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Foreign Currency Transactions
Generally, amounts received by a U.S. Holder in foreign currency (including dividends paid in foreign
currency) will be valued at the rate of exchange on the date of receipt. The subsequent disposition of any foreign
currency received (including an exchange for U.S. currency) will generally give rise to ordinary gain or loss should
the rate of exchange subsequently change.
Foreign Tax Credit or Deduction
A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect to the
ownership of our common shares may be entitled, at the option of the U.S. Holder, to either receive a deduction or a
tax credit for U.S. federal income tax purposes with respect to such foreign tax paid or withheld. Significant and
complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the
proportionate share of the U.S. Holder’s U.S. income tax liability that the U.S. Holder’s “foreign source” income
bears to his or its worldwide taxable income. In applying this limitation, the various items of income and deduction
must be classified as either “foreign source” or “U.S. source.” Complex rules govern this classification process.
In lieu of a credit, a U.S. Holder who itemizes deductions may elect to deduct all of such holder’s foreign
taxes in the taxable year. A deduction does not reduce U.S. tax on a dollar-for-dollar basis like a tax credit, but the
deduction for foreign taxes is not subject to the same limitations applicable to foreign tax credits. U.S. Holders are
urged to consult their own tax advisors regarding the availability of foreign tax credits.
A U.S. Holder’s ability to use foreign tax credits could be adversely affected if we are a PFIC.
Information Reporting and Backup Withholding
Certain U.S. Holders are required to report information relating to an interest in our common shares, subject
to certain exceptions, by attaching a completed IRS Form 8938, Statement of Specified Foreign Financial
Assets, with their tax return for each year in which they hold an interest in our common shares or warrants.
U.S. Holders are urged to consult their own tax advisors regarding information reporting requirements
relating to their ownership of our common shares.
Dividend payments made with respect to our common shares and proceeds from the sale or other
disposition of our common shares may be subject to information reporting requirements and to U.S. backup
withholding (currently at a rate of 28%).
In general, backup withholding will apply with respect to reportable payments made to a U.S. Holder
unless (i) the U.S. Holder is a corporation or other exempt recipient, and if required, demonstrates such exemption,
or (ii) the U.S. Holder furnishes the payor with a taxpayer identification number on IRS Form W-9 in the manner
required, certifies under penalty of perjury that such U.S. Holder is not currently subject to backup withholding and
otherwise complies with the backup withholding requirements.
Backup withholding is not an additional tax. Rather, the amount of any backup withholding imposed on a
payment to a holder will be allowed as a refund or a credit against such holder’s U.S. federal income tax liability,
provided that the required information is timely furnished to the IRS
.
ITEM
6. SELECTED FINANCIAL DATA
As a smaller reporting company, we are not required to provide this information. See “Item 8. Financial
Statements and Supplementary Data.”