Section 49.1

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.