Company: EDSA
Filing Date: 2025-09-09
Form Type: 424B5
Source: 0001171843-25-005799
Chunk: 22

Company: Edesa Biotech, Inc.
Filing Date: 2025-09-09
Form: 424B5
Chunk 22
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 the extent of our current or accumulated
earnings and profits (as determined for U.S. federal income tax purposes) that are not allocated to excess distributions, and will not
be eligible for the reduced rates applicable to “qualified dividend income” with respect to such distribution.

U.S. Holders can avoid the adverse rules
described above in part by making a mark-to-market election with respect to the common shares, provided that the common shares are “marketable.”
The common shares will be marketable if they are “regularly traded” on a “qualified exchange” or other market
within the meaning of applicable Regulations. For this purpose, the common shares generally will be considered to be regularly traded
during any calendar year during which they are traded, other than in de minimisquantities, on at least 15 days during each calendar
quarter. The common shares are currently listed on the Nasdaq, which constitutes a qualified exchange; however, there can be no assurance
that the common shares will be treated as regularly traded for purposes of the mark-to-market election on a qualified exchange. If the
common shares were not regularly traded on the Nasdaq or were delisted from the Nasdaq and were not traded on another qualified exchange
for the requisite time period described above, the mark-to-market election would not be available.

A U.S. Holder that makes a mark-to-market
election must include in gross income, as ordinary income, for each taxable year an amount equal to the excess, if any, of the fair market
value of the U.S. Holder’s common shares at the close of the taxable year over the U.S. Holder’s adjusted tax basis in the
common shares. An electing U.S. Holder may also claim an ordinary loss deduction for the excess, if any, of the U.S. Holder’s adjusted
tax basis in the common shares over the fair market value of the common shares at the close of the taxable year, but this deduction is
allowable only to the extent of any net mark-to-market gains previously included in income. A U.S. Holder that makes a mark-to-market
election generally will adjust such U.S. Holder’s tax basis in the common shares to reflect the amount included in gross income
or allowed as a deduction because of such mark-to-market election. Gains from an actual sale or other disposition of the common shares
will be treated as ordinary income, and any losses incurred on a sale or other disposition of the common shares will be treated as ordinary