Company: FMST
Filing Date: 2025-06-20
Form Type: POS AM
Source: 0001171843-25-004006
Chunk: 56

Company: Foremost Clean Energy Ltd.
Filing Date: 2025-06-20
Form: POS AM
Chunk 56
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unded Warrants and Warrant Shares were sold on the last day of the last tax year for which
we were a PFIC. No such election, however, may be made with respect to the Common Share Purchase Warrants

Under proposed Treasury Regulations, if a U.S. Holder
has an option, warrant, or other right to acquire stock of a PFIC (such as the Common Share Purchase Warrants), such option, warrant or
right is considered to be PFIC stock subject to the default rules of Section 1291 of the Code. Under rules described below, the holding
period for the Warrant Shares will begin on the date a U.S. Holder acquires the Common Share Units. This will impact the availability
of the QEF Election and Mark-to-Market Election with respect to the Warrant Shares. Thus, a U.S. Holder will have to account for Warrant
Shares, Pre-Funded Warrants and common shares under the PFIC rules and the applicable elections differently.

QEF Election

A U.S. Holder that makes a timely and effective QEF
Election for the first tax year in which the holding period of its common shares or Pre-Funded Warrants begins generally will not be subject
to the rules of Section 1291 of the Code discussed above with respect to its common shares or Pre-Funded Warrants. However, a U.S. Holder
that makes a timely and effective QEF Election will be subject to U.S. federal income tax on such U.S. Holder’s pro rata share of
(a) our net capital gain, which will be taxed as long-term capital gain to such U.S. Holder, and (b) our ordinary earnings, which will
be taxed as ordinary income to such U.S. Holder. Generally, “net capital gain” is the excess of (a) net long-term capital
gain over (b) net short-term capital loss, and “ordinary earnings” are the excess of (a) “earnings and profits”
over (b) net capital gain. A U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such amounts for each
tax year in which we are a PFIC, regardless of whether such amounts are actually distributed to such U.S. Holder by us. However, for any
tax year in which we are a PFIC and have no net income or gain, U.S. Holders that have made a QEF Election would not have any income