RE: RE: RE: RE: will the Cs be dealt with first? "Can you supply proof that there will be a tax liability on the conversion of 1 form of equity to another"
The difference in dollar value between the 2 is a Capital Gain by definition
"as you have continuously said that the A and B are not debt so there should be no gain for the company"
Debt has nothing to do with it. Did YLO receive the money from the sale of the shares? Did they pay tax on it? No they did not because there was a counterbalancing liability in the form of a conditional promise to pay it back, so therefore it was not a gain at that time. Once you remove all or part of the liability then that whole or part becomes a gain. It does not matter to CRA that it was from years ago and your fearless leader has already wasted the money with nothing to show for it.