CRA finds that a conditional contractual obligation to issue shares in consideration for a cash advance might be subject to s. 49.1 on the share issuance

A SAFE (“Simple Agreement for Future Equity”) is a financing agreement in which an investor provides funds to a company in exchange for the right to receive shares upon the occurrence of a future event, generally a future financing or a winding-up event, at a preferential price.

CRA indicated that, assuming the SAFE was not a share, or a bond, debenture or note, the future issuance event would not come within s. 51(1). However, s. 49.1 was also relevant to the question as to whether the conversion of a SAFE into shares, and it was conceivable that there would be no disposition on such conversion.

Neal Armstrong. Summaries of 9 October 2025 APFF Roundtable, Q.12 under s. 51(1) and s. 49.1.