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File: KBY News Release March 1 2017 Q1 Financial Results v4 FINAL.docx

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Kona Bay Technologies Inc
Suite 1116, 207 W. Hastings Street, Vancouver, BC, CANADA V6B 1H7

For Immediate Release TSX Venture:  KBY
Kona Bay Technologies Announces Execution of Arrangement Agreement 
March 1, 2017, Vancouver, British Columbia - Kona Bay Technologies Inc. (the "Company") announces that it has entered 
--->into an arrangement agreement (the "Arrangement Agreement") with its two wholly-owned subsidiaries Hapuna Ventures Inc
--->. ("Hapuna") and Bexar Ventures Inc. ("Bexar") as part of the Company's plan to spin off the Company's online advertis
--->ing and software-as-a-service business units into two independent publicly traded companies. The proposed transaction 
--->will be implemented by way of a court-approved plan of arrangement (the "Arrangement") under the Business Corporations
---> Act (British Columbia). 

Transaction Summary
Under the Arrangement Agreement, each shareholder of the Company will receive one share of Hapuna and one share of Bex
--->ar for each share of the Company. The board of directors believes that spinning off Hapuna and Bexar will help attract
---> an investor base for each entity's specific business and thereby maximizing shareholder value.
Full details of the Arrangement Agreement will be included in a Management Information Circular to be filed with appli
--->cable regulatory authorities and mailed to Kona Bay shareholders in accordance with applicable securities laws. The Co
--->mpany expects to mail the Management Information Circular in March 2017.
The Company expects to complete the Arrangement in the first half of 2017.  The Arrangement is subject to customary co
--->nditions, regulatory approvals and tax considerations.

Quarterly Financial Results
The Company also announced its unaudited financial results for the quarter ended December 31, 2016.  Results are in Ca
--->nadian dollars and were prepared in accordance with International Financial Reporting Standards.
The Company previously reported three operating segments, Student Marketing Services, Custom Software Development, and
---> Internet Applications.   Pursuant to the Arrangement, the Student Marketing Services and Custom Software Development 
--->businesses will be spun into Hapuna and Bexar respectively.  The Company has elected to classify the assets of these b
--->usinesses as held for sale and its operating results as Discontinued Operations.  The operating results of the Interne
--->t Applications business unit are now reported as Continuing Operations.

 Three Months Ended December 31, 2016
 Three Months Ended December 31, 2015
 
 Sales and other revenue from Continuing Operations
 $66,813
 $85,491
 
 Net income (loss) from Continuing Operations
 $112,644
 $(115,708)
 
 Net income (loss) from Discontinued Operations
 $(17,680)
 $(23,338)
 
 Earnings (loss) per share from Continuing Operations
 $0.05
 $(0.05)
 
 Earnings (loss) per share from Discontinued Operations
 $(0.01)
 $0.01
 
 The unaudited consolidated financial statements and Management Discussion and Analysis for the quarter ended December
---> 31, 2016 are available at www.sedar.com.

For further information, please contact Vincent Wong, President of the Company at investor.relations@konabaytech.com

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-look
--->ing statements that are subject to various risks and uncertainties. Forward-looking statements are based on current ex
--->pectations and analyses, including the effects of anticipated product, service, and distribution changes and the poten
--->tial 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 fr
--->om 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.