I'm not sure what JRiver means when they use the term lossless. All digital files and all recorded music files are lossless to some extent. Simply distributing or streaming files in a lossless file format such as ALAC or FLAC does not automatically make the streamed files lossless. It makes them just as lossy as the original file is lossy.
Converting an mp3 file to FLAC, the former being definitely lossy by virtue of purposely processing the files to make them more compact while extracting some sonic information in the process, does not make the FLAC file a lossless file. It is an exact representation of the mp3 file and is therefore 'lossy' even though it is a lossless replica of the original.
So, my question is this: How does JRiver Media Center define "lossless" and what steps are taken to ensure that mp3, AAC and other "lossy" files are not represented in the CloudPlay stream?