On May 15, 2017, we received proceeds of $46,950, net of transaction costs, from an 8% Convertible Redeemable Promissory Note under the terms of a Securities Purchase Agreement dated December 16, 2016, with Adar Bays, LLC, a Florida limited liability company. The note accrues interest at the rate of 8% per annum and matures on December 12, 2017. The outstanding amount due under the note is immediately convertible into restricted shares of CannaSys common stock after 180 days from the issue date, at Adar Bays’ sole discretion, at 50% of the lowest trading price for the common stock for the 25 consecutive prior trading days immediately preceding the conversion date, with some exceptions.

The note was issued in reliance on the exemption from registration provided in Section 4(a)(2) of the Securities Act of 1933, as amended, for transactions not involving any public offering. Adar Bays is an “accredited investor” as defined in Rule 501(a) of Regulation D and confirmed the foregoing and acknowledged, in writing, that the securities were acquired and will be held for investment. No underwriter participated in the offer and sale of these securities, and no commission or other remuneration was paid or given directly or indirectly in connection therewith.