Company: CMND
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005490
Chunk: 214

Company: Clearmind Medicine Inc.
Filing Date: 2025-01-22
Form: 20-F
Item: Item 10
Chunk 214
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, or produce, passive income.  
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For this purpose, passive income generally consists
of rents, dividends, interest, royalties, gains from the disposition of passive assets and gains from certain commodities and securities
transactions. Cash generally is treated as generating passive income. The value of goodwill is an active asset to the extent attributable
to activities that produce active income. The determination of whether a foreign corporation is a PFIC is based upon the composition
of such foreign corporation’s income and assets (including, among others, its proportionate share of the income and assets of any
other corporation in which it owns, directly or indirectly, 25% (by value) of the stock), and the nature of such foreign corporation’s
activities. A separate determination must be made after the close of each taxable year as to whether a foreign corporation was a PFIC
for that year.

As of the date hereof, we have not made a determination
as to our PFIC status for our current taxable year or any other taxable year. The tests for determining PFIC status are applied annually
after the close of the taxable year, and therefore our possible status as a PFIC may be subject to change. Further, because the value
of our goodwill may be determined based on the market value of the Common Shares, a decrease in the market value of the Common Shares
and/or an increase in cash or other passive assets would increase the relative percentage of our passive assets. The application of the
PFIC rules is subject to uncertainty in several respects and, therefore, no assurances can be provided that we will not be a PFIC for
any taxable year. If we are treated as a PFIC during a U. S. Holder’s holding period for Common Shares, we will, with respect to
such U. S. Holder, continue to be treated as a PFIC, regardless of whether we satisfied either of the qualification tests in subsequent
years, subject to certain exceptions.

If we currently are or become a PFIC, each U. S.
Holder who has not elected to mark the shares to market (as discussed below), would, upon receipt of certain “excess distributions”
by us and upon disposition of our Common Shares at a gain: (1) have such excess distribution or gain allocated ratably over the U. S.
Holder’s holding period for the Common Shares, as the case may be; (2) the amount allocated to the current