Company: EDSA
Filing Date: 2025-09-09
Form Type: 424B5
Source: 0001171843-25-005799
Chunk: 24

Company: Edesa Biotech, Inc.
Filing Date: 2025-09-09
Form: 424B5
Chunk 24
---
i) net long-term capital gain over (ii) 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 timely and effective QEF election
with respect to the Company generally (a) may receive a tax-free distribution from us to the extent that such distribution represents
“earnings and profits” that were previously included in income by the U.S. Holder because of such QEF election and (b) will
adjust such

U.S. Holder’s tax basis in the common shares to reflect the amount included
in income or allowed as a tax-free distribution because of such QEF election. In addition, a

U.S. Holder that makes a QEF election generally will recognize capital gain or loss
on the sale or other taxable disposition of common shares.

If a U.S. Holder does not make a timely
and effective QEF election for the first tax year in which its holding period of its common shares begins, the U.S. Holder may still be
able to make a timely and effective QEF election in a subsequent tax year if such U.S. Holder meets certain requirements and makes a “purging”
election to recognize gain (which will be subject to the adverse rules described above) as if such common shares were sold for their fair
market value on the day the QEF election is effective. If a U.S. Holder makes a QEF election but does not make a “purging”
election to recognize gain, as discussed in the preceding sentence, then such U.S. Holder shall continue to be subject to the adverse
PFIC consequences described above with respect to its common shares.

The QEF election is made on a holder-by-holder
basis. Once made, a QEF election will apply to the tax year for which the QEF election is made and to all subsequent tax years, unless
the QEF election is invalidated or terminated or the IRS consents to revocation of the QEF election. In addition, if a U.S. Holder makes
a QEF election, the QEF election will remain in effect (although it will not be applicable) during those tax years in which we are not
a PFIC.

Under Section 1291(f) of the Code, the
IRS has issued proposed Regulations that, subject to certain exceptions, would cause a U.S. Holder that had not made a timely QEF election
to recognize