This final share exchange agreement ("agreement") of June 29, 2020 is part of Futuris Technology Services, Inc. ("Futuris"), a Virginia-based company at 4506 Daly Drive, Suite-100, Chantilly VA 20151 (the sole owner of Pioneer Global Inc., a Virginia company ("Pioneer"), the shareholders of Futuris (together the "shareholders") and Mission Mining Co., a Wyoming company ("MISM"), located on Baltimore Road 22. , Rockville, MD 20850, and Kalyan Pathuri, President of MISM ("Pathuri"). Together, the shareholders, Futuris, MISM and Pathuri are the "parties". 1.11 If the seller is a non-resident of Canada and the shares exchanged meet the definition of Canadian taxable assets, it is not excluded that the property within the meaning of paragraph 116, paragraph 6, complies with the requirements of Section 116. For more information on these requirements, please see Circular IC72-17R6, Procedures About the Disposition of Taxable Canadian Property by Non-residents of Canada - Section 116. 1.7 In certain circumstances, even if an exchange of shares is a partial exchange described in Article 85.1 (1), the exchange of shares could still apply. Subsection 85.1 (1) can be an application, when a seller: THIS SHARE EXCHANGE AGREEMENT (the "agreement") of November 25, 2020 by and between Folkup Development, Inc., a Nevada company ("Folk Development"), and Powertech Holdings Company Limited, a limited company in the British Virgin Islands ("Powertech"), and Powertech shareholders listed in Schedule A (shareholder and partner, respectively), the "shareholders"). It is interesting to note that the tax consequence for the buyer is not determined according to the adjusted cost base of the seller`s shares. On the contrary, the cost of acquiring the seller`s shares is considered by the buyer to be the lowest of the capital released from those shares or their fair value.
Paid-up capital is the total amount of money the company originally received for the issuance of an entire class of shares, divided by the total number of shares in that class. When the company first gives its shareholders a class of shares for cash payment, the paid-in capital corresponds to a share of its shareholder-adjusted cost base. However, when the entity repurchases its own shares at the fair value of its shareholder, the adjusted cost base is fair value, but the capital released remains the same, which may be more or less than the adjusted cost base. Paragraph 85.1 (1) is applicable when a taxable person (seller) who holds shares (shares exchanged) in a limited company (acquired company) exchanges that shareholding for shares in the share capital of a purchase company (buyer). As soon as the above conditions are met, subsection 85.1 (1) is carried forward by deferring the effects of the capital gain in that the proceeds from the transfer of the seller`s shares correspond to the adjusted cost base of those shares for the seller. The same amount, which constitutes the adjusted cost base of the seller`s shares, is also considered the cost borne by the seller to acquire the buyer`s shares. The adjusted cost base is defined in Section 54 of the Income Tax Act as the cost of capital for a property. The rating agency`s own position in IT-285R2 is that the adjusted cost base of a stock includes money paid by a shareholder for the acquisition of the shares, as well as additional legal and accounting fees.