BioAmber Inc (fka BIOAQ)

[eddy2]

Let’s get some of your misleading terminology out of the way. It is often misquoted that when a loan is collateralized that the assets are sold. This true in a sense except the tax is forgiven on the sale until the loan/ debt is paid back to the creditor. In other words the tax’s on the sale is not payable until until the assets are sold outside the corporation. If the assets are sold within the corporation and the collateral is held in trust by the corporation for the creditor then the sales tax will also be held pending payment. If the collateral is returned on payment of the debt then the tax owed on the sale will be eliminated or forgiven.

I talked yesterday a little about payables that again is a loan that carries a tax burden with it. This is no different then the borrowing of capital to pay wages, a lunch barbecue ect. The debt borrowed is taxable as soon as the funds leave from under the corporate umbrella.

I once had a young student come up to me and say what happens then when the corporate lunch bought on using credit ends up in the city dumbster.

I told him that 18% of the cost of the lunch will be forgiven as an expense. The other 82% of the cost of the lunch is taxable but it is not payable until the business is sold to a outside interest.

So a buyer comes along and offers $100 for the business to its common shareholders. The debt is twenty five dollars noted by the shareholders deficit. The tax bill owning is $200 dollars ie: treasury stock.

So let me ask everyone here how much return in capital will the common share holders receive. Remember the common share holders are not liable for any debt that can’t be paid.

Asset including recievables + shareholder deficit = $100
Debt = share holders deficit including payables =$50
Tax debt =$200

The public owning the tax debt that was bought will get $50. The common share holders will get nothing.