ITEM 1.01—ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
Adar Bays, LLC
CannaSys, Inc. entered into a Securities Purchase Agreement ("SPA") with Adar Bays, LLC, a Florida limited liability company ("Adar Bays"), and executed three 8% Convertible Redeemable Promissory Notes, each in the principal amount of $57,500 (the "Notes"). On December 20, 2016, Adar Bays funded the first Note for $57,500, less $16,750 in a combination of due diligence costs and past-due expenses owing by CannaSys, which were retained and disbursed by Adar Bays. Under the terms of the SPA, the second and third Notes are initially paid for by Adar Bays' issuance to CannaSys of two offsetting collateralized notes for $57,500 (the "Buyer Notes"). The Buyer Notes do not become effective until Adar Bays funds the respective Notes, which funding is in CannaSys's sole discretion. The first Note and the second and third Notes (when funded by the offsetting Buyer Notes) accrue interest at the rate of 8% per annum and mature on December 12, 2017. The outstanding amounts due under the Notes are 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 SPA and the Notes were 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.
MHB, Inc
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On December 22, 2016, an Amendment to Share Exchange Agreement (the "Amendment") between CannaSys, Inc. and MHB, Inc., a Colorado corporation doing business as Mile High Brands ("MHB") amending the Share Exchange Agreement ("Exchange Agreement") between the parties dated November 3, 2015. Under the Amendment: (i) MHB cancelled 9,985,000 MHB shares issued to CannaSys under the Exchange Agreement; (ii) CannaSys cancelled 485,000 post-split CannaSys shares issued to MHB under the Exchange Agreement; (iii) the Gross Revenue Assignment between the parties was terminated, section 2.04 of the Exchange Agreement was deleted in its entirety; and (iv) the parties confirmed that the $7,500 payment from MHB to CannaSys was fees as originally contemplated under the Exchange Agreement. As amended, each party now owns 15,000 shares of the other party's common stock. The parties also reaffirmed their commitment to the successful operation of Mile High Consulting and Branding, Inc. formed under section 8.07 of the Exchange Agreement and the parties' Stockholder Agreement for Mile High Consulting and Branding, Inc.