the chief executive officer, the chief
      financial officer, and the independent auditor: (i) all significant
      deficiencies and material weaknesses in the design or operation of the
      Companys internal controls that could adversely affect the Companys
      ability to record, process, summarize and report financial information
      required to be disclosed by the Company in the reports that it files or
      submits with applicable securities regulators within the required time
      periods, and (ii) any fraud, whether or not material, that involves
      management of the Company or other employees who have a significant role
      in the Companys internal controls.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 4. | Be directly responsible, in its capacity as a committee
      of the Board and subject to the rights of shareholders and applicable law,
      for the selection, nomination, retention, termination and oversight of the
      work of any independent auditor (including the resolution of disagreements
      between management and the independent auditor regarding financial
      reporting) engaged for the purpose of preparing or issuing an audit report
      or performing other audit, review or attest services for the Company. The
      Committee shall recommend to the Board the independent auditor to be
      nominated for approval by the shareholders and the compensation of the
      independent auditor. Each such independent auditor shall report directly
      to the Committee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 5. | Pre-approve all audit services to be provided to the
      Company by the independent auditor, and pre-approve, or establish policies
      and procedures for the review and pre-approval of all permitted non-audit
      services to be provided to the Company by the independent auditor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 6. | Review and provide guidance with respect to the external
      audit and the Companys relationship with its independent auditor by (a)
      reviewing the independent auditors proposed audit plan (including scope,
      fees and schedule), approach and independence; (b) obtaining on a periodic
      basis, but no less frequently than annually, a formal written statement
      from the independent auditor delineating all relationships between the
      independent auditor and the Company concerning auditor independence; being
      actively engaged in dialogue with the independent auditor with respect to
      any disclosed relationship or services with the Company that may impact
      the objectivity and independence of the independent auditor, presenting
      this statement to the Board, and to the extent there are relationships,
      monitoring and investigating them; (c) taking, or recommending to the
      Board to take, appropriate action to oversee the independence of the
      independent auditor; (d) reviewing any publicly available inspection
      report on the independent auditor issued by the Public Company Accounting
      Oversight Board or the Canadian Public Accountability Board; (e)
      discussing with the Companys independent auditor the financial statements
      and audit findings, including any significant adjustments, management
      judgments and accounting estimates, significant new accounting policies
      and disagreements with management; (f) reviewing with both management and
      the independent auditor the appropriateness and acceptability of the
      Companys critical accounting policies and any proposed changes thereto;
      and (g) reviewing reports submitted to the audit committee by the
      independent auditor in accordance with the applicable regulatory
      requirements.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 7. | Review any problems experienced by the independent
      auditor in performing audits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 8. | Review and discuss with management and the independent
      auditor, and approve the annual audited financial statements and quarterly
      unaudited financial statements, including the Companys disclosures
  under Managements Discussion and Analysis of Financial
Condition and Results of Operations, prior to filing with regulatory
authorities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

A - 4

---

| | 9.  | Recommend to the Board the approval and filing of the
      annual audited financial statements.                                                                                                                                                                                                                                                                                                                                                                 
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 10. | Periodically review and discuss with the Chair of the
      Disclosure Committee the disclosures contained in the Companys filings
      with the regulatory authorities prior to filing and the processes and
      procedures followed to ensure the accuracy of such disclosure.                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 11. | Direct the Companys independent auditor to review before
      filing with all regulatory authorities the Companys interim financial
      statements, using professional standards and procedures for conducting
      such reviews.                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 12. | Review all material written communications between the
      independent auditor and management, including post audit or management
      letters containing recommendations of the independent auditor,
      managements response and follow up with respect to the identified
      weaknesses.                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 13. | Review before release any press release including annual
      and quarterly results or forecasts.                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 14. | Satisfy itself that adequate procedures are in place for
      the review of the Companys public disclosure of financial information
      extracted or derived from the Companys financial statements (including,
      without limitation, the use of pro forma or non-GAAP financial
      information), other than the public dissemination referred to in the
      foregoing paragraph, and periodically assess the adequacy of those
      procedures.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 15. | Oversee compliance with the regulatory requirements for
      disclosure of auditors services and audit committee members, member
      qualifications and activities.                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 16. | Review and reassess the adequacy of the Whistleblower
      Policy, the Auditor Services Pre-Approval Policy, and the Corporate
      Disclosure and Confidentiality Policy on at least an annual basis and
      recommend any proposed changes to the Board for approval.                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 17. | Review, in conjunction with counsel, any legal matters
      that could have a significant impact on the Companys financial
      statements.                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 18. | Engage, as appropriate, outside legal, accounting and
      other advisors, with (a) the authority to retain such counsel or other
      advisors as the Committee may deem appropriate in its sole discretion, and
      (b) the sole authority to determine funding, approve fees and retention
      terms for such counsel and advisors.                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 19. | Review and approve in advance any proposed related-party
      transactions, and report any such transactions to the Board.                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 20. | Review and reassess the adequacy of the Audit Committee
      charter, structure, processes and membership requirements on at least an
      annual basis and recommend any proposed changes to the Board for approval.                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 21. | Establish procedures for the receipt, retention and
      treatment of complaints received by the Company regarding accounting,
      internal accounting controls or auditing matters; and establish procedures
      for the confidential, anonymous submission by employees of the Company of
      concerns regarding questionable accounting or auditing matters.                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 22. | Review, approve and monitor the Companys investment
      policy, investment portfolio, cash management objectives, and exposure to
      market risk.                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 23. | Review the effectiveness of the Companys risk management
      system to assure that material risks are identified and appropriate risk
      management processes are in place.                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 24. | Review and discuss with management the Companys major
      financial risk exposures and the steps management has taken to monitor and
      control such exposures.                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 25. | Review with management and the external auditor the
      presentation and impact of significant risks and uncertainties associated
      with the Companys business, all alternative treatments of financial
      information with generally accepted accounting principles that have been
      discussed with management, the material assumptions made by management
      relating to them and their effect on the Companys financial statements.        

A - 5

---

| | 26. | Periodically review the Companys practices to maintain
      the security of its information technology systems.                                                                                                                                                                                                          
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                            
| | 27. | Ensure the regular rotation of the lead audit partner,
      the concurring partner and other audit partners engaged in the Companys
      annual audit to the extent required by applicable law.                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                            
| | 28. | Perform an evaluation of its performance at least
      annually to determine whether it is functioning effectively.                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                            
| | 29. | Establish, or review and approve, in accordance with
      applicable law, hiring policies for partners, employees or former partners
      and employees of the present and former independent auditor and oversee
      the hiring of any personnel from the independent auditor into positions
      within the Company.
| |     |                                                                                                                                                                                                                                                                                                                            
| | 30. | Obtain assurance from the independent auditor that
      disclosure to the Committee is not required pursuant to the provisions of
      the Exchange Act regarding the discovery of illegal acts by the
      independent auditor.                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                            
| | 31. | Review managements processes in place to prevent and
      detect fraud.                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                            
| | 32. | Review policies and practices with respect to off-balance
      sheet transactions and trading and hedging activities, and consider the
      results of any review of these areas by the independent auditor.                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                            
| | 33. | Review with the chief executive officer and the chief
      financial officer their certifications required to be included in periodic
      reports filed with securities regulators.                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                            
| | 34. | Perform any other activities consistent with this
      Charter, the Companys bylaws and governing laws that the Board or the
      Committee determines are necessary or appropriate.                                                                                                                                    

DELEGATION OF AUTHORITY

The Committee may, in accordance with law, delegate to one or
more independent members of the Committee the authority to pre-approve audit and
permitted non-audit services, provided that such pre-approval decision is
presented to the full Committee at its first scheduled meeting following such
pre-approval.

RESOURCES AND ADDITIONAL AUTHORITY OF THE COMMITTEE

The Committee shall have the resources and authority
appropriate to discharge its duties and responsibilities in accordance with this
Charter. Without limiting the generality of the foregoing, (i) the Committee
shall have the authority to retain or obtain advice and counsel from legal or
other advisors, including legal counsel or other advisors; (ii) the Committee
shall be directly responsible for the appointment, compensation and oversight of
the work of any legal counsel and other advisors retained by the Committee, and
in connection therewith, the Committee shall have the sole authority to approve
the advisors or counsels fees and other retention terms; and (iii) subject to
such funding either being included in an annual budget of the Company or
otherwise being approved by the Board, the Company shall provide appropriate
funding, for payment of (A) compensation to any independent auditor engaged for
the purpose of preparing or issuing an audit report or performing other audit,
review or attest services for the Company; (B) compensation to any legal counsel
or other advisors retained by the Committee; and (C) ordinary administrative
expenses of the Committee that are necessary or appropriate in carrying out its
duties.

A - 6

---