GOLD RESERVE LTD 10-K

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Repurchase of Equity Securities Offer and Listing details The Class A common shares of Gold Reserve Inc. are traded on The Toronto Stock Exchange (“TSX”) and on the NYSE Amex under the symbol “GRZ.” Neither the Company’s equity units nor the 5.50% convertible notes and the related underlying securities are listed for trading on any exchange. TSX NYSE Amex Canadian dollars U.S. dollars 2010 High Low High Low March (through 03/30/10) $1.23 $1.01 $1.19 $0.98 February 1.36 1.10 1.27 1.05 January 1.63 1.26 1.58 1.20 2009 Fourth Quarter $1.79 $0.89 $1.73 $0.86 Third Quarter 1.13 0.51 1.04 0.48 Second Quarter 0.85 0.56 0.70 0.50 First Quarter 1.45 0.70 1.23 0.54 2008 Fourth Quarter $1.17 $0.32 $1.07 $0.26 Third Quarter 1.99 1.07 1.92 1.04 Second Quarter 4.56 1.30 4.47 1.28 First Quarter 5.95 4.47 6.00 4.10 On March 30, 2010, the closing price for a Class A common share of the Company was Cdn $1.03 per share on the TSX and U.S. $1.02 per share on the NYSE Amex. As of March 30, 2010, there were a total of 57,607,663 Class A common shares and 961 Class B common shares issued and outstanding. The number of holders of Class A and Class B common shares of record on March 30, 2010 was approximately 829. As of March 30, 2010, based on information received from our transfer agent and other service providers, we believe our common shares are owned beneficially by approximately 11,000 shareholders. We have not declared or paid any dividends on our common shares since 1984. We intend to retain earnings, if any, to finance the growth and development of our business and do not intend to pay cash dividends on the common shares in the foreseeable future. The payment of future cash dividends, if any, will be reviewed periodically by the Board of Directors and will depend upon, among other things, conditions then existing including earnings, financial condition and capital requirements, restrictions in financing agreements, business opportunities and conditions and other factors. Exchange Controls There are no governmental laws, decrees or regulations in Canada that restrict the export or import of capital, including foreign exchange controls, or that affect the remittance of dividends, interest or other payments to non-resident holders of the securities of the Company, other than a Canadian withholding tax. See “—Certain Canadian Income Tax Considerations for U.S. Residents,” below. Certain Canadian Federal Income Tax Considerations for U.S. Residents The following summarizes certain Canadian federal income tax consequences generally applicable under the Income Tax Act (Canada) and the regulations enacted thereunder (collectively, the “Canadian Tax Act”) and the Canada-United States Income Tax Convention (1980) (the “Convention”) to the holding and disposition of common shares. Comment is restricted to holders of common shares each of whom, at all material times for the purposes of the Canadian Tax Act and the Convention, (i) is a resident of the United States and is not a resident of Canada, (ii) is entitled to the benefit of the Convention, (iii) holds all common shares solely as capital property, (iv) deals at arm’s length with and is not affiliated with Gold Reserve, and (v) does not use or hold and is not deemed to use or hold, any common shares in a business carried on in Canada, and none of whose common shares constitute “taxable Canadian property” as defined in the Canadian Tax Act (each such individual, a “U.S. Resident”). Generally, a person will be considered to hold a common share as capital property provided that the person acquired the share as a long-term investment, is not a trader or dealer in securities, did not acquire, hold or dispose of the share in a transaction considered to be an adventure or concern in the nature of trade (i.e. speculation), and does not hold the common share as inventory in the course of carrying on a business. Special rules, which are not discussed below, may apply to a U.S. Resident who is an insurer that carries on business in Canada and elsewhere. Generally, (a) a person’s Class A common shares will not constitute “taxable Canadian property” at a particular time provided that the common shares are listed on a “designated stock exchange” (which currently includes the Toronto Stock Exchange) at that time and at all times in the 60 months preceding the particular time, (i) neither the person nor one or more other persons with whom the first person does not deal at arm’s length, alone or in any combination, held, directly or indirectly, 25% or more of the issued shares of any class in the capital stock of Gold Reserve, or (ii) more than 50% of the fair market value of the share was not derived directly or indirectly from one or any combination of (A) real or immovable property situated in Canada, (B) Canadian resource properties, (C) timber resource properties and (D) options in respect of, or interests in, or for civil law rights in, property described in any of (A), (B) and (C), whether or not the property existed, and (b) a person’s Class B common shares will not constitute “taxable Canadian property” at a particular time provided that at all times in the 60 months preceding the particular time, more than 50% of the fair market value of the share was not derived directly or indirectly from one or any combination of property described in any of (A), (B), (C) and (D) above, whether or not the property existed. Certain entities that are fiscally transparent for United States federal income tax purposes (including limited liability companies) do not qualify as residents of the United States for the purposes of the Convention. A member or holder of an interest in such an entity that holds common shares should consult the member or holder’s own tax advisors. This summary is based on the current provisions of the Canadian Tax Act and the Convention in effect on the date hereof, all specific proposals to amend the Canadian Tax Act and Convention publicly announced by or on behalf of the Minister of Finance (Canada) on or before the date hereof (the “Tax Proposals”), and the current published administrative and assessing policies of the Canada Revenue Agency. It is assumed that all such amendments will be enacted as currently proposed, and that there will be no other material change to any applicable law or administrative policy, although no assurance can be given in these respects. Except as otherwise expressly provided, this summary does not take into account any provincial, territorial or foreign tax considerations. This summary is of a general nature only, is not exhaustive of all possible Canadian federal income tax considerations, and is not and is not to be construed as legal or tax advice to any particular holder or prospective holder of common shares. Each holder or prospective holder of common shares is urged to consult his, her or its own tax advisors for advice with respect to the holder or prospective holder’s particular circumstances. The discussion below is qualified accordingly. Disposition of Common Shares A U.S. Resident who disposes of a common share will not thereby incur any liability for Canadian federal income tax. Taxation of Dividends on Common Shares A U.S. Resident who is or is deemed to be paid or credited a dividend on the U.S. Resident’s common shares will be subject to Canadian withholding tax equal to 15% or, if the U.S. Resident is a company that holds 10% or more of the voting stock of Gold Reserve, 5%, of the gross amount of the dividend. A U.S. Resident that is (i) a qualifying religious, scientific, literary, educational or charitable organization and is exempt from tax in the U.S., or (ii) a qualifying trust, company, organization or arrangement operated exclusively to administer or provide pension, retirement or employee benefits and is exempt from tax in the U.S. may be exempt under the Convention from Canadian withholding tax provided specific administrative procedures are complied with. Item 6. Selected Financial Data 2009 2008 2007 2006 2005 STATEMENT OF OPERATIONS Other Income $ 3,165,736 $ 2,521,302 $6,499,084 $8,252,058 $1,402,868 Expenses: General and administrative 4,380,165 7,453,842 12,143,569 6,646,798 5,054,420 Technical services 4,264,103 5,410,181 5,093,963 5,015,222 3,876,928 Corporate communications 698,295 941,002 904,157 699,922 662,350 Legal and accounting 1,303,087 899,195 774,140 756,752 749,208 10,645,650 14,704,220 18,915,829 13,118,694 10,342,906 Takeover defense and litigation 2,021,729 5,407,230 – – – Loss on sale of equipment 3,423,544 1,346,423 – – – Foreign currency (gain) loss (5,429) 61,212 (926,299) 1,141,932 78,070 Loss before income tax, minority interest, interest expense and extraordinary item (12,919,758) (18,997,783) (11,490,446) (6,008,568) (9,018,108) Income tax expense (142,319) (737,050) (26,848) (521,803) (1,471) Minority interest 27,124 8,712 (462,474) (446,374) (7,703) Interest expense (1,688,403) – – – – Loss before extraordinary item (14,723,356) (19,726,121) (11,979,768) (6,976,745) (9,027,282) Extraordinary loss on expropriation of assets (150,726,472) – – – – Net loss $(165,449,828) $(19,726,121) $(11,979,768) $(6,976,745) $(9,027,282) Net loss per share – basic and diluted $(2.89) $(0.35) $(0.24) $(0.18) $(0.26) BALANCE SHEET Cash and cash equivalents, marketable securities, restricted cash $81,226,435 $110,402,599 $151,748,690 $28,684,310 $22,355,486 Property, plant and equipment, net 38,122,102 175,132,478 128,624,670 73,643,895 58,016,102 Total assets 119,915,020 287,614,514 281,898,903 104,615,721 81,954,872 Convertible notes(1) 93,693,168 91,829,699 70,306,054 – – Total liabilities 99,997,420 102,508,078 80,578,094 3,643,709 2,317,106 Total shareholders' equity 19,917,600 185,106,436 201,320,809 100,972,012 79,637,766 (1) Face value of outstanding convertible notes is approximately $102.3 million. See Note 18 to the consolidated financial statements. STATEMENT OF CASHFLOWS Net cash used in operating activities $(15,130,345) $(13,858,222) $(5,675,305) $(11,179,770) $(7,729,508) Net cash provided by (used in) investing activities (15,048,843) 10,454,475 (97,797,970) (8,518,467) (2,691,289) Net cash provided by financing activities (408,166) 273,338 172,779,163 25,702,673 2,612,344