Company: EDSA
Filing Date: 2025-09-09
Form Type: 424B5
Source: 0001171843-25-005799
Chunk: 23

Company: Edesa Biotech, Inc.
Filing Date: 2025-09-09
Form: 424B5
Chunk 23
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losses to the extent of any net mark-to-market gains previously included in income. Losses that exceed this limitation are subject to
the rules generally applicable to losses provided in the Code and Regulations (see “Material U.S. Federal Income Tax Considerations — Sale, Exchange or Other Taxable Disposition of common shares” below). Amounts treated as ordinary income will not be
eligible for the preferential tax rates applicable to “qualified dividend income” or long-term capital gains. A mark-to-market
election is not permitted for the shares of any Subsidiary PFIC.

| S-14 |

If we are classified as a PFIC for any
taxable year in which a U.S. Holder owns common shares, but before a mark-to-market election is made, the adverse PFIC rules described
above will apply to any mark-to-market gain recognized in the year the election is made. Otherwise, a mark-to-market election will be
effective for the taxable year for which the election is made and all subsequent taxable years. The election cannot be revoked without
the consent of the IRS unless the common shares cease to be marketable, in which case the election is automatically terminated.

In some cases, a shareholder of a PFIC
can avoid the interest charge and the other adverse PFIC consequences described above by making a QEF election to be taxed currently on
its share of the PFIC’s undistributed income. We may not be able to satisfy the record keeping requirements that apply to a QEF
and to supply requesting U.S. Holders with the information that such U.S. Holders are required to report under the QEF rules.

A U.S. Holder that makes a timely and
effective QEF election for the first tax year in which its holding period of its common shares begins generally will not be subject to
the adverse PFIC consequences described above with respect to its common shares. Rather, 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) the Company’s net capital
gain, which will be taxed as long-term capital gain to such

U.S. Holder, and (b) the Company’s ordinary earnings,
which will be taxed as ordinary income to such U.S. Holder, in each case regardless of which such amounts are actually distributed to
the U.S. Holder by the Company. Generally, “net capital gain” is the excess of (