VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jan. 12, 2017) - Kona Bay Technologies Inc. (the "Company") (TSX
VENTURE:KBY) announces that its board of directors has approved the proposed spin off of each of the Company's online advertising
and software as a service businesses into independent publicly traded companies (the "Arrangement"). The name of each new
company will be determined at a later date but for the purposes herein are referred to as "Ad Co" and "SaaS Co".
The board of directors believes that spinning off Ad Co and SaaS Co will help attract an investor base for each entity's
specific business and thereby maximizing shareholder value.
Proposed Terms of the Arrangement
Under the proposed terms of the Arrangement: (1) the shareholders of the Company will receive one share of Ad Co and SaaS Co
for each share of the Company, (2) the terms of the existing warrants will be amended to entitle the holder to receive, upon due
exercise of the warrants, one share of the Company, Ad Co and SaaS Co for each share of the Company that the holder was entitled
to receive on exercise of the warrants prior to the Arrangement, and (3) the terms of the existing debentures will be amended to
entitle the holder to receive, upon due conversion of the debentures, one share of the Company, Ad Co and SaaS Co for each share
of the Company that the holder was entitled to receive on conversion of the debentures prior to the Arrangement.
The proposed board of directors and officers of Ad Co and SaaS Co will be set forth in the Company's management information
circular, which will be filed on SEDAR in due course. The Company expects to complete the Arrangement in the first half of
2017. The Arrangement is subject to customary conditions, regulatory approvals and tax considerations.
About Ad Co
Upon closing of the Arrangement, Ad Co will be a technology company specializing in digital customer acquisition. Ad Co's
customers are primarily higher education institutions that promote campus and online degree programs to consumers through digital
media such as websites, mobile apps, social media networks, and direct e-mail. Ad Co's vision is expand beyond the education
industry into other vertical markets to deliver qualified inquiries to advertiser clients at scale and according to the client's
targeted return on investment.
About SaaS Co
Upon closing of the Arrangement, SaaS Co will be a software development company that specializes in online testing platforms
for training and high-stakes applications. SaaS Co designs, develops, and manages the platform for higher education clients with
multiple campus locations and complex requirements. The testing platform is highly flexible and supports a wide range of question
content types incorporating multimedia elements for reading, writing, speaking, and listening assessments. Higher education
clients use the platform to deliver practice tests, high-stakes assessments, and professional training.
Upon completion of the Arrangement, the Company will retain its consumer-oriented Internet Applications business unit and
focus on expanding into high-growth opportunities in the e-commerce and mobile commerce sectors.
Kona Bay Technologies Inc.
Kona Bay Technologies is a global provider of Online Customer Acquisition software and services. We acquire, manage, and build
Online Customer Acquisition businesses that address the specific client acquisition needs of our customers in particular vertical
markets.
FORWARD-LOOKING STATEMENTS: Except for statements of historical fact, all statements in this news release - including, without
limitation, statements regarding future plans and objectives of Kona Bay Technologies Inc. - are forward-looking statements that
are subject to various risks and uncertainties. Forward-looking statements are based on current expectations and analyses,
including the effects of anticipated product, service, and distribution changes and the potential benefits of such efforts and
activities on the Company's results of operations in future periods. There can be no assurance that such statements will prove to
be accurate; actual results and future events could differ materially from those anticipated in such statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.