On August 10, 2017, the Company issued a Convertible Promissory Note to the Daniel Jonathan Blech Trust DTD 9/01/2005 in the amount of $130,000. Mr. Blech, a member of the Company’s board of directors, is the trustee. The Convertible Promissory Note bears interest at the rate of 9% has maturity date of October 1, 2017, and a voluntary conversion into an upcoming financing in the event the Company closes the financing and receives gross proceeds totaling at least $200,000. The conversion rate will be at the same terms of the financing.

Reference is made to the discussion in Item 1.01 above with respect to the obligation of the Company to the Note.

As stated in Item 1.01 above, which information is hereby incorporated herein by this reference, effective as of July 11, 2017, the Company sold the Note to the Daniel Jonathan Blech Trust DTD 9/01/2005. The Company received proceeds of $130,000 under the Note.

The Note was not registered under the Securities Act of 1933, as amended (the “Act”), in reliance upon the exemption from registration contained in Section 4(2) of the Act. The Note and the shares of Common Stock issuable upon the conversion of the Note may not be reoffered or sold in the United States by the holder in the absence of an effective registration statement or exemption from the registration requirements of the Act.

The Company intends to use the proceeds from the sale of the Note for working capital and general corporate purposes.

About SPENDSMART NETWORKS, INC. (OTCMKTS:SSPC)

SpendSmart Networks, Inc. (SpendSmart) is a full-service mobile and loyalty marketing agency that offers a means for small and large business owners to connect with their consumers and generate sales. The Company provides loyalty systems, and digital engagement and marketing services through its Mobile and Loyalty Marketing programs and Website building software. Its business involves over two licenses, which include, among other things, a software as a service (SaaS) system, marketing and sales training materials, and mobile-responsive Website building software. It operates under the name SMS Masterminds. It provides training materials, best practice guides and other resources to its licensees. The licensees also utilize loyalty kiosks provided to their merchants. The loyalty kiosks are tablet devices set up in physical retail locations where consumers can enter their mobile phone number to opt-in to receive notifications from the merchant.