Accelerize Inc. (Form: 8-K/A, Received: 09/03/2019 16:02:21)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): September 3, 2019 (June 18, 2019)

ACCELERIZE INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

000-52635		20-3858769
(Commission File Number)		(IRS Employer Identification No.)

2601 Ocean Park Blvd., Suite 310 Santa Monica, California		90405
(Address of Principal Executive Offices)		(Zip Code)

310-314-8804

(Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.01 Completion of Acquisition or Disposition of Assets

As previously disclosed, on May 15, 2019, Accelerize Inc. (the “Company”) entered into an asset purchase agreement with Emerging Growth LLC (the “Seller”), pursuant to which the Company will acquire certain assets from the Seller related to its sponsored content and marketing business (the “Purchase”). The closing of the Purchase occurred on June 20, 2019. On June 21, 2019, the Company filed a Current Report on Form 8-K (the “Form 8-K”) with the Securities and Exchange Commission to disclose the closing of the Purchase. The Company indicated in the Form 8-K that it would file the financial statements relating to the Purchase, along with required pro-forma financial information, no later than 71 calendar days after the date on which the Form 8-K was required to be filed. This Amendment No. 1 to the Form 8-K is being filed to provide the required financial information.

Item 9.01

Financial Statements and Exhibits.

(a)	Financial Statements of Business Acquired

(1)	Audited financial statements relating to the Purchase for the years ended December 31, 2018 and 2017, including unaudited financial statements as of and for the three months ended March 31, 2019, filed as Exhibit 99.1 hereto and incorporated herein by reference.

(b)	Pro Forma Financial Information

(1)	Unaudited pro forma financial information for the year ended December 31, 2018 and the three-month period ended March 31, 2019 giving effect to the Purchase, filed as Exhibit 99.2 hereto and incorporated herein by reference.

SIGNATURES

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.

		ACCELERIZE INC.
	By:	/s/ Brian Ross
	Name:	Brian Ross
	Title:	President and Chief Executive Officer

Date: September 3, 2019

Exhibit 99.1

Financial Statements
Independent Auditors' Report	F-1
Carve-Out Balance Sheets - December 31, 2018 and 2017 and March 31, 2019 (unaudited)	F-2
Carve-Out Statements of Operations - Years Ended December 31, 2018 and 2017 and for the Three Months Ended March 31, 2019 (unaudited)	F-3
Carve-Out Statements of Changes in Invested Equity (Deficit) - Years Ended December 31, 2018 and 2017 and for the Three Months Ended March 31, 2019 (unaudited)	F-4
Carve-Out Statements of Cash Flows - Years Ended December 31, 2018 and 2017 and for the Three Months Ended March 31, 2019 (unaudited)	F-5
Notes to Carve-Out Financial Statements	F-6

805 Third Avenue

14^th Floor

New York, NY 10022

212.838-5100

212.838.2676/ Fax

www.rbsmllp.com

Independent Auditors’ Report

To those charged with governance of
Cannabis Financial Network

We have audited the accompanying carve-out financial statements of Cannabis Financial Network, a carve-out of certain operations of Emerging Growth, LLC (the “Company”), which comprise of the carve-out balance sheets as of December 31, 2018 and 2017, and the related carve-out statements of operations, changes in invested equity (deficit) and cash flows for each of the two years in the period ended December 31, 2018, and the related notes to the carve-out financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these carve-out financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of carve-out financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these carve-out financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the carve-out financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the carve-out financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the carve-out financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the carve-out financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the carve-out financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the carve-out financial statements referred to above present fairly, in all material respects, the financial position of Cannabis Financial Network, a carve-out of certain operations of Emerging Growth, LLC as of December 31, 2018 and 2017, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

New York, NY

September 3, 2019

F-1

Cannabis Financial Network

(Carve-Out of Certain Operations of Emerging Growth, LLC)

Carve-Out Balance Sheets

	December 31,			December 31,			March 31,
	2018			2017			2019
							(Unaudited)

Assets
Current assets
Cash	$	-		$	-		$	-
Accounts receivable		58,572			20,869			142,530
Current assets		58,572			20,869			142,530

Equipment, net		2,782			4,059			2,482
Total assets	$	61,354		$	24,928		$	145,012

Liabilities and Invested Equity (Deficit)
Current liabilities
Accounts payable	$	97,496		$	76,636		$	77,568
Deferred revenue		56,932			13,722			33,509
Total liabilities		154,428			90,358			111,077

Invested equity (deficit)		(93,074	)		(65,430	)		33,935
Total liabilities and invested equity (deficit)	$	61,354		$	24,928		$	145,012

See accompanying notes to carve-out financial statements

F-2

Cannabis Financial Network

(Carve-Out of Certain Operations of Emerging Growth, LLC)

Carve-Out Statements of Operations

							Three Months
	Year Ended			Year Ended			Ended
	December 31,			December 31,			March 31,
	2018			2017			2019
							(Unaudited)

Revenue	$	2,199,319		$	1,267,730		$	563,782

Cost of revenue		1,408,101			791,110			409,342

Gross margin		791,218			476,620			154,440

Operating expenses		160,405			126,718			24,691

Income from operations		630,813			349,902			129,749

Interest (expense)		(5,844	)		(5,435	)		(1,592	)

Net income	$	624,969		$	344,467		$	128,157

See accompanying notes to carve-out financial statements

F-3

Cannabis Financial Network

(Carve-Out of Certain Operations of Emerging Growth, LLC)

Carve-Out Statements of Changes in Invested Equity (Deficit)

	Invested Equity
	(Deficit)

Balance at December 31, 2016	$	(56,054	)

Net distributions to Emerging Growth		(353,843	)
Net income		344,467

Balance at December 31, 2017	$	(65,430	)

Net distributions to Emerging Growth		(652,613	)
Net income		624,969

Balance at December 31, 2018	$	(93,074	)

Net distributions to Emerging Growth (unaudited)		(1,148	)
Net income (unaudited)		128,157

Balance at March 31, 2019 (unaudited)	$	33,935

See accompanying notes to carve-out financial statements

F-4

Cannabis Financial Network

(Carve-Out of Certain Operations of Emerging Growth, LLC)

Carve-Out Statements of Cash Flows

							Three Months
	Year Ended			Year Ended			Ended
	December 31,			December 31,			March 31,
	2018			2017			2019
							(Unaudited)
Cash flows from operating activities
Net income	$	624,969		$	344,467		$	128,157
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		1,277			1,222			300

Changes in operating assets and liabilities:
Accounts receivable		(37,703	)		(17,966	)		(83,958	)
Accounts payable		20,860			20,241			(19,928	)
Deferred revenue		43,210			8,932			(23,423	)

Net cash provided by operating activities		652,613			356,896			1,148

Cash flows from investing activities
Purchase of property and equipment		-			(3,053	)		-

Net cash used in investing activities		-			(3,053	)		-

Cash flows from financing activities
Net distributions to Emerging Growth, LLC		(652,613	)		(353,843	)		(1,148	)

Net cash used in financing activities		(652,613	)		(353,843	)		(1,148	)

Net change in cash		-			-			-
Cash and restricted cash, beginning of the period		-			-			-
Cash and restricted cash, end of the period	$	-		$	-		$	-

Supplemental disclosure of cash flow information:
Interest paid	$	5,844		$	5,435		$	1,592
Income taxes paid	$	-		$	-		$	-

See accompanying notes to carve-out financial statements

F-5

Cannabis Financial Network

(Carve-Out of Certain Operations of Emerging Growth, LLC)

Notes to Financial Statements

Note 1 – Description of Business

The accompanying carve-out financial statements include the historical accounts of Cannabis Financial Network (“CFN” or the “Company”). The Company is an integrated business segment of Emerging Growth, LLC (“EG”) and not a stand-alone entity. The Company operates a financial network that advertises and promotes legal cannabis-related businesses to help them attract investors, customers, capital and media visibility.

Note 2 – Significant Accounting Policies

Basis of Presentation

The accompanying carve-out financial statements of the Company are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The financial statements of the Company reflect the assets, liabilities, revenue and expenses directly attributable to CFN, as well as allocations deemed reasonable by management to present the financial statements of CFN on a stand-alone basis. Certain shared costs incurred by EG have been allocated to CFN using methodologies deemed appropriate by management, which were primarily based on the proportionate revenue of CFN compared to EG. The net results of transactions between CFN and EG are reflected as distributions within invested equity in the accompanying carve-out balance sheets. The financial information included herein may not necessarily reflect the financial position and results of operations of CFN in the future or what they would have been had CFN been a separate, stand-alone entity during the periods presented.

The unaudited financial statement presented as of and for the three months ended March 31, 2019 reflect all normal recurring adjustments, which in the opinion of management, are necessary to fairly present the financial position, results of operations, and cash flows for the periods ended in accordance with GAAP. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of results for the entire year ending December 31, 2019.

Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and assumptions are based on historical information, information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates.

Cash

The Company utilizes EG’s centralized processes for cash receipts and disbursements. As such, substantially all cash received by the Company was deposited in and commingled with EG’s corporate funds and is not specifically allocated to the Company’s business. As a result, the Company does not hold any cash.

Accounts Receivable

Accounts receivable are carried at net realizable value, representing the outstanding balance less an allowance for doubtful accounts based on a review of all outstanding amounts. Management determines the allowance for doubtful accounts by reviewing individual customer receivables and considering each customer’s financial condition and credit history, as well as current economic conditions. The Company had no allowance for doubtful accounts as of December 31, 2018 or 2017.

F-6

Equipment

Equipment is recorded at historical cost and depreciated on a straight-line basis over their estimated useful lives of 5 years.

Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the estimated future cash flows from use of the asset are less than the carrying amount. There were no impairment losses during the year ended December 31, 2018 or 2017.

Fair Value of Financial Instruments

The Company’s financial instruments include accounts receivable and accounts payable. The carrying amount of these financial instruments approximates fair value due to their short-term maturities.

Concentration of Credit Risk

The Company had three customers that made up 37%, 24% and 18% of accounts receivable at December 31, 2018. The Company had three customers that made up 38%, 31% and 15% of accounts receivable at December 31, 2017.

Revenue Recognition

The Company sells promotional service packages to its customers ranging from 3 to 6 months. The Company offers different packages tailored to the type and stage of the potential customer, such as public companies looking to increase their shareholder base, as well as private companies potentially looking to go public and attract capital and publicity. The services provided by the Company include publishing of interviews and articles across CFN’s network and featuring of client content on CFN’s newsletters and social media. The packages all have fixed prices that are billed monthly over the terms of the agreement in even amounts.

During the years ended December 31, 2018 and 2017, the Company recognized revenue from services in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605, “Revenue Recognition” when it was both earned and realizable. Revenue was considered earned and realizable only when the price is fixed and determinable, persuasive evidence of arrangement exists, the service is performed, and collectability of the resulting receivable is reasonably assured.

As services are provided evenly to the customer over the term of the contract, the Company recognizes revenue on a straight-line basis over the term of the contract. To the extent the revenue recognized exceeds the amounts collected at the period end, the amounts are recorded as accounts receivable. In the event collections exceed the amounts recognized as revenue at the period end, the amounts are recorded as deferred revenue.

Effective January 1, 2019, the Company adopted the provisions of ASC 606, “Revenue from Contracts with Customers,” which supersedes the guidance in ASC 605. The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as the Company satisfies a performance obligation.

The Company recognizes revenue for its performance obligation associated with its contracts with customers over time as work is performed, which is deemed to occur evenly throughout the duration of the contract. This also reflects the pattern in which costs are incurred on performing the contracts.

F-7

Income Taxes

The operations of CFN are a business segment of EG and not a stand-alone entity. EG is a limited liability company, and thus does not pay federal or state income taxes at the entity level. Taxable earnings flow through to the individual members and are taxed at the member level. Therefore, no provision or liability for income taxes has been included in the accompanying carve-out financial statements of CFN. Had CFN operated as a stand-alone entity, or a component of another entity with a different legal structure, the operations may have been subjected to income tax at the entity level.

Advertising

Advertising costs are expensed as incurred. Advertising costs incurred amounted to $328,309 and $124,586 for the years ended December 31, 2018 and 2017, respectively. Advertising costs incurred amounted to $111,368 (unaudited) for the three months ended March 31, 2019.

Recent Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers.” This ASU supersedes the revenue recognition requirements in ASC 605, “Revenue Recognition” and most industry-specific guidance. The ASC requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Related to this ASU, ASU No. 2016-10 (Topic 606) was issued in May 2016 which clarifies guidance for identifying performance obligations and considerations about licensing revenue. For private companies, these ASUs are effective for fiscal years beginning after December 15, 2018, and for interim periods within those fiscal years. These ASUs apply to all companies that enter into contracts with customers to transfer goods or services. The Company does not expect the adoption of this standard to have a material effect on its financial position, results of operations, and cash flows.

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This ASU’s purpose is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This update affects any entity that enters into a lease, with some specified scope exemptions. The amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact of adopting the ASU.

Note 3 – Equipment, Net

The Company’s equipment consisted of the following.

	December 31,			December 31,			March 31,
	2018			2017			2019
							(Unaudited)

Equipment	$	6,387		$	6,387		$	6,387
Accumulated depreciation		(3,605	)		(2,328	)		(3,905	)

Equipment, net	$	2,782		$	4,059		$	2,482

Depreciation expense for the year ended December 31, 2018 and 2017 amounted to $1,277 and $1,222, respectively. Depreciation expense for the three months ended March 31, 2019 amounted to $300 (unaudited).

Note 4 – Subsequent Events

The Company has evaluated subsequent events from the balance sheet date through September 3, 2019, for purposes of disclosure or recognition in the financial statements.

On May 15, 2019, EG entered into an asset purchase agreement (the “Agreement”), with Accelerize Inc. (“Accelerize”), pursuant to which EG will sell substantially all the assets related to CFN to Accelerize. The closing of the asset purchase pursuant to the Agreement occurred on June 20, 2019. In connection with the closing of the asset purchase pursuant to the Agreement, Accelerize paid the following consideration to EG for the acquisition of CFN: (i) $420,000 in cash, (ii) issued 3,000 shares of Accelerize’s Series B Preferred Stock, each with a stated value per share of $1,000 which will bear interest at 6% per annum and be convertible into Accelerize’s common stock at the election of the EG at a conversion price per share to be mutually agreed between Accelerize and EG in the future, without voting rights or a liquidation preference, except with respect to accrued penalty interest, and (iii) issued an aggregate of 30,000,000 restricted shares of Accelerize’s common stock.

F-8

Exhibit 99.2

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Introduction

On May 15, 2019, Accelerize Inc. (the “Company”) entered into an asset purchase agreement (the “Emerging Growth Agreement”) with Emerging Growth LLC (the “Seller”), pursuant to which the Company will acquire certain assets from the Seller related to its sponsored content and marketing business, Cannabis Financial Network (“CFN”). The closing of the asset purchase occurred on June 20, 2019. Pursuant to the terms of the Emerging Growth Agreement, the Company acquired certain assets of CFN from the Seller for a purchase price consideration consisting of $420,000 in cash, 30,000,000 shares of the Company’s common stock valued at $2,700,000, and 3,000 shares of Series B preferred stock valued at $687,000. As a result, the total purchase price amounted to $3,807,000.

The Unaudited Pro Forma Condensed Combined Balance Sheet is presented as of March 31, 2019, giving effect to the Emerging Growth Agreement as if it occurred on March 31, 2019. The Unaudited Pro Forma Condensed Combined Statement of Operations for the three months ended March 31, 2019 and the year ended December 31, 2018 gives effect to the Emerging Growth Agreement as if it occurred on January 1, 2018, the beginning of the earliest period presented.

The Unaudited Pro Forma Condensed Combined Financial Statements have been derived from, and should be read in conjunction with, the following:

● The Accelerize Inc. consolidated financial statements and notes thereto as of and for the year ended December 31, 2018 included in the Annual Report on Form 10-K filed on April 16, 2019 with the SEC.

● The Accelerize Inc. unaudited condensed consolidated financial statements and notes thereto as of and for the three months ended March 31, 2019 included in the Quarterly Report on Form 10-Q filed on May 20, 2019 with the SEC.

● The historical carve-out financial statements of CFN and notes thereto as of and for the years ended December 31, 2018 and 2017, as well as the unaudited carve-out financial statements of CFN and notes thereto as of and for the three months ended March 31, 2019 included in this Form 8-K/A.

The Unaudited Pro Forma Condensed Combined Financial Statements were prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The unaudited pro forma adjustments reflecting the acquisition have been prepared in accordance with the business combination accounting guidance and reflect the preliminary allocation of the purchase price to the acquired assets and liabilities based upon the preliminary estimate of fair values, using the assumptions set forth in the notes to the Unaudited Pro Forma Condensed Combined Financial Statements. The detailed adjustments and underlying assumptions used to prepare the Unaudited Pro Forma Condensed Combined Financial Statements are contained in the notes hereto and should be reviewed in their entirety.

The historical financial statements have been adjusted to give pro forma effect to events that are (i) directly attributable to the Emerging Growth Agreement, (ii) factually supportable, and (iii) with respect to the statement of operations, expected to have a continuing impact on the combined results.

The Unaudited Pro Forma Condensed Combined Financial Statements are provided for illustrative purposes only and are not necessarily indicative of what the operating results or financial position of the combined organization would have been had the Emerging Growth Agreement occurred on the respective dates indicated above, nor are they indicative of the future results or financial position of the combined organization. In connection with the Unaudited Pro Forma Condensed Combined Financial Statements, the total purchase consideration was allocated based on the best estimates of fair value of the assets acquired and liabilities assumed. The allocation is dependent upon certain valuation and other analyses that are not yet final. Accordingly, the pro forma acquisition price adjustments are preliminary and subject to further adjustments as additional information becomes available and as additional analyses are performed. There can be no assurances that the final valuations will not result in material changes to the preliminary estimated purchase price allocation.

The Unaudited Pro Forma Condensed Combined Financial Statements also do not give effect to the potential impact of current financial conditions, regulatory matters, any anticipated synergies, operating efficiencies or cost savings that may result from the Emerging Growth Agreement or any integration costs.

Accelerize Inc.

Unaudited Pro Forma Condensed Combined Balance Sheet

March 31, 2019

						Pro Forma				Pro Forma
	Accelerize Inc.			CFN		Adjustments			Notes	Combined

Cash	$	544,346		$	-	$	(420,000	)	[a]	$	124,346
Restricted cash		50,000			-		-				50,000
Accounts receivable, net		2,232,745			142,530		(2,375,275	)	[d], [e]		-
Prepaid expenses and other current assets		165,658			-		(165,658	)	[d]		-
Current assets from discontinued operations		-			-		2,398,403		[d]		2,398,403
Total current assets		2,992,749			142,530		(562,530	)			2,572,749

Property and equipment		42,130			2,482		(42,429	)	[d], [e]		2,183
Operating lease right-of-use asset		1,503,669			-		(1,503,669	)	[d]		-
Goodwill		-			-		3,804,817		[c]		3,804,817
Other assets		109,766			-		(109,766	)	[d]		-
Noncurrent assets from discontinued operations		-			-		1,655,565		[d]		1,655,565
Total other assets		1,655,565			2,482		3,804,518				5,462,565
Total assets	$	4,648,314		$	145,012	$	3,241,988			$	8,035,314

Accounts payable and accrued expenses	$	4,112,359		$	77,568	$	(4,189,927	)	[d], [e]	$	-
Deferred revenues		239,029			33,509		(272,538	)	[d]		-
Credit facility, short-term		2,902,259			-		(2,902,259	)	[d]		-
Operating lease liability, short-term		296,461			-		(296,461	)	[d]		-
Current liabilites from discontinued operations		-			-		7,550,108		[d]		7,550,108
Total current liabilities		7,550,108			111,077		(111,077	)			7,550,108

Credit facility, net		6,668,493			-		(6,668,493	)	[d]		-
Other related party loan, net		403,580			-		(403,580	)	[d]		-
Other long-term loan, net		2,341,009			-		(2,341,009	)	[d]		-
Operating lease liability, long-term		1,362,750			-		(1,362,750	)	[d]		-
Other liabilities		531,250			-		(531,250	)	[d]		-
Noncurrent liabilities from discontinued operations		-					11,307,082		[d]		11,307,082
Total liabilities		18,857,190			111,077		(111,077	)			18,857,190

Commitments and contingencies

Stockholders' equity (deficit)
Series A Preferred Stock; $0.001 par value		-			-		-				-
Series B Preferred Stock; $0.001 par value		-			-		3		[a]		3
Common stock; $0.001 par value		66,179			-		30,000		[a]		96,179
Additional paid-in capital		29,773,130			33,935		3,323,062		[a]		33,130,127
Accumulated deficit		(43,973,761	)		-		-				(43,973,761	)
Accumulated other comprehensive income		(74,424	)		-		-				(74,424	)
Total stockholders' equity (deficit)		(14,208,876	)		33,935		3,353,065				(10,821,876	)
Total liabilities and stockholders' equity	$	4,648,314		$	145,012	$	3,241,988			$	8,035,314

See accompanying notes to Unaudited Pro Forma Condensed Combined Financial Statements

Accelerize Inc.

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Three Months Ended March 31, 2019

	For the Three Months Ended March 31, 2019
							Pro Forma				Pro Forma
	Accelerize Inc.			CFN			Adjustments			Notes	Combined


Net revenues	$	4,825,822		$	563,782		$	(4,825,822	)	[f]	$	563,782
Cost of revenue		1,829,373			409,342			(1,829,373	)	[f]		409,342
Gross profit		2,996,449			154,440			(2,996,449	)			154,440

Operating expenses:
Research and development		779,248			-			(779,248	)	[f]		-
Sales and marketing		856,439			-			(856,439	)	[f]		-
General and administrative		1,649,282			24,691			(1,360,281	)	[f]		313,692
Total operating expenses		3,284,969			24,691			(2,995,968	)			313,692

Loss from operations		(288,520	)		129,749			(481	)			(159,252	)

Other income (expense):
Other income		56			-			(56	)	[f]		-
Other expense		(725,173	)		(1,592	)		725,173		[f]		(1,592	)
Total other income (expense)		(725,117	)		(1,592	)		725,117				(1,592	)
Net income (loss) from continuing operations		(1,013,637	)		128,157			724,636				(160,844	)
Loss from discontinued operations		-			-			(724,636	)	[f]		(724,636	)
Net income (loss)	$	(1,013,637	)	$	128,157		$	-			$	(885,480	)
Preferred stock interest		-			-			45,000		[g]		45,000
Net income (loss) available to common shareholders	$	(1,013,637	)	$	128,157		$	(45,000	)		$	(930,480	)

Net loss per share, basic and diluted	$	(0.02	)	$	NA						$	(0.01	)

Weighted average number of common shares outstanding, basic and diluted		66,179,709		NA						[h]		96,179,709

See accompanying notes to Unaudited Condensed Combined Financial Statements

Accelerize Inc.

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Year Ended December 31, 2018

	For the Year Ended December 31, 2018
							Pro Forma				Pro Forma
	Accelerize Inc.			CFN			Adjustments			Notes	Combined


Net revenues	$	21,729,605		$	2,199,319		$	(21,729,605	)	[f]	$	2,199,319
Cost of revenue		9,075,828			1,408,101			(9,075,828	)	[f]		1,408,101
Gross profit		12,653,777			791,218			(12,653,777	)			791,218

Operating expenses:
Research and development		4,165,586			-			(4,165,586	)	[f]		-
Sales and marketing		4,301,712			-			(4,301,712	)	[f]		-
General and administrative		8,298,748			160,405			(7,006,874	)	[f]		1,452,279
Impairment loss		4,724,746			-			(4,724,746	)	[f]		-
Total operating expenses		21,490,792			160,405			(20,198,918	)			1,452,279

Loss from operations		(8,837,015	)		630,813			7,545,141				(661,061	)

Other income (expense):
Other income		621						(621	)	[f]		-
Other expense		(2,581,046	)		(5,844	)		2,581,046		[f]		(5,844	)
Total other income (expense)		(2,580,425	)		(5,844	)		2,580,425				(5,844	)

Net income (loss) from continuing operations		(11,417,440	)		624,969			10,125,566				(666,905	)
Loss from discontinued operations		-			-			(10,125,566	)	[f]		(10,125,566	)
Net income (loss)	$	(11,417,440	)	$	624,969		$	-			$	(10,792,471	)
Preferred stock interest		-			-			180,000		[g]		180,000
Net income (loss) available to common shareholders	$	(11,417,440	)	$	624,969		$	(180,000	)		$	(10,972,471	)

Net loss per share, basic and diluted	$	(0.17	)	$	NA						$	(0.11	)

Weighted average number of common shares outstanding, basic and diluted		66,060,038		NA						[h]		96,060,038

See accompanying notes to Unaudited Condensed Combined Financial Statements

Notes to the Unaudited Pro Forma Condensed Combined Financial Statements

1. Basis of presentation

The Unaudited Pro Forma Condensed Combined Financial Statements are based on the Company’s and CFN’s historical consolidated financial statements as adjusted to give effect to the assets of CFN acquired pursuant to the Emerging Growth Agreement. The Unaudited Pro Forma Condensed Combined Statements of Operations for the three months ended March 31, 2019 and the year ended December 31, 2018 give effect to the Emerging Growth Agreement as if it had occurred on January 1, 2018. The Unaudited Pro Forma Condensed Combined Balance Sheet as of March 31, 2019 gives effect to the Emerging Growth Agreement as if it had occurred on March 31, 2019.

The historical financial information has been adjusted to give pro forma effect to events that are (i) directly attributable to the Emerging Growth Agreement, (ii) factually supportable, and (iii) with respect to the Unaudited Pro Forma Condensed Combined Statement of Operations, expected to have a continuing impact on the combined results. The pro forma adjustments are preliminary and based on estimates of the fair value and useful lives of the assets acquired and liabilities assumed and have been prepared to illustrate the effect of the Emerging Growth Agreement. Historical amounts of the assets acquired and liabilities assumed have been used to estimate fair value as no valuation has occurred at this time to determine their respective fair values.

Under the acquisition method, acquisition-related transaction costs such as advisory, legal, valuation and other professional fees are not included as consideration transferred but are accounted for as expenses in the periods in which the costs are incurred. These costs are not presented or reflected as pro forma adjustments in the Unaudited Pro Forma Combined Consolidated Statements of Operations because they will not have a continuing impact on the combined results.

2. Preliminary Purchase Price Allocation

On May 15, 2019, the Company entered into the Emerging Growth Agreement with Emerging Growth LLC, pursuant to which the Company will acquire certain assets of CFN, Emerging Growth LLC’s sponsored content and marketing business. The closing of the asset purchase occurred on June 20, 2019. Pursuant to the terms of the Emerging Growth Agreement, the Company acquired certain assets of CFN for a purchase price consideration consisting of $420,000 in cash, 30,000,000 shares of the Company’s common stock valued at $2,700,000, and 3,000 shares of Series B preferred stock valued at $687,000. As a result, the total purchase price amounted to $3,807,000.

A summary of the purchase price allocation at fair value is below. The business combination accounting is not yet complete and the amounts assigned to the net assets acquired are provisional. Therefore, the final purchase price allocation may vary based on final appraisals, valuations and analyses of the fair value of the net assets acquired. Accordingly, the pro forma adjustments are preliminary and have been made solely for illustrative purposes.

Property and equipment	$	2,183
Goodwill		3,804,817
	$	3,807,000

3. Pro forma adjustments

The following pro forma adjustments reflected in the Unaudited Condensed Combined Financial Statements represent estimated values and amounts based on available information. The pro forma adjustments are based on our preliminary estimates and assumptions that are subject to change.

Pro forma adjustments to the Unaudited Pro Forma Condensed Combined Balance Sheet as of March 31, 2019:

[a] Adjustment reflects the impact of the total purchase price of the assets of CFN paid to Emerging Growth LLC of $3,807,000 consisting of $420,000 in cash, 30,000,000 shares of the Company’s common stock with a fair value of $2,700,000 and 3,000 shares of the Company’s Series B Preferred Stock with a fair value of $687,000.

[b] Adjustment reflects the preliminary fair value adjustment of $2,183 to the acquired property and equipment. The property and equipment acquired represents computer equipment with an estimated useful life of five years.

[c] Adjustment reflects the preliminary estimate of goodwill, which represents the excess of the purchase price over the fair value of the identifiable net assets acquired as shown in Note 2.

[d] On May 15, 2019, the Company entered into an asset purchase agreement pursuant to which it agreed to sell substantially all of the assets and liabilities related to its CAKE and Journey by CAKE business (the “CAKE Business”). Accordingly, the balances presented as of March 31, 2019 that related to the CAKE Business have been reclassified as assets or liabilities from discontinued operations in the Unaudited Pro Forma Condensed Combined Balance Sheet.

[e] Adjustment relates to removing the assets and liabilities of CFN which were not acquired as part of the Emerging Growth Agreement.

Pro forma adjustments to the Unaudited Pro Forma Condensed Combined Statements of Operations

[f] Adjustment relates to the reclassification of results of operations related to the CAKE Business as discontinued operations in the Unaudited Pro Forma Condensed Combined Statements of Operations.

[g] Adjustment reflects preferred stock interest resulting from the issuance of the Series B Preferred Stock pursuant to the Emerging Growth Agreement. Total annual interest due to the Series B preferred shareholders amounts to $180,000. The Unaudited Pro Forma Condensed Combined Statements of Operations for the three months ended March 31, 2019 and the year ended December 31, 2018 contain adjustments for preferred stock interest of $45,000 and $180,000, respectively.

[h] Adjustment reflects the impact of the issuance of 30,000,000 shares of the Company’s common stock pursuant to the Emerging Growth Agreement. The calculation of the weighted average number of common shares outstanding reflects the 30,000,000 shares as being outstanding as if the Emerging Growth Agreement had occurred on January 1, 2018.