10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended September 30, 2015
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _______________ to _______________

Commission File No. 000-54476

CANNASYS, INC.

(Exact name of registrant as specified in its charter)

Nevada	88-0367706
(State or other jurisdiction of	(IRS Employer
incorporation or organization)	Identification No.)

1720 S Bellaire Street, Suite 325

Denver, CO  80222

(Address of principal executive offices and zip code)

(800) 420-4866

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of November 12, 2015, there were 11,576,045 shares of common stock, $0.001 par value, outstanding.

CANNASYS, INC.

Form 10-Q for the Quarter Ended September 30, 2015

TABLE OF CONTENTS

Item		Page
	Part I—Financial Information
1	Financial Statements (Unaudited)	2
	Balance Sheets	2
	Statements of Operations	3
	Statements of Cash Flows	4
	Notes to the Financial Statements	5
2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
3	Quantitative and Qualitative Disclosures about Market Risk	15
4	Controls and Procedures	16
	Part II—Other Information
2	Unregistered Sales of Equity Securities and Use of Proceeds	16
6	Exhibits	17
	Signature Page	18

1

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CANNASYS, INC.

Condensed Balance Sheets

	September 30, 2015			December 31, 2014
Assets	(unaudited)
Current Assets:
Cash	$	19,381		$	525,720
Accounts receivable		800			2,224
Prepaid expenses and other assets		-			2,828
Total Current Assets		20,181			530,772
Property & equipment, net		5,884			7,987
Software license		205,000			25,000
Deposit		12,502			12,502
Total Assets	$	243,567		$	576,261
Liabilities and Stockholders’ Equity (Deficit)
Current Liabilities:
Accounts payable	$	54,723		$	21,133
Accrued expenses		62,121			54,070
Notes payable		200,000			-
Due to a related party		-			1,320
Total Current Liabilities		316,844			76,523
Total Liabilities		316,844			76,523
Commitments and Contingencies		-			-
Stockholders’ Equity (Deficit):
Preferred stock, $0.001 par value, 5,000,000 shares
authorized, no shares issued		-			-
Common stock, $0.001 par value, 75,000,000 shares
authorized, 11,298,405 and 11,043,755 shares issued and
outstanding, respectively		11,299			11,044
Additional paid-in capital		2,538,519			2,247,524
Accumulated deficit		(2,623,095	)		(1,758,830	)
Total Stockholders’ Equity (Deficit)		(73,277	)		499,738
Total Liabilities and Stockholders’ Equity (Deficit)	$	243,567		$	576,261

The accompanying notes are an integral part of these condensed unaudited financial statements.

2

CANNASYS, INC.

Condensed Statements of Operations

(Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2015			2014			2015			2014
Sales revenue	$	48,156		$	1,627		$	76,404		$	1,627
Cost of goods sold		6,800			1,832			10,018			8,874
Gross Margin		41,356			(205	)		66,386			(7,247	)
Operating Expenses:
Professional fees		58,847			61,314			155,827			61,314
Salary and wage expense		335,297			1,098,398			572,151			1,148,747
General and administrative		96,394			47,496			200,585			227,560
Total Operating Expenses		490,538			1,207,208			928,563			1,437,621
Loss from Operations		(449,182	)		(1,207,413	)		(862,177	)		(1,444,868	)
Other expense:
Interest expense		(1,410	)		-			(2,088	)		-
Total other expense		(1,410	)		-			(2,088	)		-
Loss before provision for income taxes		(450,592	)		(1,207,413	)		(864,265	)		(1,444,868	)
Provision for income taxes		-			-			-			-
Net loss	$	(450,592	)	$	(1,207,413	)	$	(864,265	)	$	(1,444,868	)
Basic and diluted loss per common share	$	(0.04	)	$	(0.13	)	$	(0.08	)	$	(0.24	)
Weighted average number of common shares outstanding		11,274,053			9,062,217			11,135,605			6,020,440

The accompanying notes are an integral part of these condensed unaudited financial statements.

3

CANNASYS, INC.

Condensed Statements of Cash Flows

(Unaudited)

	For the Nine Months Ended September 30,
	2015			2014
Cash flow from operating activities
Net loss	$	(864,265	)	$	(1,444,868	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation		2,103			-
Stock based compensation		208,000			-
Change in operating assets and liabilities:
Decrease in accounts receivable		1,424			-
Decrease in prepaids		2,828			1,685
Increase in other assets		(96,750	)		-
Increase (decrease) in related-party payable		(1,320	)		1,320
Increase in accounts payable		33,590			20,361
Increase in accrued expenses		8,051			1,032,942
Net cash used in operating activities		(706,339	)		(388,560	)
Cash flows provided by investing activities:
Cash acquired in merger		-			35,719
Net cash provided by investing activities					35,719
Cash flows from financing activities:
Proceeds from loans		200,000			500,000
Proceeds from sale of common stock		-			200,000
Proceeds from stock subscription payable		-			252,000
Net cash provided by financing activities		200,000			952,000
Net increase (decrease)in cash		(506,339	)		599,159
Cash at beginning of the period		525,720			88,389
Cash at end of the period	$	19,381		$	687,548
Supplemental Disclosures:
Interest paid	$	-		$	-
Income taxes paid	$	-		$	-
Supplemental disclosure of non-cash activities
Common stock issued for software license	$	83,249		$	-

The accompanying notes are an integral part of these condensed unaudited financial statements.

4

CANNASYS, INC. AND SUBSIDIARIES

Notes to the Condensed Financial Statements

September 30, 2015

(Unaudited)

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Organization

We were organized as a Nevada corporation on August 25, 1999. On August 15, 2014, we entered into an Agreement and Plan of Merger to combine our business and activities with CannaSys, Inc., a privately held Colorado corporation focused on providing services to the cannabis industry (“CannaSys-Colorado”), into a single entity (the “Merger”). CannaSys-Colorado was originally formed on October 4, 2013, as a limited liability company, and converted to a corporation on June 26, 2014. Under the terms of the merger agreement, our wholly owned subsidiary formed to effectuate the Merger was merged with and into CannaSys-Colorado, the surviving entity, which then became our wholly owned subsidiary. By operation of the Merger, which was effective August 15, 2014, all of the CannaSys-Colorado outstanding common stock was converted into a total of 6,000,000 shares of our common stock, which then constituted 57.70% of our total issued and outstanding common stock. Our shareholders prior to the Merger retained an aggregate of 4,398,088 shares of common stock; we had no outstanding options or warrants to purchase shares of common stock.

Due to the CannaSys-Colorado shareholders controlling us after the Merger, CannaSys-Colorado was considered the accounting acquirer. The transaction was therefore recognized as a reverse acquisition of us by CannaSys-Colorado. The accompanying condensed consolidated financial statements are those of CannaSys-Colorado for all periods prior to the Merger.

In connection with the closing of the Merger and after meeting the requirements of the Securities Exchange Act of 1934, as amended (“Exchange Act”), on November 12, 2014, we filed amended and restated articles of incorporation with the Nevada Secretary of State that: (i) changed our name to CannaSys, Inc.; (ii) increased our authorized capital stock to 80,000,000 shares, consisting of 75,000,000 shares of common stock and 5,000,000 shares of preferred stock; (iii) authorized 5,000,000 shares of preferred stock; and (iv) made other modernizing, nonmaterial changes to our articles of incorporation.  Changing our corporate name to CannaSys, Inc. was a condition to the Merger transaction. The name change better reflects the nature of our principal business operations, and it became effective in the OTC Markets on December 2, 2014, when FINRA announced the name change. We have also received a new CUSIP number and our trading symbol was changed to “MJTK.”

Nature of Business

We provide technology services in the ancillary space of the cannabis industry. We are a technology company, and we do not produce, sell, or handle in any manner cannabis products.

As the current cannabis industry grows and gains momentum around the country, technology needs for the industry have been largely underserved. Our focus on this niche element of the industry creates many efficient and profitable tools for both industry owners and consumers.

Our business consists of four products currently in the marketplace—BumpUp, CannaCash, CannaTrade, and CannaLIMS—that together serve the entire cannabis industry from grower-wholesaler to end-user.

BumpUp is a content resource management platform or customer retention software designed to allow cannabis industry operators the ability to automatically market and target customers in the regulated cannabis markets. The BumpUp technology allows for strong social media ties and an electronic messaging system for cannabis industry operators to effectively and efficiently communicate with the customers with the goal of customer retention. The program is designed to comply with regulatory requirements. The program allows for a mobile application that is geographically restricted to be available only in states that allow safe-access laws to cannabis.

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CannaTrade is a market-style matching system designed to serve legal medical and recreational cannabis and hemp markets. CannaTrade and its sister product, ExchangeHemp, bring the industry a secure, efficient, real-time wholesale product supply exchange and inventory management solution for connecting licensed wholesale buyers and sellers of all types of cannabis and non-cannabis products, while providing business logic to enhance governmental and regulatory compliance frameworks.

CannaCash is an affiliate-based membership rewards loyalty program designed specifically for the cannabis industry. An early version of CannaCash was introduced to the market in July 2014. The CannaCash points program and future gift-card/prepaid-card programs will be free for all cannabis customers and affordable for dispensaries and providers. CannaCash gift cards will be available in multiple denominations and will be redeemable at participating CannaCash locations. The CannaCash gift mechanism will allow for strong social media ties and an electronic solution for providing gift cards and other products to friends and family. CannaCash includes an internal control mechanism designed to comply with the regulatory requirements applicable to individual retail outlets and customers based on applicable state licensing information and customers’ addresses. We plan to integrate our CannaCash solution with our BumpUp loyalty rewards solution for a complete end-to-end consumer experience.

CannaLIMS provides a specific Laboratory Information Management System to regulated testing laboratories in regulated cannabis states. This software-based laboratory and information management system is designed specific to the cannabis industry and laboratory testing. The software features workflow and data tracking support, flexible architecture, and laboratory specified reporting output. We have currently released this product to the marketplace and are aggressively marketing to cannabis labs in regulated markets.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These financial statements should be read in conjunction with the audited financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2014. The results of the nine months ended September 30, 2015, are not necessarily indicative of the results to be expected for the full year ending December 31, 2015.

Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control, and preventing and detecting fraud. Our system of internal accounting control is designed to assure, among other items, that: (1) recorded transactions are valid; (2) valid transactions are recorded; and (3) transactions are recorded in the proper period in a timely manner to produce financial statements that present fairly our financial condition, results of operations, and cash flows for the respective periods being presented.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts and transactions of CannaSys-Colorado, the accounting acquirer, from the date of its inception on October 4, 2013, and refer to the consolidated entity after taking the Merger transaction into effect. All intercompany transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in accordance with U.S. GAAP permits management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. All intercompany transactions have been eliminated in consolidation.

6

Concentrations of Credit Risk

We maintain our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. We continually monitor our banking relationships and consequently have not experienced any losses in our accounts. We believe we are not exposed to any significant credit risk on cash.

Cash and Cash Equivalents

We consider all highly liquid securities with original maturities of three months or less when acquired to be cash equivalents. There were no cash equivalents as of September 30, 2015, and December 31, 2014.

Reclassifications

Certain reclassifications have been made to the prior year financial information to conform to the presentation used in the financial statements for the three and nine months ended September 30, 2015.

Fair Value of Financial Instruments

The carrying amounts of cash and current liabilities approximate fair value because of the short-term maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. We do not hold or issue financial instruments for trading purposes, and we do not use derivative instruments.

The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:

· Level 1: Quoted prices in active markets for identical assets or liabilities.

· Level 2: Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.

· Level 3: Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions.

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Fixed Assets

Fixed assets are carried at the lower of cost or net realizable value. Normal maintenance and repairs are charged to expense as incurred. When assets are sold or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in operations. Depreciation is computed using the straight-line method over the estimated useful life of the asset.

Depreciation is computed using the straight-line method over the following estimated useful lives:

Equipment	3 years
Furniture and fixtures	3 years

Earnings (Loss) per Common Share

Net income (loss) per common share is computed pursuant to ASC 260-10-45, Earnings per Share. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that we incorporated as of the beginning of the first period presented. As of September 30, 2015 and 2014, there were no potentially dilutive shares. 

7

Stock-based Compensation

We account for equity-based transactions with nonemployees under the provisions of ASC 505-50, Equity-Based Payments to Non-Employees (“ASC 505-50”). ASC 505-50 establishes that equity-based payment transactions with nonemployees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The fair value of common stock issued for payments to nonemployees is measured at the market price on the date of grant. The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general, we recognize the fair value of the equity instruments issued as deferred stock compensation and amortize the cost over the term of the contract.

We account for employee stock-based compensation in accordance with the guidance of FASB ASC 718, Compensation—Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.

Revenue Recognition

We follow ASC 605-10-S99-1, Revenue Recognition, for revenue recognition. We will recognize revenue when it is realized or realizable and earned. We consider revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists; (ii) the product has been shipped or the services have been rendered to the customer; (iii) the sales price is fixed or determinable; and (iv) collectability is reasonably assured.

Recently Issued Accounting Pronouncements

In August 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments: (1) provide a definition of the term “substantial doubt”; (2) require an evaluation every reporting period including interim periods; (3) provide principles for considering the mitigating effect of management’s plans; (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans; (5) require an express statement and other disclosures when substantial doubt is not alleviated; and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued).  The amendments in this update are effective for public and nonpublic entities for annual periods ending after December 15, 2016. Early adoption is permitted.

We have reviewed all other recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on our consolidated results of operations, financial position, and cash flows. Based on that review, these pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.

Income Taxes

We follow ASC 740-10-30, Income Taxes-Initial Measurement, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of income in the period that includes the enactment date.

8

We adopted ASC 740-10-25, Accounting for Uncertainty in Income Taxes. ASC 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10-25, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740-10-25 also provides guidance on derecognition, classification, interest and penalties on income taxes, and accounting in interim periods and requires increased disclosures. We had no material adjustments to our liabilities for unrecognized income tax benefits according to the provisions of ASC 740-10-25.

NOTE 3 – GOING CONCERN

As reflected in the accompanying financial statements, we have an accumulated deficit of $2,623,095 at September 30, 2015, had a net loss of $864,265, and used cash in operating activities of $706,339. This raises substantial doubt about our ability to continue as a going concern.

While we are attempting to increase operations and revenues, our cash position may not be significant enough to support our daily operations. Management intends to raise additional funds by way of debt and equity financing. Management believes that the actions presently being taken to further implement our business plan and generate increased revenues provide the opportunity for us to continue as a going concern. While we believe in the viability of our strategy to generate increased revenues and in our ability to raise additional funds, there can be no assurances to that effect. Our ability to continue as a going concern is dependent upon our ability to further implement our business plan and generate increased revenues.

The consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

NOTE 4 – PROPERTY AND EQUIPMENT

Furniture, fixtures, and equipment, stated at cost, less accumulated depreciation consisted of the following:

	September 30, 2015			December 31, 2014
Furniture, fixtures, and equipment	$	8,403		$	8,403
Less: accumulated depreciation		(2,519	)		(416	)
Fixed assets, net	$	5,884		$	7,987

Depreciation Expense

Depreciation expense for the nine months ended September 30, 2015 and 2014, was $2,103 and $0, respectively.

NOTE 5 – SOFTWARE LICENSE

Effective February 12, 2015, we entered into an exclusive licensing agreement with Loyl.Me, an established provider of automated marketing and customer relationship management software. The licensing agreement allows us the opportunity for perpetual and exclusive rights and ability to provide the cannabis community a convenient, cost-effective, and streamlined technology that is widely used in the non-cannabis industry. The technology is being branded as “CannaCash BumpUp.” The term of the agreement is perpetual; therefore, no amortization is being recognized. However, the value of the license will undergo an annual impairment test as required by ASC 350, Intangibles—Goodwill and Other. The agreement requires nine installment payments of $25,000, each to be paid with a combination of cash and stock, and 8% of revenue from the use of the licensed technology. As of September 30, 2015, we had paid $205,000 in cash and stock towards the total cost of the license.

NOTE 6 – COMMITMENTS AND CONTINGENCIES

Operating Lease

We currently occupy office space at 1720 S. Bellaire Street, Suite 325, Denver, CO. Our offices consist of approximately 1,786 rentable square feet. The lease term is 40 months and commenced on November 1, 2014.

9

Future minimum lease payments for the next four years are as follows:

Year	Amount
2015	$	28,278
2016		35,423
2017		37,208
2018		6,251
	$	107,160

NOTE 7 – NOTES PAYABLE

During the nine months ended September 30, 2015, we executed unsecured promissory notes to two accredited investors for a total of $200,000 in a private placement of our securities. The notes accrue interest at 1% per annum and are due and payable on March 1, 2016.

NOTE 8 – RELATED-PARTY TRANSACTIONS

As of December 31, 2014, we owed $1,320 for cash advances to the former president of Thermal Tennis. The advance was due on demand and non-interest-bearing. The advance was paid in the nine months ended September 30, 2015.

NOTE 9– STOCKHOLDERS’ EQUITY (DEFICIT)

On February 9, 2015, we authorized the issuance of 25,000 shares of common stock per the terms of the licensing agreement with Loyl.Me. The shares were valued at $2.00 per share, the closing stock price on the date of grant, for total noncash stock compensation expense of $50,000.

On April 10, 2015, we authorized the issuance of 5,612 shares of common stock per the terms of the licensing agreement with Loyl.Me. The shares were valued at $1.47 per share, the closing stock price on the date of grant, for total noncash stock compensation expense of $8,250.

On July 10, 2015, we authorized the issuance of 24,038 shares of common stock per the terms of the licensing agreement with Loyl.Me. The shares were valued at $1.04 per share, the closing stock price on the date of grant, for total noncash stock compensation expense of $25,000.

On July 10, 2015, we authorized the issuance of 1,250,000 shares of common stock to Michael Tew, our CEO. The shares are to vest and be delivered over 2.5 years beginning with 125,000 shares on July 10, 2015, followed by 125,000 shares on the first day of each subsequent quarter. Shares will be valued at the closing stock price on the day of issuance. The first 125,000 shares were valued at $1.04 per share for total noncash compensation expense of $130,000.

On July 10, 2015, we authorized the issuance of 500,000 shares of common stock to Brandon Jennewine, our CTO. The shares are to vest and be delivered over 2.5 years beginning with 50,000 shares on July 10, 2015, followed by 50,000 shares on the first day of each subsequent quarter. Shares will be valued at the closing stock price on the day of issuance. The first 50,000 shares were valued at $1.04 per share for total noncash compensation expense of $52,000.

On July 10, 2015, we authorized the issuance of 250,000 shares of common stock to a consultant. The shares are to vest and be delivered over 2.5 years beginning with 25,000 shares on July 10, 2015, followed by 25,000 shares on the first day of each subsequent quarter. Shares will be valued at the closing stock price on the day of issuance. The first 25,000 shares were valued at $1.04 per share for total noncash compensation expense of $26,000.

NOTE 10– SUBSEQUENT EVENTS

In accordance with FASB ASC 855-10, Subsequent Events¸ we have analyzed our operations subsequent to September 30, 2015, and have determined that we do not have any material subsequent events to disclose in these financial other than the following.

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On October 1, 2015, we authorized the issuance of 200,000 shares of common stock for compensation expense. The shares were valued at $0.29 per share, the closing stock price on the date of grant, for total noncash stock compensation expense of $58,000.

On October 10, 2015, we authorized the issuance of 77,640 shares of common stock per the terms of the licensing agreement with Loyl.Me. The shares were valued at $0.322 per share, the closing stock price on the date of grant, for total noncash stock compensation expense of $25,000.

On October 14, 2015, we entered into a Securities Purchase Agreement with EMA Financial, LLC, a Delaware limited liability company (“EMA”), and executed a 10% Convertible Note in favor of EMA in the principal amount of $28,000.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Operating Overview

We create, develop, and commercialize innovative solutions to solve customer service and provider problems, create producer and retailer opportunities, build retail customer loyalty, and streamline the connections among the producer, seller, and consumer/patient segments for the growing medical and recreational cannabis community. We believe there is a trend toward legalizing medical and recreational use of cannabis. As additional states legalize medical or recreational use across the nation and as these states develop regulatory schemes, we believe a commercial cannabis industry will be established. We seek to apply and exploit our knowledge and experience to introduce products for this emerging industry, which continues to encounter lack of acceptance from many traditional, integral service providers of loyalty programs, payment methods, wholesale supply, supply management and delivery, and similar items. We believe the resistance or reluctance of others to enter the cannabis industry provides at least temporarily a commercial opportunity for us.

Our products serve both medical and recreational growers, dispensers, and customers. Our product development and introduction is focused on Colorado, where both medical and recreational cannabis is permitted under a developing regulatory regime. Our products are also being marketed in Washington (medical and recreational), and we are preparing for future expansion as cannabis for medical or recreational use becomes legalized and regulated in additional states that have ongoing public dialogue and regulatory or legislative consideration regarding legalization, such as California, Alaska, Nevada, Oregon, the District of Columbia, and others. Residents of Oregon, Alaska, and the District of Columbia have voted to legalize recreational marijuana use for adults. We believe that this movement toward legalization of recreational cannabis will continue and may accelerate. In the next 12 months, we are considering operating only in Colorado, Washington, and possibly Oregon, since the Oregon voters recently approved legalization with the Oregon Liquor Control Commission tasked with regulating sales of marijuana.

Our principal activities to date have been limited to raising capital, identifying possible product opportunities, creating initial products, initiating product development, and select marketing of initial products. In July 2014, we began marketing our initial product concepts: “CannaCash” as an effective choice for cannabis gifts, deals, reviews, and membership rewards for the consumer, and “CannaTrade” for wholesale cannabis-related commodities exchange, order-scheduling, and other services for retailers and producers. The availability, functionality, and payment options of our products are tailored based on state and local laws and regulations. In June 2015, we began marketing our CannaLIMS software product as a service, and in July 2015 we began marketing our BumpUp software product as a service.

Our internal accounting and protocols for monitoring customers, retailers, and other third parties with whom we do business will be accounted for on a daily basis. We check the state licensure status of producers and retailers, regularly monitor disciplinary actions, and routinely update our compliance database. We will stop doing business with firms that are not properly licensed or in good standing with the licensing and regulatory authorities. Our operating systems integrate regulatory compliance and operational accounting. We have in place standard contracts with a verified legal signing authority for our counterparties, as well as end-user licensing agreements, with which to hold accountable the parties we approve to use either system.

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Plan of Operations

We achieved our first revenues in July 2014 from our CannaCash product and expect that revenues will increase in the future, although we do not expect to be profitable within the next 12 months. Our business plan for the next 12 months is to vigorously promote our four products currently in the marketplace—BumpUp, CannaCash, CannaTrade, and CannaLIMS, further develop our existing products and services through software upgrades, and expand our product and service offerings.

Our current business expenses average approximately $55,000 per month, excluding capital expenditures specific to new product launches.  We continue to focus on reducing our monthly business expenses through cost reductions and operational streamlining.  We currently do not have enough cash on hand to sustain our business operations and, alongside expected revenue, we expect to access external capital resources in the near future.  At the moment, we are seeing increased adoption across our business lines but are also experiencing longer lead times from a sales perspective as the industry continues to react to changing regulatory environments.

We anticipate accessing the capital markets in order to fund future research and development, as well as expand product offerings, to include future versions of both products and possible acquisitions of ancillary products and services.  We have budgeted $300,000 for capital expenditures during the next year, consisting of $100,000 for enhanced software development in the coming six months, $25,000 in remaining license fees to Loyl.Me, $50,000 for marketing efforts, $50,000 for legal and lobbying expenses over the next nine months, and $75,000 for expansion over the next year.  We anticipate that we will fund these capital expenditures from proceeds from current cash and from projected revenues.  It is possible external cash will be required during the next 12 months particularly if we seek to develop new products or enter new markets not now anticipated or if projected revenues are not realized. 

Currently, we see the adoption and use of CannaCash BumpUp and CannaLIMS, primarily consumption based recurring revenue “software as a service” products, as our primary focus in addition to identifying acquisition targets and partnerships that may help to solidify us as a strong technology player and data analytics specialist in the industry.  Our current plan of operations includes focusing on the development of these recurring revenue products through strategic partnerships, social marketing, and direct sales efforts.  Additionally, we plan to monetize any other assets not generating recurring revenues through strategic partnerships or dispositions.

In addition to our first several products, we are seeking selected strategic relationships and acquisitions to broaden our product and service offerings by the end of 2015.  As mentioned above, we anticipate to fund our operations with existing funds, projected revenues from operations, and if necessary, sales of our common stock.

Results of Operations for the Three Months Ended September 30, 2015,

Compared to the Three Months Ended September 30, 2014’

Sales Revenue

Revenue for the three months ended September 30, 2015, was $48,156, compared to $1,627 for the three months ended September 30, 2014. In the prior year period, we began to recognize revenue in July 2014. In the current year period, our revenue has been generated through a combination of software development and consulting services.

Cost of Goods Sold

Cost of goods sold for the three months ended September 30, 2015, was $6,800, compared to $1,832 for the three months ended September 30, 2014. The increase is in conjunction with our increase in revenue.

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Operating Expenses

Professional fees were $58,847 for the three months ended September 30, 2015, compared to $61,314 for the three months ended September 30, 2014. Professional fees reflect legal, accounting, and administration fees incurred related mostly to the Securities and Exchange Commission filing requirements.

Salary and wage expense was $335,297 for the three months ended September 30, 2015, compared to $1,098,398 for the three months ended September 30, 2014. Prior-year period’s compensation expense consisted of stock-based compensation of $1,012,500, compared to stock-based compensation of $182,000 in the current period. Not considering the stock-based compensation, regular wage expense has increased in the current period.

General and administrative expense was $96,394 for three months ended September 30, 2015, compared to $47,496 for the three months ended September 30, 2014. The increase in general and administrative expense was a result of

Net Loss

Net loss for the three months ended September 30, 2015, was $450,592, compared to $1,207,413 for the three months ended September 30, 2014. The decrease in net loss is mainly attributed to lower stock compensation expense in the current period.

Results of Operations for the Nine Months Ended September 30, 2015,

Compared to the Nine Months Ended September 30, 2014

Sales Revenue

Revenue for the nine months ended September 30, 2015, was $76,404, compared to $1,627 for the nine months ended September 30, 2014. In the prior year period, we began to recognize revenue in July 2014. In the current year period, our revenue has been generated through a combination of software development and consulting services.

Cost of Goods Sold

Cost of goods sold for the nine months ended September 30, 2015, was $10,018, compared to $8,874 for the nine months ended September 30, 2014. The increase is in conjunction with our increase in revenue.

Operating Expenses

Professional fees were $155,827 for the nine months ended September 30, 2015, compared to $61,314 for the nine months ended September 30, 2014. Professional fees reflect legal, accounting, and administration fees incurred related mostly to the Securities and Exchange Commission filing requirements.

Salary and wage expense was $572,151 for the nine months ended September 30, 2015, compared to $1,148,747 for the nine months ended September 30, 2014. Prior-year period’s compensation expense consisted of stock-based compensation of $1,012,500, compared to stock-based compensation of $182,000 in the current period. Not considering the stock-based compensation, regular wage expense has increased in the current period.

General and administrative expense was $200,585 for nine months ended September 30, 2015, compared to $227,560 for the nine months ended September 30, 2014.

Net Loss

Net loss for the nine months ended September 30, 2015, was $864,265, compared to $1,444,868 for the nine months ended September 30, 2014. The decrease in net loss is largely attributed to lower stock compensation expense in the current period.

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Liquidity and Capital Resources

At September 30, 2015, our principal source of liquidity consisted of $19,381 of cash, as compared to $525,720 of cash at December 31, 2014. In addition, our stockholders’ deficit was $73,277 at September 30, 2015, compared to stockholders’ equity of $499,738 at December 31, 2014, an increase in the deficit of $573,015.

Our operations used cash of $706,339 during the nine months ended September 30, 2015, as compared to using $388,560 in operating activities during the nine months ended September 30, 2014.

Financing activities provided cash of $200,000 during the nine months ended September 30, 2015, compared to $952,000 during the nine months ended September 30, 2014.

Our efforts are focused on increasing revenue while we explore external funding alternatives as our current cash is insufficient to fund operations for the next 12 months. Although our independent auditors have expressed substantial doubt about our ability to continue as a going concern, we feel that our revenue potential is sufficient for our business to continue as a going concern. However, in order to expand our product offerings, we expect that we will require additional investments and revenue.

As we continue to develop new products and identify specific commercialization opportunities, we will focus on those product markets and opportunities for which we might be able to get external funding through joint venture agreements, strategic partnerships, or other direct investments.

Going Concern

These interim unaudited financial statements have been prepared on the going concern basis, which assumes that adequate sources of financing will be obtained as required and that our assets will be realized and liabilities settled in the ordinary course of business. Accordingly, the interim unaudited financial statements do not include any adjustments related to the recoverability of assets and classification of assets and liabilities that might be necessary should we not be unable to continue as a going concern.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies

We have identified the policies outlined below as critical to our business operations and an understanding of our results of operations. The list is not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated U.S. GAAP, with no need for management’s judgment in their application. The impact and any associated risks related to these policies on our business operations is discussed throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations when such policies affect our reported and expected financial results. For a detailed discussion on the application of these and other accounting policies, see the notes to our December 31, 2014, consolidated financial statements. Note that our preparation of the consolidated financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. We cannot assure that actual results will not differ from those estimates.

Stock-based Compensation

We account for equity-based transactions with nonemployees under the provisions of FASB ASC Topic No. 505-50, Equity-Based Payments to Non-Employees (“ASC 505-50”). ASC 505-50 establishes that equity-based payment transactions with non-employees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The fair value of common stock issued for payments to nonemployees is measured at the market price on the date of grant. The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general, we recognize the fair value of the equity instruments issued as deferred stock compensation and amortize the cost over the term of the contract.

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We account for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation—Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.

Revenue Recognition

We follow FASB ASC Topic No. 605-10-S99-1, Revenue Recognition, for revenue recognition. We will recognize revenue when it is realized or realizable and earned. We consider revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists; (ii) the product has been shipped or the services have been rendered to the customer; (iii) the sales price is fixed or determinable; and (iv) collectability is reasonably assured.

Income Taxes

We follow FASB ASC 740-10-30, Income Taxes-Initial Measurement, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of income in the period that includes the enactment date.

We adopted FASB ASC 740-10-25, Accounting for Uncertainty in Income Taxes. ASC 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10-25, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740-10-25 also provides guidance on derecognition, classification, interest and penalties on income taxes, and accounting in interim periods and requires increased disclosures. We had no material adjustments to our liabilities for unrecognized income tax benefits according to the provisions of ASC 740-10-25.

Forward Looking Statements

Certain statements in this Quarterly Report on Form 10-Q are forward-looking statements within the meaning of Section 21E of the Exchange Act. Forward-looking statements are typically identified by use of the words “believe,” “may,” “could,” “should,” “expect,” “anticipate,” “estimate,” “project,” “propose,” “plan,” “intend,” and similar words and expressions. Statements that describe our future strategic goals, plans, objectives, and predictions are also forward-looking statements.

The forward-looking information is based on present circumstances and on our predictions respecting events that have not occurred, that may not occur, or that may occur with different consequences from those now assumed or anticipated. Readers of this report are cautioned that any forward-looking statements, including those regarding us or our management’s current beliefs, expectations, anticipations, estimations, projections, strategies, proposals, plans, or intentions, are not guarantees of future performance or results of events and involve known and unknown risks, uncertainties, and other factors that may cause the actual results or events to be materially different from those discussed in this report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required to provide the information required by this item.

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ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit to the Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms, and that information is accumulated and communicated to our management, including our principal executive and principal financial officers (whom we refer to in this periodic report as our Certifying Officers), as appropriate to allow timely decisions regarding required disclosure.  Our management evaluated, with the participation of our Certifying Officers, the effectiveness of our disclosure controls and procedures as of September 30, 2015, pursuant to Rule 13a-15(b) under the Securities Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of September 30, 2015, our disclosure controls and procedures were effective.

There were no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On July 10, 2015, we authorized the issuance of 24,038 shares of common stock per the terms of the licensing agreement with Loyl.Me. The shares were valued at $1.04 per share, the closing stock price on the date of grant, for total noncash stock compensation expense of $25,000.

On July 10, 2015, we authorized the issuance of 1,250,000 shares of common stock to Michael Tew, our CEO. The shares are to vest and be delivered over 2.5 years beginning with 125,000 shares on July 10, 2015, followed by 125,000 shares on the first day of each subsequent quarter. Shares will be valued at the closing stock price on the day of issuance. The first 125,000 shares were valued at $1.04 per share for total noncash compensation expense of $130,000.

On July 10, 2015, we authorized the issuance of 500,000 shares of common stock to Brandon Jennewine, our CTO. The shares are to vest and be delivered over 2.5 years beginning with 50,000 shares on July 10, 2015, followed by 50,000 shares on the first day of each subsequent quarter. Shares will be valued at the closing stock price on the day of issuance. The first 50,000 shares were valued at $1.04 per share for total noncash compensation expense of $52,000.

On July 10, 2015, we authorized the issuance of 250,000 shares of common stock to a consultant. The shares are to vest and be delivered over 2.5 years beginning with 25,000 shares on July 10, 2015, followed by 25,000 shares on the first day of each subsequent quarter. Shares will be valued at the closing stock price on the day of issuance. The first 25,000 shares were valued at $1.04 per share for total noncash compensation expense of $26,000.

On October 1, 2015, we authorized the issuance of 200,000 shares of common stock for compensation expense. The shares were valued at $0.29 per share, the closing stock price on the date of grant, for total noncash stock compensation expense of $58,000.

On October 10, 2015, we authorized the issuance of 77,640 shares of common stock per the terms of the licensing agreement with Loyl.Me. The shares were valued at $0.322 per share, the closing stock price on the date of grant, for total noncash stock compensation expense of $25,000.

The issuances of the shares to the above parties were made 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. The parties confirmed the foregoing and acknowledged, in writing, that the securities must be acquired and held for investment. All certificates evidencing the shares issued bear or will bear a restrictive legend. 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.

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ITEM 6. EXHIBITS

The following exhibits are filed as a part of this report:

Exhibit Number*	Title of Document	Location
Item 10	Material Contracts
10.09	Employment Agreement between CannaSys, Inc. and Michael A. Tew (executive), effective July 1, 2015	Incorporated by reference from Current Report on Form 8-K filed July 15, 2015
10.10	Employment Agreement between CannaSys, Inc. and Brandon C. Jennewine (executive), effective July 1, 2015	Incorporated by reference from Current Report on Form 8-K filed July 15, 2015
10.11	Grant of Restricted Stock between CannaSys, Inc. and Michael A. Tew, effective July 1, 2015	Incorporated by reference from Current Report on Form 8-K filed July 15, 2015
10.12	Grant of Restricted Stock between CannaSys, Inc. and Brandon C. Jennewine, effective July 1, 2015	Incorporated by reference from Current Report on Form 8-K filed July 15, 2015
10.13	Securities Purchase Agreement between CannaSys, LLC and EMA Financial, LLC dated October 14, 2015	Incorporated by reference from Current Report on Form 8-K filed October 23, 2015
10.14	10% Convertible Note between CannaSys, Inc. and EMA Financial, LLC dated October 14, 2015	Incorporated by reference from Current Report on Form 8-K filed October 23, 2015
Item 31	Rule 13a-14(a)/15d-14(a) Certifications
31.01	Certification of Principal Executive Officer Pursuant to Rule 13a-14	This filing.
31.02	Certification of Principal Financial Officer Pursuant to Rule 13a-14	This filing.
Item 32	Section 1350 Certifications
31.02	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	This filing.
32.02	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	This filing.

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Exhibit Number* Title of Document Location

Item 101**	Interactive Data File
101.INS	XBRL Instance Document	This filing.
101.SCH	XBRL Taxonomy Extension Schema	This filing.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase	This filing.
101.DEF	XBRL Taxonomy Extension Definition Linkbase	This filing.
101.LAB	XBRL Taxonomy Extension Label Linkbase	This filing.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase	This filing.

_______________

* All exhibits are numbered with the number preceding the decimal indicating the applicable SEC reference number in Item 601 and the number following the decimal indicating the sequence of the particular document.  Omitted numbers in the sequence refer to documents previously filed as an exhibit.

** Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or Annual Report for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Exchange Act of 1934 and otherwise are not subject to liability.

SIGNATURE PAGE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CANNASYS, INC.
	Registrant
Dated: November 12, 2015	By:	/s/ Michael A. Tew
		Michael A. Tew, Chief Executive Officer,
		Chief Financial Officer, Secretary, and Treasurer

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EX-31.01

Exhibit 31.01

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14

I, Michael A. Tew, certify that:

1.           I have reviewed this quarterly report on Form 10-Q of CannaSys, Inc.;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)           designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)           designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)           evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)           disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)           all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)           any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 12, 2015

/s/ Michael A. Tew

Michael A. Tew

Principal Executive Officer

EX-31.02

Exhibit 31.02

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13a-14

I, Michael A. Tew, certify that:

1.           I have reviewed this quarterly report on Form 10-Q of CannaSys, Inc.;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)           designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)           designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)           evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)           disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)           all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)           any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 12, 2015

/s/ Michael A. Tew

Michael A. Tew

Principal Financial Officer

EX-32.01

Exhibit 32.01

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CannaSys, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2015, as filed with the Securities and Exchange Commission (the “Report”), I, Michael A. Tew, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Michael A. Tew

Michael A. Tew

Chief Executive Officer

Novembert 12, 2015

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.02

Exhibit 32.02

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CannaSys, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2015, as filed with the Securities and Exchange Commission (the “Report”), I, Michael A. Tew, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Michael A. Tew

Michael A. Tew

Chief Financial Officer

November 12, 2015

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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Note 5 - Software License (Details) - Loyl.Me - USD ($)	9 Months Ended	21 Months Ended
	Sep. 30, 2015	Sep. 30, 2015
License agreement payment terms	The agreement requires nine installment payments of $25,000, each to be paid with a combination of cash and stock, and 8% of revenue from the use of the licensed technology
Payments to Acquire Technology		$ 205,000

XML

Note 4 - Property and Equipment

9 Months Ended

Sep. 30, 2015

Notes

Note 4 - Property and Equipment

NOTE 4 – PROPERTY AND EQUIPMENT

Furniture, fixtures, and equipment, stated at cost, less accumulated depreciation consisted of the following:

	September 30, 2015	December 31, 2014
Furniture, fixtures, and equipment	$8,403	$8,403
Less: accumulated depreciation	(2,519)	(416)
Fixed assets, net	$5,884	$7,987

Depreciation Expense

Depreciation expense for the nine months ended September 30, 2015 and 2014, was $2,103 and $0, respectively.

XML

Note 8 - Related-party Transactions (Details)	Dec. 31, 2014 USD ($)
Details
Due to a related party	$ 1,320

XML

Note 7 - Notes Payable (Details) - Investor	9 Months Ended
	Sep. 30, 2015 USD ($)
Debt Instrument, Face Amount	$ 200,000
Debt Instrument, Interest Rate, Stated Percentage	1.00%
Debt Instrument, Maturity Date	Mar. 01, 2016

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Note 9 - Stockholders' Equity (Deficit) (Details) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Sep. 30, 2015	Jul. 10, 2015	Apr. 10, 2015	Feb. 09, 2015
Chief Executive Officer
Share Price					$ 1.04
Deferred Compensation, Shares Authorized for Issuance	1,250,000			1,250,000
Deferred Compensation, Vesting Terms				The shares are to vest and be delivered over 2.5 years beginning with 125,000 shares on July 10, 2015, followed by 125,000 shares on the first day of each subsequent quarter
Deferred Compensation, Compensation Expense				$ 130,000
Officer
Share Price					1.04
Deferred Compensation, Shares Authorized for Issuance	500,000			500,000
Deferred Compensation, Vesting Terms				The shares are to vest and be delivered over 2.5 years beginning with 50,000 shares on July 10, 2015, followed by 50,000 shares on the first day of each subsequent quarter
Deferred Compensation, Compensation Expense				$ 52,000
Consultant
Share Price					1.04
Deferred Compensation, Shares Authorized for Issuance	250,000			250,000
Deferred Compensation, Vesting Terms				The shares are to vest and be delivered over 2.5 years beginning with 25,000 shares on July 10, 2015, followed by 25,000 shares on the first day of each subsequent quarter
Deferred Compensation, Compensation Expense				$ 26,000
Common Stock | Chief Executive Officer
Deferred Compensation, Shares Issued				125,000
Common Stock | Officer
Deferred Compensation, Shares Issued				50,000
Common Stock | Consultant
Deferred Compensation, Shares Issued				25,000
Loyl.Me
Share Price					$ 1.04	$ 1.47	$ 2.00
Allocated Share-based Compensation Expense	$ 25,000	$ 8,250	$ 50,000
Loyl.Me | Common Stock
Stock Issued During Period, Shares, License Agreement	24,038	5,612	25,000

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Note 10 - Subsequent Events (Details) - USD ($)			3 Months Ended
	Oct. 10, 2015	Oct. 01, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Jul. 10, 2015	Apr. 10, 2015	Feb. 09, 2015
Loyl.Me
Share Price						$ 1.04	$ 1.47	$ 2.00
Allocated Share-based Compensation Expense			$ 25,000	$ 8,250	$ 50,000
Common Stock | Loyl.Me
Stock Issued During Period, Shares, License Agreement			24,038	5,612	25,000
Subsequent Event
Share Price		$ 0.29
Allocated Share-based Compensation Expense		$ 58,000
Debt Instrument, Interest Rate, Stated Percentage			10.00%
Debt Instrument, Face Amount			$ 28,000
Subsequent Event | Loyl.Me
Share Price	$ 0.322
Allocated Share-based Compensation Expense	$ 25,000
Subsequent Event | Common Stock
Stock Issued During Period, Shares, Share-based Compensation		200,000
Subsequent Event | Common Stock | Loyl.Me
Stock Issued During Period, Shares, License Agreement	77,640

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Note 3 - Going Concern

9 Months Ended

Sep. 30, 2015

Notes

Note 3 - Going Concern

NOTE 3 – GOING CONCERN

As reflected in the accompanying financial statements, we have an accumulated deficit of $2,623,095 at September 30, 2015, had a net loss of $864,265, and used cash in operating activities of $706,339. This raises substantial doubt about our ability to continue as a going concern.

While we are attempting to increase operations and revenues, our cash position may not be significant enough to support our daily operations. Management intends to raise additional funds by way of debt and equity financing. Management believes that the actions presently being taken to further implement our business plan and generate increased revenues provide the opportunity for us to continue as a going concern. While we believe in the viability of our strategy to generate increased revenues and in our ability to raise additional funds, there can be no assurances to that effect. Our ability to continue as a going concern is dependent upon our ability to further implement our business plan and generate increased revenues.

The consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

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Condensed Balance Sheets - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Current Assets:
Cash	$ 19,381	$ 525,720
Accounts receivable	800	2,224
Prepaid expenses and other assets		2,828
Total Current Assets	20,181	530,772
Property & equipment, net	5,884	7,987
Software license	205,000	25,000
Deposit	12,502	12,502
Total Assets	243,567	576,261
Current Liabilities:
Accounts payable	54,723	21,133
Accrued expenses	62,121	54,070
Notes payable	200,000
Due to a related party		1,320
Total Current Liabilities	316,844	76,523
Total Liabilities	$ 316,844	$ 76,523
Commitments and Contingencies
Stockholders' Equity (Deficit):
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued
Common stock, $0.001 par value, 75,000,000 shares authorized, 11,298,405 and 11,043,755 shares issued and outstanding, respectively	$ 11,299	$ 11,044
Additional paid-in capital	2,538,519	2,247,524
Accumulated deficit	(2,623,095)	(1,758,830)
Total Stockholders' Equity (Deficit)	(73,277)	499,738
Total Liabilities and Stockholders' Equity (Deficit)	$ 243,567	$ 576,261

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Note 1 - Organization and Description of Business

9 Months Ended

Sep. 30, 2015

Notes

Note 1 - Organization and Description of Business

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Organization

We were organized as a Nevada corporation on August 25, 1999. On August 15, 2014, we entered into an Agreement and Plan of Merger to combine our business and activities with CannaSys, Inc., a privately held Colorado corporation focused on providing services to the cannabis industry (“CannaSys-Colorado”), into a single entity (the “Merger”). CannaSys-Colorado was originally formed on October 4, 2013, as a limited liability company, and converted to a corporation on June 26, 2014. Under the terms of the merger agreement, our wholly owned subsidiary formed to effectuate the Merger was merged with and into CannaSys-Colorado, the surviving entity, which then became our wholly owned subsidiary. By operation of the Merger, which was effective August 15, 2014, all of the CannaSys-Colorado outstanding common stock was converted into a total of 6,000,000 shares of our common stock, which then constituted 57.70% of our total issued and outstanding common stock. Our shareholders prior to the Merger retained an aggregate of 4,398,088 shares of common stock; we had no outstanding options or warrants to purchase shares of common stock.

Due to the CannaSys-Colorado shareholders controlling us after the Merger, CannaSys-Colorado was considered the accounting acquirer. The transaction was therefore recognized as a reverse acquisition of us by CannaSys-Colorado. The accompanying condensed consolidated financial statements are those of CannaSys-Colorado for all periods prior to the Merger.

In connection with the closing of the Merger and after meeting the requirements of the Securities Exchange Act of 1934, as amended (“Exchange Act”), on November 12, 2014, we filed amended and restated articles of incorporation with the Nevada Secretary of State that: (i) changed our name to CannaSys, Inc.; (ii) increased our authorized capital stock to 80,000,000 shares, consisting of 75,000,000 shares of common stock and 5,000,000 shares of preferred stock; (iii) authorized 5,000,000 shares of preferred stock; and (iv) made other modernizing, nonmaterial changes to our articles of incorporation.  Changing our corporate name to CannaSys, Inc. was a condition to the Merger transaction. The name change better reflects the nature of our principal business operations, and it became effective in the OTC Markets on December 2, 2014, when FINRA announced the name change. We have also received a new CUSIP number and our trading symbol was changed to “MJTK.”

Nature of Business

We provide technology services in the ancillary space of the cannabis industry. We are a technology company, and we do not produce, sell, or handle in any manner cannabis products.

As the current cannabis industry grows and gains momentum around the country, technology needs for the industry have been largely underserved. Our focus on this niche element of the industry creates many efficient and profitable tools for both industry owners and consumers.

Our business consists of four products currently in the marketplace—BumpUp, CannaCash, CannaTrade, and CannaLIMS—that together serve the entire cannabis industry from grower-wholesaler to end-user.

BumpUp is a content resource management platform or customer retention software designed to allow cannabis industry operators the ability to automatically market and target customers in the regulated cannabis markets. The BumpUp technology allows for strong social media ties and an electronic messaging system for cannabis industry operators to effectively and efficiently communicate with the customers with the goal of customer retention. The program is designed to comply with regulatory requirements. The program allows for a mobile application that is geographically restricted to be available only in states that allow safe-access laws to cannabis.

CannaTrade is a market-style matching system designed to serve legal medical and recreational cannabis and hemp markets. CannaTrade and its sister product, ExchangeHemp, bring the industry a secure, efficient, real-time wholesale product supply exchange and inventory management solution for connecting licensed wholesale buyers and sellers of all types of cannabis and non-cannabis products, while providing business logic to enhance governmental and regulatory compliance frameworks.

CannaCash is an affiliate-based membership rewards loyalty program designed specifically for the cannabis industry. An early version of CannaCash was introduced to the market in July 2014. The CannaCash points program and future gift-card/prepaid-card programs will be free for all cannabis customers and affordable for dispensaries and providers. CannaCash gift cards will be available in multiple denominations and will be redeemable at participating CannaCash locations. The CannaCash gift mechanism will allow for strong social media ties and an electronic solution for providing gift cards and other products to friends and family. CannaCash includes an internal control mechanism designed to comply with the regulatory requirements applicable to individual retail outlets and customers based on applicable state licensing information and customers’ addresses. We plan to integrate our CannaCash solution with our BumpUp loyalty rewards solution for a complete end-to-end consumer experience.

CannaLIMS provides a specific Laboratory Information Management System to regulated testing laboratories in regulated cannabis states. This software-based laboratory and information management system is designed specific to the cannabis industry and laboratory testing. The software features workflow and data tracking support, flexible architecture, and laboratory specified reporting output. We have currently released this product to the marketplace and are aggressively marketing to cannabis labs in regulated markets.

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Note 3 - Going Concern (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Details
Accumulated deficit	$ (2,623,095)		$ (2,623,095)		$ (1,758,830)
Net loss	$ (450,592)	$ (1,207,413)	(864,265)	$ (1,444,868)
Net cash used in operating activities			$ (706,339)	$ (388,560)

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Note 4 - Property and Equipment (Details) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Details
Depreciation Expense	$ 2,103	$ 0

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Note 2 - Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2015

Notes

Note 2 - Summary of Significant Accounting Policies

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These financial statements should be read in conjunction with the audited financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2014. The results of the nine months ended September 30, 2015, are not necessarily indicative of the results to be expected for the full year ending December 31, 2015.

Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control, and preventing and detecting fraud. Our system of internal accounting control is designed to assure, among other items, that: (1) recorded transactions are valid; (2) valid transactions are recorded; and (3) transactions are recorded in the proper period in a timely manner to produce financial statements that present fairly our financial condition, results of operations, and cash flows for the respective periods being presented.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts and transactions of CannaSys-Colorado, the accounting acquirer, from the date of its inception on October 4, 2013, and refer to the consolidated entity after taking the Merger transaction into effect. All intercompany transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in accordance with U.S. GAAP permits management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. All intercompany transactions have been eliminated in consolidation.

Concentrations of Credit Risk

We maintain our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. We continually monitor our banking relationships and consequently have not experienced any losses in our accounts. We believe we are not exposed to any significant credit risk on cash.

Cash and Cash Equivalents

We consider all highly liquid securities with original maturities of three months or less when acquired to be cash equivalents. There were no cash equivalents as of September 30, 2015, and December 31, 2014.

Reclassifications

Certain reclassifications have been made to the prior year financial information to conform to the presentation used in the financial statements for the three and nine months ended September 30, 2015.

Fair Value of Financial Instruments

The carrying amounts of cash and current liabilities approximate fair value because of the short-term maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. We do not hold or issue financial instruments for trading purposes, and we do not use derivative instruments.

The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:

·                     Level 1:         Quoted prices in active markets for identical assets or liabilities.

·                     Level 2:         Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.

·                     Level 3:         Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions.

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Fixed Assets

Fixed assets are carried at the lower of cost or net realizable value. Normal maintenance and repairs are charged to expense as incurred. When assets are sold or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in operations. Depreciation is computed using the straight-line method over the estimated useful life of the asset.

Depreciation is computed using the straight-line method over the following estimated useful lives:

Equipment	3 years
Furniture and fixtures	3 years

Earnings (Loss) per Common Share

Net income (loss) per common share is computed pursuant to ASC 260-10-45, Earnings per Share. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that we incorporated as of the beginning of the first period presented. As of September 30, 2015 and 2014, there were no potentially dilutive shares. 

Stock-based Compensation

We account for equity-based transactions with nonemployees under the provisions of ASC 505-50, Equity-Based Payments to Non-Employees (“ASC 505-50”). ASC 505-50 establishes that equity-based payment transactions with nonemployees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The fair value of common stock issued for payments to nonemployees is measured at the market price on the date of grant. The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general, we recognize the fair value of the equity instruments issued as deferred stock compensation and amortize the cost over the term of the contract.

We account for employee stock-based compensation in accordance with the guidance of FASB ASC 718, Compensation—Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.

Revenue Recognition

We follow ASC 605-10-S99-1, Revenue Recognition, for revenue recognition. We will recognize revenue when it is realized or realizable and earned. We consider revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists; (ii) the product has been shipped or the services have been rendered to the customer; (iii) the sales price is fixed or determinable; and (iv) collectability is reasonably assured.

Recently Issued Accounting Pronouncements

In August 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments: (1) provide a definition of the term “substantial doubt”; (2) require an evaluation every reporting period including interim periods; (3) provide principles for considering the mitigating effect of management’s plans; (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans; (5) require an express statement and other disclosures when substantial doubt is not alleviated; and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued).  The amendments in this update are effective for public and nonpublic entities for annual periods ending after December 15, 2016. Early adoption is permitted.

We have reviewed all other recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on our consolidated results of operations, financial position, and cash flows. Based on that review, these pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.

Income Taxes

We follow ASC 740-10-30, Income Taxes-Initial Measurement, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of income in the period that includes the enactment date.

We adopted ASC 740-10-25, Accounting for Uncertainty in Income Taxes. ASC 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10-25, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740-10-25 also provides guidance on derecognition, classification, interest and penalties on income taxes, and accounting in interim periods and requires increased disclosures. We had no material adjustments to our liabilities for unrecognized income tax benefits according to the provisions of ASC 740-10-25.

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Condensed Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Statement of Financial Position
Common Stock, par or stated value	$ 0.001	$ 0.001
Common Stock, shares authorized	75,000,000	75,000,000
Common Stock, shares issued	11,298,405	11,043,755
Common Stock, shares outstanding	11,298,405	11,043,755
Preferred Stock, par or stated value	$ 0.001	$ 0.001
Preferred Stock, shares authorized	5,000,000	5,000,000
Preferred Stock, shares issued	0	0

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Note 4 - Property and Equipment: Furniture, Fixtures, and Equipment at cost (Tables)

9 Months Ended

Sep. 30, 2015

Tables/Schedules

Furniture, Fixtures, and Equipment at cost

Furniture, fixtures, and equipment, stated at cost, less accumulated depreciation consisted of the following:

	September 30, 2015	December 31, 2014
Furniture, fixtures, and equipment	$8,403	$8,403
Less: accumulated depreciation	(2,519)	(416)
Fixed assets, net	$5,884	$7,987

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 12, 2015
Document and Entity Information
Entity Registrant Name	CANNASYS INC
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Entity Central Index Key	0001417028
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		11,576,045
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Entity Incorporation, Date of Incorporation	Aug. 25, 1999
Trading Symbol	mjtk

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Note 6 - Commitments and Contingencies: Schedule of Future Minimum Rental Payments for Operating Leases (Tables)

9 Months Ended

Sep. 30, 2015

Tables/Schedules

Schedule of Future Minimum Rental Payments for Operating Leases

Future minimum lease payments for the next four years are as follows:

Year	Amount
2015	$28,278
2016	35,423
2017	37,208
2018	6,251
	$107,160

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Condensed Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Statement
Sales revenue	$ 48,156	$ 1,627	$ 76,404	$ 1,627
Cost of goods sold	6,800	1,832	10,018	8,874
Gross Margin	41,356	(205)	66,386	(7,247)
Operating Expenses:
Professional fees	58,847	61,314	155,827	61,314
Salary and wage expense	335,297	1,098,398	572,151	1,148,747
General and administrative	96,394	47,496	200,585	227,560
Total Operating Expenses	490,538	1,207,208	928,563	1,437,621
Loss from Operations	(449,182)	(1,207,413)	(862,177)	(1,444,868)
Other expense:
Interest expense	(1,410)		(2,088)
Total other expense	(1,410)		(2,088)
Loss before provision for income taxes	$ (450,592)	$ (1,207,413)	$ (864,265)	$ (1,444,868)
Provision for income taxes
Net loss	$ (450,592)	$ (1,207,413)	$ (864,265)	$ (1,444,868)
Basic and diluted loss per common share	$ (0.04)	$ (0.13)	$ (0.08)	$ (0.24)
Weighted average number of common shares outstanding	11,274,053	9,062,217	11,135,605	6,020,440

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Note 7 - Notes Payable

9 Months Ended

Sep. 30, 2015

Notes

Note 7 - Notes Payable

NOTE 7 – NOTES PAYABLE

During the nine months ended September 30, 2015, we executed unsecured promissory notes to two accredited investors for a total of $200,000 in a private placement of our securities. The notes accrue interest at 1% per annum and are due and payable on March 1, 2016.

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Note 6 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2015

Notes

Note 6 - Commitments and Contingencies

NOTE 6 – COMMITMENTS AND CONTINGENCIES

Operating Lease

We currently occupy office space at 1720 S. Bellaire Street, Suite 325, Denver, CO. Our offices consist of approximately 1,786 rentable square feet. The lease term is 40 months and commenced on November 1, 2014.

Future minimum lease payments for the next four years are as follows:

Year	Amount
2015	$28,278
2016	35,423
2017	37,208
2018	6,251
	$107,160

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Note 4 - Property and Equipment: Furniture, Fixtures, and Equipment at cost (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Details
Furniture, fixtures, and equipment	$ 8,403	$ 8,403
Less: accumulated depreciation	(2,519)	(416)
Fixed assets, net	$ 5,884	$ 7,987

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Note 1 - Organization and Description of Business (Details) - shares	1 Months Ended	9 Months Ended
	Aug. 31, 2014	Sep. 30, 2015	Dec. 31, 2014	Nov. 12, 2014	Aug. 14, 2014
Entity Incorporation, Date of Incorporation		Aug. 25, 1999
Common Stock, shares outstanding		11,298,405	11,043,755		4,398,088
Warrants, Outstanding					0
Authorized Capital Stock				80,000,000
Common Stock, shares authorized		75,000,000	75,000,000	75,000,000
Preferred Stock, shares authorized		5,000,000	5,000,000	5,000,000
Common Stock
CannaSys outstanding common stock converted upon merger	6,000,000
CannaSys outstanding common stock, percent of shares acquired upon merger	57.70%

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Note 10 - Subsequent Events

9 Months Ended

Sep. 30, 2015

Notes

Note 10 - Subsequent Events

NOTE 10– SUBSEQUENT EVENTS

In accordance with FASB ASC 855-10, Subsequent Events we have analyzed our operations subsequent to September 30, 2015, and have determined that we do not have any material subsequent events to disclose in these financial other than the following.

On October 1, 2015, we authorized the issuance of 200,000 shares of common stock for compensation expense. The shares were valued at $0.29 per share, the closing stock price on the date of grant, for total noncash stock compensation expense of $58,000.

On October 10, 2015, we authorized the issuance of 77,640 shares of common stock per the terms of the licensing agreement with Loyl.Me. The shares were valued at $0.322 per share, the closing stock price on the date of grant, for total noncash stock compensation expense of $25,000.

On October 14, 2015, we entered into a Securities Purchase Agreement with EMA Financial, LLC, a Delaware limited liability company (“EMA”), and executed a 10% Convertible Note in favor of EMA in the principal amount of $28,000.

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Note 8 - Related-party Transactions

9 Months Ended

Sep. 30, 2015

Notes

Note 8 - Related-party Transactions

NOTE 8 – RELATED-PARTY TRANSACTIONS

As of December 31, 2014, we owed $1,320 for cash advances to the former president of Thermal Tennis. The advance was due on demand and non-interest-bearing. The advance was paid in the nine months ended September 30, 2015.

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Note 9 - Stockholders' Equity (Deficit)

9 Months Ended

Sep. 30, 2015

Notes

Note 9 - Stockholders' Equity (Deficit)

NOTE 9– STOCKHOLDERS’ EQUITY (DEFICIT)

On February 9, 2015, we authorized the issuance of 25,000 shares of common stock per the terms of the licensing agreement with Loyl.Me. The shares were valued at $2.00 per share, the closing stock price on the date of grant, for total noncash stock compensation expense of $50,000.

On April 10, 2015, we authorized the issuance of 5,612 shares of common stock per the terms of the licensing agreement with Loyl.Me. The shares were valued at $1.47 per share, the closing stock price on the date of grant, for total noncash stock compensation expense of $8,250.

On July 10, 2015, we authorized the issuance of 24,038 shares of common stock per the terms of the licensing agreement with Loyl.Me. The shares were valued at $1.04 per share, the closing stock price on the date of grant, for total noncash stock compensation expense of $25,000.

On July 10, 2015, we authorized the issuance of 1,250,000 shares of common stock to Michael Tew, our CEO. The shares are to vest and be delivered over 2.5 years beginning with 125,000 shares on July 10, 2015, followed by 125,000 shares on the first day of each subsequent quarter. Shares will be valued at the closing stock price on the day of issuance. The first 125,000 shares were valued at $1.04 per share for total noncash compensation expense of $130,000.

On July 10, 2015, we authorized the issuance of 500,000 shares of common stock to Brandon Jennewine, our CTO. The shares are to vest and be delivered over 2.5 years beginning with 50,000 shares on July 10, 2015, followed by 50,000 shares on the first day of each subsequent quarter. Shares will be valued at the closing stock price on the day of issuance. The first 50,000 shares were valued at $1.04 per share for total noncash compensation expense of $52,000.

On July 10, 2015, we authorized the issuance of 250,000 shares of common stock to a consultant. The shares are to vest and be delivered over 2.5 years beginning with 25,000 shares on July 10, 2015, followed by 25,000 shares on the first day of each subsequent quarter. Shares will be valued at the closing stock price on the day of issuance. The first 25,000 shares were valued at $1.04 per share for total noncash compensation expense of $26,000.

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Note 2 - Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2015

Policies

Basis of Presentation

Basis of Presentation

The accompanying unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These financial statements should be read in conjunction with the audited financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2014. The results of the nine months ended September 30, 2015, are not necessarily indicative of the results to be expected for the full year ending December 31, 2015.

Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control, and preventing and detecting fraud. Our system of internal accounting control is designed to assure, among other items, that: (1) recorded transactions are valid; (2) valid transactions are recorded; and (3) transactions are recorded in the proper period in a timely manner to produce financial statements that present fairly our financial condition, results of operations, and cash flows for the respective periods being presented.

Principles of Consolidation

Principles of Consolidation

The accompanying consolidated financial statements include the accounts and transactions of CannaSys-Colorado, the accounting acquirer, from the date of its inception on October 4, 2013, and refer to the consolidated entity after taking the Merger transaction into effect. All intercompany transactions have been eliminated in consolidation.

Use of Estimates

Use of Estimates

The preparation of financial statements in accordance with U.S. GAAP permits management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. All intercompany transactions have been eliminated in consolidation.

Concentrations of Credit Risk

Concentrations of Credit Risk

We maintain our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. We continually monitor our banking relationships and consequently have not experienced any losses in our accounts. We believe we are not exposed to any significant credit risk on cash.

Cash and Cash Equivalents

Cash and Cash Equivalents

We consider all highly liquid securities with original maturities of three months or less when acquired to be cash equivalents. There were no cash equivalents as of September 30, 2015, and December 31, 2014.

Reclassifications

Reclassifications

Certain reclassifications have been made to the prior year financial information to conform to the presentation used in the financial statements for the three and nine months ended September 30, 2015.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The carrying amounts of cash and current liabilities approximate fair value because of the short-term maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. We do not hold or issue financial instruments for trading purposes, and we do not use derivative instruments.

The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:

·                     Level 1:         Quoted prices in active markets for identical assets or liabilities.

·                     Level 2:         Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.

·                     Level 3:         Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions.

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Fixed Assets

Fixed Assets

Fixed assets are carried at the lower of cost or net realizable value. Normal maintenance and repairs are charged to expense as incurred. When assets are sold or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in operations. Depreciation is computed using the straight-line method over the estimated useful life of the asset.

Depreciation is computed using the straight-line method over the following estimated useful lives:

Equipment	3 years
Furniture and fixtures	3 years

Earnings (loss) Per Common Share

Earnings (Loss) per Common Share

Net income (loss) per common share is computed pursuant to ASC 260-10-45, Earnings per Share. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that we incorporated as of the beginning of the first period presented. As of September 30, 2015 and 2014, there were no potentially dilutive shares. 

Stock-based Compensation

Stock-based Compensation

We account for equity-based transactions with nonemployees under the provisions of ASC 505-50, Equity-Based Payments to Non-Employees (“ASC 505-50”). ASC 505-50 establishes that equity-based payment transactions with nonemployees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The fair value of common stock issued for payments to nonemployees is measured at the market price on the date of grant. The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general, we recognize the fair value of the equity instruments issued as deferred stock compensation and amortize the cost over the term of the contract.

We account for employee stock-based compensation in accordance with the guidance of FASB ASC 718, Compensation—Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.

Revenue Recognition

Revenue Recognition

We follow ASC 605-10-S99-1, Revenue Recognition, for revenue recognition. We will recognize revenue when it is realized or realizable and earned. We consider revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists; (ii) the product has been shipped or the services have been rendered to the customer; (iii) the sales price is fixed or determinable; and (iv) collectability is reasonably assured.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In August 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments: (1) provide a definition of the term “substantial doubt”; (2) require an evaluation every reporting period including interim periods; (3) provide principles for considering the mitigating effect of management’s plans; (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans; (5) require an express statement and other disclosures when substantial doubt is not alleviated; and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued).  The amendments in this update are effective for public and nonpublic entities for annual periods ending after December 15, 2016. Early adoption is permitted.

We have reviewed all other recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on our consolidated results of operations, financial position, and cash flows. Based on that review, these pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.

Income Taxes

Income Taxes

We follow ASC 740-10-30, Income Taxes-Initial Measurement, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of income in the period that includes the enactment date.

We adopted ASC 740-10-25, Accounting for Uncertainty in Income Taxes. ASC 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10-25, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740-10-25 also provides guidance on derecognition, classification, interest and penalties on income taxes, and accounting in interim periods and requires increased disclosures. We had no material adjustments to our liabilities for unrecognized income tax benefits according to the provisions of ASC 740-10-25.

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Note 2 - Summary of Significant Accounting Policies: Fixed Assets (Details)	9 Months Ended
	Sep. 30, 2015
Equipment
Estimated Useful Life	3 years
Furniture and Fixtures
Estimated Useful Life	3 years

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Note 6 - Commitments and Contingencies (Details)	9 Months Ended
	Sep. 30, 2015 ft²
Details
Square Footage of Office Space	1,786
Lease Term	40 years

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Condensed Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flow from operating activities
Net loss	$ (864,265)	$ (1,444,868)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	2,103	0
Stock based compensation	208,000
Change in operating assets and liabilities:
Decrease in accounts receivable	1,424
Decrease in prepaids	2,828	1,685
Increase in other assets	(96,750)
Increase (decrease) in related-party payable	(1,320)	1,320
Increase in accounts payable	33,590	20,361
Increase in accrued expenses	8,051	1,032,942
Net cash used in operating activities	(706,339)	(388,560)
Cash flows provided by investing activities:
Cash acquired in merger		35,719
Net cash provided by investing activities		35,719
Cash flows from financing activities:
Proceeds from loans	200,000	500,000
Proceeds from sale of common stock		200,000
Proceeds from stock subscription payable		252,000
Net cash provided by financing activities	200,000	952,000
Net increase (decrease)in cash	(506,339)	599,159
Cash at beginning of the period	525,720	88,389
Cash at end of the period	$ 19,381	$ 687,548
Supplemental Disclosures:
Interest paid
Income taxes paid
Supplemental disclosure of non-cash activities
Common stock issued for software license	$ 83,249

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Note 5 - Software License

9 Months Ended

Sep. 30, 2015

Notes

Note 5 - Software License

NOTE 5 – SOFTWARE LICENSE

Effective February 12, 2015, we entered into an exclusive licensing agreement with Loyl.Me, an established provider of automated marketing and customer relationship management software. The licensing agreement allows us the opportunity for perpetual and exclusive rights and ability to provide the cannabis community a convenient, cost-effective, and streamlined technology that is widely used in the non-cannabis industry. The technology is being branded as “CannaCash BumpUp.” The term of the agreement is perpetual; therefore, no amortization is being recognized. However, the value of the license will undergo an annual impairment test as required by ASC 350, Intangibles—Goodwill and Other. The agreement requires nine installment payments of $25,000, each to be paid with a combination of cash and stock, and 8% of revenue from the use of the licensed technology. As of September 30, 2015, we had paid $205,000 in cash and stock towards the total cost of the license.

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Note 6 - Commitments and Contingencies: Schedule of Future Minimum Rental Payments for Operating Leases (Details)	Sep. 30, 2015 USD ($)
Details
2015	$ 28,278
2016	35,423
2017	37,208
2018	6,251
Total	$ 107,160

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Note 2 - Summary of Significant Accounting Policies: Cash and Cash Equivalents (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Details
Cash Equivalents, at Carrying Value	$ 0	$ 0