UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31, 201~~9September 30, 2019

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

For the transition period from ________ to ________

Commission File Number: 000-52635

~~ACCELERIZE~~CFN ENTERPRISES INC.

(Exact name of registrant as specified in its charter)

Delaware	20-3858769
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

~~20411 SW BIRCH STREET,~~2601 OCEAN PARK BOULEVARD, SUITE ~~250~~310

~~NEWPORT BEACH~~SANTA MONICA,

CALIFORNIA ~~92660~~90405

(Address of principal executive offices) (Zip code)

~~(949) 548 2253~~(310) 314-8804

(Registrant’s Telephone Number, including Area Code)

ACCELERIZE INC.
(Former name, former address and former fiscal year, if changed since last report)

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

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 [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes [X] No [ ]

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

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [X]	Smaller reporting company [X]

	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. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No [X]

The number of shares outstanding of the registrant’s Common Stock, $0.001 par value per share, as of ~~May 20,~~November 6, 2019, was ~~66,179,709.~~99,679,709.

When used in this quarterly report, the terms ~~“Accelerize,~~“CFN Enterprises,” “the Company,” “we,” “our,” and “us” refer to ~~Accelerize~~CFN Enterprises Inc., a Delaware corporation.

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

This quarterly report on Form 10-Q contains certain forward-looking statements. Forward-looking statements may include our statements regarding our goals, beliefs, strategies, objectives, plans, including product and service developments, future financial conditions, results or projections or current expectations. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms, or other comparable terminology. For example, when we discuss our ~~pursuit of strategic transactions including acquisitions, dispositions, capital raising and debt restructuring,~~expectations for 2019, our expectations for ~~2019,~~revenue sources, costs of revenue and expenses going forward, and that we ~~intend~~will continue to ~~invest in sales, marketing, product development~~pursue strategic transactions and ~~innovation,~~opportunities, we are using forward-looking statements. These statements are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause actual results to be materially different from those contemplated by the forward-looking statements. These factors include, but are not limited to, our ability to implement our strategic initiatives, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. The business and operations of ~~Accelerize~~CFN Enterprises Inc. are subject to substantial risks, which increase the uncertainty inherent in the forward-looking statements contained in this report. Except as required by law, we undertake no obligation to release publicly the result of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Further information on potential factors that could affect our business is described under “Item 1A. Risk Factors” contained in our annual report on Form 10-K as filed with the Securities and Exchange Commission, or the SEC, on April 16, 2019, and in our quarterly report on Form 10-Q as filed with the SEC on August 16, 2019. Readers are also urged to carefully review and consider the various disclosures we have made in this report and in our annual report on Form 10-K.

CFN ENTERPRISES INC.

(F/K/A ACCELERIZE INC.)

INDEX

	Page

PART I - FINANCIAL INFORMATION:	1

Item 1. Financial Statements (Unaudited)	1

Item 2. Management’s Discussion and Analysis of Financial Position and Results of Operations	2123

Item 4. Controls and Procedures	3231

PART II - OTHER INFORMATION:	3331

~~Item 5. Other Information~~	33

Item 6. Exhibits	3431

SIGNATURES	3532

March 31,
2019

December 31,
2018

Unaudited

ASSETS

Current Assets:

Cash
$ 544,346 $ 27,295
Restricted cash
50,000 50,000
Accounts receivable, net of allowance for bad debt of $281,688 and $245,736, respectively
2,232,745 2,081,551
Prepaid expenses and other assets
165,658 254,760
Total current assets
2,992,749 2,413,606

Property and equipment, net of accumulated depreciation of $787,718 and $783,275, respectively
42,130 52,035
Operating lease right-of-use asset
1,503,669 -
Other assets
109,766 108,211
Total assets
$ 4,648,314 $ 2,573,852

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:

Accounts payable and accrued expenses
$ 4,112,359 $ 3,018,394
Deferred revenues
239,029 443,650
Credit facility, short term
2,902,259 3,399,240
Operating lease liability, short-term 296,461 -
Total current liabilities
7,550,108 6,861,284
Credit facility, net of unamortized deferred financing cost of $1,441,763 and $1,522,740, respectively 6,668,493 5,888,155
Other loan, related party net of unamortized deferred financing cost of $146,420 and $163,314, respectively
403,580 386,686
Other long-term loan, net of unamortized deferred financing cost of $608,991 and $676,598, respectively
2,341,009 2,273,402
Operating lease liability, long-term
1,362,750 -
Other liabilities
531,250 637,500
Total liabilities
18,857,190 16,047,027

Stockholders' Deficit:

Series A Preferred stock; $0.001 par value; 54,000 shares authorized; None issued and outstanding.
- -
Series B Preferred stock; $0.001 par value; 1,946,000 shares authorized; None issued and outstanding.
- -
Common stock; $0.001 par value; 500,000,000 shares authorized; 66,179,709 and 66,179,709 shares issued and outstanding, respectively
66,179 66,179
Additional paid-in capital
29,773,130 29,498,125
Accumulated deficit
(43,973,761
)
(42,960,124
)
Accumulated other comprehensive loss
(74,424
)
(77,355
)

Total stockholders’ deficit
(14,208,876
)
(13,473,175
)

Total liabilities and stockholders’ deficit
$ 4,648,314 $ 2,573,852

	September 30,			December 31,
	2019			2018
	(Unaudited)
Assets

Current assets
Cash	$	975,434		$	27,295
Restricted cash		-			50,000
Accounts receivable, net		231,503			-
Prepaid expenses and other current assets		3,401			-
Current assets of discontinued operations		-			2,336,311
Total current assets		1,210,338			2,413,606

Other assets
Property and equipment		3,369			-
Goodwill		3,225,817			-
Other intangible assets		558,475			-
Noncurrent assets of discontinued operations		-			160,246
Total other assets		3,787,661			160,246
Total assets	$	4,997,999		$	2,573,852

Liabilities and Stockholders' Equity (Deficit)

Current liabilities
Accounts payable and accrued expenses	$	186,572		$	-
Deferred revenues		45,041			-
Current liabilities of discontinued operations		76,028			6,861,284
Total current liabilities		307,641			6,861,284
Long-term note payable		482,698			-
Noncurrent liabilities of discontinued operations		-			9,185,743
Total liabilities		790,339			16,047,027

Commitments and contingencies

Stockholders' equity (deficit)
Series A Preferred stock, $0.001 par value, 500 shares authorized, 500 and 0 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively		1			-
Series B Preferred stock, $0.001 par value, 3,000 shares authorized, 3,000 and 0 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively		3			-
Common stock, $0.001 par value, 500,000,000 shares authorized, 99,679,709 and 66,179,709 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively		99,679			66,179
Additional paid-in capital		34,031,326			29,498,125
Accumulated deficit		(29,836,426	)		(42,960,124	)
Accumulated other comprehensive income		(86,923	)		(77,355	)
Total stockholders' equity (deficit)		4,207,660			(13,473,175	)
Total liabilities and stockholders' equity	$	4,997,999		$	2,573,852

Three-month periods ended
March 31,

2019

2018

Revenues:
$ 4,825,822 $ 5,992,748
Cost of revenue
1,829,373 2,353,860
Gross profit
2,996,449 3,638,888

Operating expenses:

Research and development
779,248 1,122,623
Sales and marketing
856,439 1,170,484
General and administrative
1,649,282 1,999,886
Total operating expenses
3,284,969 4,292,993

Operating loss
(288,520
)
(654,105 )

Other income (expense):

Other income
56 761
Other expense
(725,173
)
(603,115
)
Total other expenses
(725,117
)
(602,354
)

Net loss
$ (1,013,637
)
$ (1,256,459
)

Net loss per share:

Basic
$ (0.02
)
$ (0.02
)
Diluted
$ (0.02
)
$ (0.02
)

Basic weighted average common shares outstanding
66,179,709 65,939,709
Diluted weighted average common shares outstanding
66,179,709 65,939,709

	For the Three Months Ended						For the Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2019			2018			2019			2018


Net revenues	$	568,992		$	-		$	631,712		$	-
Cost of revenue		381,277			-			414,726			-
Gross profit		187,715			-			216,986			-

Operating expenses:
Selling, general and administrative		600,663			313,536			1,495,492			1,016,368
Total operating expenses		600,663			313,536			1,495,492			1,016,368

Loss from operations		(412,948	)		(313,536	)		(1,278,506	)		(1,016,368	)

Other income (expense):
Interest expense		(2,514	)		-			(2,514	)		-
Interest income		19			25			131			61
Total other income (expense)		(2,495	)		25			(2,383	)		61

Net loss before provision for income taxes		(415,443	)		(313,511	)		(1,280,889	)		(1,016,307	)
Provision for income taxes		-			-			-			-
Net loss from continuing operations		(415,443	)		(313,511	)		(1,280,889	)		(1,016,307	)
Gain (loss) from discontinued operations, net of tax		1,113			(1,649,626	)		14,471,162			(3,767,333	)
Net income (loss)	$	(414,330	)	$	(1,963,137	)	$	13,190,273		$	(4,783,640	)
Preferred stock interest		60,000			-			66,575			-
Net income (loss) available to common shareholders	$	(474,330	)	$	(1,963,137	)	$	13,123,698		$	(4,783,640	)

Net loss from continuing operations per share, basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.02	)	$	(0.02	)

Net income (loss) from discontinued operations per share, basic and diluted	$	0.00		$	(0.02	)	$	0.18		$	(0.06	)
Weighted average number of common shares outstanding, basic and diluted		99,679,709			66,177,101			78,696,193			66,019,709

Three-month periods ended
March 31,

2019

2018

Net loss:
$ (1,013,637
)
$ (1,256,459
)

Foreign currency translation loss
2,931 17,630
Total other comprehensive loss
2,931 17,630

Comprehensive loss
$ (1,010,706
)
$ (1,238,829
)

	For the Three Months Ended						For the Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2019			2018			2019			2018


Net income (loss)	$	(414,330	)	$	(1,963,137	)	$	13,190,273		$	(4,783,640	)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		(13,050	)		(7,166	)		(9,568	)		(20,683	)
Total other comprehensive income (loss), net of tax		(13,050	)		(7,166	)		(9,568	)		(20,683	)
Comprehensive income (loss)	$	(427,380	)	$	(1,970,303	)	$	13,180,705		$	(4,804,323	)

Common Stock

Additional
Paid-in
Accumulated
Accumulated
Other
Comprehensive

Total
Stockholders'

Shares

Amount

Capital

Deficit

Income

Deficit

Balance, December 31, 2017
65,939,709 $ 65,938 $ 26,301,747 $ (31,542,684
)
$ (41,540
)
$ (5,216,538
)
Fair value of options and restricted stock awards
- - 38,303 - - 38,303
Fair value of warrants
- - 61,050 - - 61,050
Fair value of warrants issued in connection with promissory notes
- - 1,156,695 - - 1,156,695
Net loss
- - - (1,256,459
)
- (1,256,459
)
Foreign currency translation
- - - - 17,630 17,630
Balance, March 31, 2018
65,939,709 $ 65,938 $ 27,557,795 $ (32,799,143
)
$ (23,910
)
$ (5,199,320
)

	Three Months Ended September 30, 2019
																		Accumulated
													Additional					Other
	Series A Preferred Stock				Series B Preferred Stock				Common Stock				Paid-in		Accumulated			Comprehensive
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Income			Total
Balance, June 30, 2019		500	$	1		3,000	$	3		99,679,709	$	99,679	$	34,013,702	$	(29,362,096	)	$	(73,873	)	$	4,677,416

Fair value of warrants issued with promissory notes		-		-		-		-		-		-		17,624		-			-			17,624
Preferred stock interest		-		-		-		-		-		-		-		(60,000	)		-			(60,000	)
Net loss		-		-		-		-		-		-		-		(414,330	)		-			(414,330	)
Foreign currency translation		-		-		-		-		-		-		-		-			(13,050	)		(13,050	)
Balance, September 30, 2019		500	$	1		3,000	$	3		99,679,709	$	99,679	$	34,031,326	$	(29,836,426	)	$	(86,923	)	$	4,207,660

	Three Months Ended September 30, 2018
																		Accumulated
													Additional					Other
	Series A Preferred Stock				Series B Preferred Stock				Common Stock				Paid-in		Accumulated			Comprehensive
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Income			Total
Balance, June 30, 2018		-	$	-		-	$	-		65,939,709	$	65,938	$	28,543,529	$	(34,363,187	)	$	(55,057	)	$	(5,808,777	)

Fair value of options and restricted stock awards		-		-		-		-		240,000		240		37,137		-			-			37,377
Fair value of warrants		-		-		-		-		-		-		101,836		-			-			101,836
Fair value of warrants issued with promissory notes		-		-		-		-		-		-		689,281		-			-			689,281
Net loss		-		-		-		-		-		-		-		(1,963,137	)		-			(1,963,137	)
Foreign currency translation		-		-		-		-		-		-		-		-			(7,166	)		(7,166	)
Balance, September 30, 2018		-	$	-		-	$	-		66,179,709	$	66,178	$	29,371,783	$	(36,326,324	)	$	(62,223	)	$	(6,950,586	)

	Nine Months Ended September 30, 2018
																		Accumulated
													Additional					Other
	Series A Preferred Stock				Series B Preferred Stock				Common Stock				Paid-in		Accumulated			Comprehensive
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Income			Total
Balance, December 31, 2017		-	$	-		-	$	-		65,939,709	$	65,938	$	26,301,747	$	(31,542,684	)	$	(41,540	)	$	(5,216,539	)

Fair value of options and restricted stock awards		-		-		-		-		240,000		240		113,058		-			-			113,298
Fair value of warrants		-		-		-		-		-		-		229,401		-			-			229,401
Fair value of warrants issued with promissory notes		-		-		-		-		-		-		2,727,577		-			-			2,727,577
Net loss		-		-		-		-		-		-		-		(4,783,640	)		-			(4,783,640	)
Foreign currency translation		-		-		-		-		-		-		-		-			(20,683	)		(20,683	)
Balance, September 30, 2018		-	$	-		-	$	-		66,179,709	$	66,178	$	29,371,783	$	(36,326,324	)	$	(62,223	)	$	(6,950,586	)

Three-month periods ended
March 31,

2019

2018

Cash flows from operating activities:

Net loss
$ (1,013,637
)
$ (1,256,459
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization
10,367 119,059
Amortization of deferred financing cost
314,787 202,898
Provision for bad debt
35,952 (235,441 )
Fair value of options and warrants
125,696 99,352
Changes in operating assets and liabilities:

Accounts receivable
(187,146
)
71,925
Prepaid expenses
89,102 32,894
Accounts payable and accrued expenses
1,049,631 (308,112
)
Deferred revenues
(204,621
)
176,894
Other liabilities
155,542 -
Other assets
(1,533
)
(2,783
)
Net cash provided by (used in) operating activities 374,140 (1,099,773
)

Cash flows from investing activities:

Capitalized software for internal use
- (375,000
)
Capital expenditures
- (13,402
)
Net cash used in investing activities
- (388,402
)

Cash flows from financing activities:

Principal repayment of credit facility and loan
(360,000
)
(662,058
)
Proceeds from credit facility
499,980

3,771,600
Repayments of promissory notes
- (1,000,000 )
Net cash provided by financing activities
139,980

2,109,542

Effect of exchange rate changes on cash
2,931 17,630

Net increase in cash, cash equivalents and restricted cash
517,051 638,997

Cash, cash equivalents and restricted cash, beginning of period
77,295 216,883

Cash, cash equivalents and restricted cash, end of period
$ 594,346 $ 855,880

Supplemental disclosures of cash flow information:

Cash paid for interest
$ 407,074 $ 373,257
Cash paid for income taxes
$ - $ -

Non-cash investing and financing activities:

Fair value of warrants issued in connection with credit facility
$ 44,670 $ 1,156,695
Recorded lease right-of-use asset and related lease liability $ 155,542 $ -
Accrued interest reclassed to credit facility $ 62,379 $ -
Capital expenditure included in payables
$ - $ 6,622
Accrued payables and short-term loan directly paid off by credit facility
$ - $ 623,399
Prepaid expenses reclassed to deferred financing cost
$ - $ 70,000
Warrant repricing adjustment $ 104,638 $ -

Reconciliation of Cash and Cash Equivalents and Restricted Cash:

Cash and cash equivalents at beginning of period
$ 27,295 $ 166,883
Restricted cash at beginning of period
$ 50,000 $ 50,000
Cash and cash equivalents and restricted cash at beginning of period
$ 77,295 $ 216,883
Cash and cash equivalents at end of period
$ 544,346 $ 805,880
Restricted cash at end of period
$ 50,000 $ 50,000
Cash and cash equivalents and restricted cash at end of period
$ 594,346 $ 855,880

	For the Nine Months Ended
	September 30,			September 30,
	2019			2018

Cash flows from operating activities
Net income (loss)	$	13,190,273		$	(4,783,640	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		52,132			461,893
Gain on sale of CAKE Business		(19,473,080	)		-
Amortization of deferred financing cost		2,512,282			636,125
Provision for bad debt		54,264			(202,221	)
Fair value of options and warrants		197,773			342,698
Loss on sale of fixed assets		-			997
Issuance of common stock as payment of interest		315,000			-

Changes in operating assets and liabilities:
Accounts receivable		(183,558	)		764,381
Prepaid expenses and other current assets		199,965			147,888
Other assets		68,482			13,346
Accounts payable and accrued expenses		(2,224,935	)		(415,072	)
Deferred revenue		(260,497	)		264,065
Other liabilities		(602,083	)		-

Net cash used in operating activities		(6,153,982	)		(2,769,540	)

Cash flows from investing activities
Capitalized software for internal use		-			(1,125,000	)
Purchase of property and equipment		(1,751	)		(31,579	)
Proceeds from sale of fixed assets		-			750
Proceeds from sale of CAKE Business		20,892,667			-
Payments for acquisition of subsidiary		(420,000	)		-
Net cash provided by (used in) investing activities		20,470,916			(1,155,829	)

Cash flows from financing activities
Principal repayments of credit facility and loan		(11,772,514	)		(2,402,652	)
Proceeds from credit facility		900,000			5,489,850
Payment of preferred stock interest		(35,000	)		-
Proceeds from promissory notes		500,000			3,500,000
Repayment of related party notes		(300,000	)		-
Repayment of promissory notes		(2,700,000	)		(1,000,000	)

Net cash (used in) provided by financing activities		(13,407,514	)		5,587,198

Effect of exchange rate fluctuations on cash		(11,281	)		(20,683	)

Net change in cash and restricted cash		898,139			1,641,146
Cash and restricted cash, beginning of the period		77,295			216,883
Cash and restricted cash, end of the period	$	975,434		$	1,858,029

Supplemental disclosure of cash flow information:
Interest paid	$	946,691		$	1,133,678
Income taxes paid	$	-		$	-

Supplemental disclosure of non-cash investing and financing information:
Fair value of warrants issued in connection with line of credit and promissory notes	$	62,294		$	2,727,577
Capital expenditure included in accounts payable	$	-		$	1,739
Accrued payables and short-term note directly paid off by credit facility	$	-		$	680,149
Prepaid expenses reclassified to deferred financing costs	$	-		$	70,000
Deferred financing costs incurred in connection with promissory notes	$	-		$	75,000
Accrual of preferred stock interest	$	31,575		$	-
Accrued interest reclassed to credit facility	$	62,379		$	-
Warrant repricing adjustment	$	104,638		$	-
Conversion of notes payable to Series A Preferred Stock	$	500,000		$	-
Issuance of Series B Preferred Stock for acquisition of subsidiary	$	687,000		$	-
Issuance of common stock for acquisition of subsidiary	$	2,700,000		$	-

NOTE 1: ORGANIZATION ~~DESCRIPTION OF BUSINESS,~~ AND BASIS OF PRESENTATION

Organization

CFN Enterprises Inc., formerly known as Accelerize Inc., or the Company, is a Delaware corporation incorporated on November 22, 2005 ~~owns~~which owned and ~~operates~~operated CAKE, a Software-as-a-Service ~~or SaaS,~~ platform providing online tracking and analytics solutions for advertisers and online marketers.

The Company ~~provides~~provided software solutions for businesses interested in expanding their online advertising spend. Effective October 22, 2019, the Company filed a certificate of amendment to its certificate of incorporation with the Secretary of State of the State of Delaware to change its corporate name to CFN Enterprises Inc.

On May 15, 2019, the Company entered into an asset purchase agreement, or the Asset Purchase Agreement, with CAKE Software, Inc., a Delaware corporation and a subsidiary of Constellation Software Inc., an Ontario, Canada corporation (TSX: CSU), or Constellation, pursuant to which the Company agreed to sell substantially all of the assets associated with its CAKE and Journey by CAKE business, or the CAKE Business, to Constellation for a base purchase price of $19,400,000 plus or minus an estimated closing date adjustment based on the net tangible assets of the CAKE Business at the closing, a holdback of $500,000 adjusted pursuant to the terms of the Asset Purchase Agreement and payable on the first anniversary of the closing date, and a three year earnout equal to 30% of the amount that the annual net revenue of the CAKE Business exceeds $13,750,000 and payable within 120 days on each of the first, second and third end of month anniversaries of the closing date. The sale of the assets of the CAKE Business pursuant to the Asset Purchase Agreement closed on June 18, 2019, and the Company received proceeds of $20,892,667, net of the estimated closing date adjustment.

As of the closing date, Constellation acquired all of the assets used by the Company in the CAKE Business and assumed the Company’s post-closing obligations under certain vendor, customer and other commercial contracts related to the CAKE Business, including the Company’s lease for its headquarters in Newport Beach, California. The Company’s cash and cash equivalents, and the assets associated with its Accelerize trademark, are excluded from the sale of the CAKE Business. Constellation offered employment to certain of the Company’s employees following the closing date.

On May 15, 2019, the Company entered into the Emerging Growth Agreement with Emerging Growth, LLC, or the Seller, pursuant to which the Company acquired certain assets from the Seller related to its sponsored content and marketing business for a purchase price consideration consisting of $420,000 in cash, 30,000,000 shares of the Company’s common stock, and 3,000 shares of Series B preferred stock with a total stated value of $3,000,000 which bears interest at 6% per annum and is convertible into the Company’s common stock at a conversion price to be mutually agreed in the future, without voting rights or a liquidation preference except with respect to default interest. The securities were issued pursuant to an exemption under Section 4(a)(2) of the Securities Act of 1933, as amended. The closing of the purchase of the assets pursuant to the Emerging Growth Agreement occurred on June 20, 2019.

Subsequent to the closing of the Asset Purchase Agreement on June 18, 2018, the Company’s continuing operations consist of the sponsored content and marketing business from the assets acquired pursuant to the Emerging Growth Agreement.

Going Concern

The accompanying consolidated financial statements have been prepared on a going concern basis which implies the Company will continue to meet its obligations for the next 12 months as of the date these financial statements are issued.

The Company had working capital of $902,697 and an accumulated deficit of $29,836,426 as of September 30, 2019. The Company also had a net loss from continuing operations of $1,280,889 during the nine months ended September 30, 2019.

As discussed above, on May 15, 2019, the Company entered into the Asset Purchase Agreement with Constellation under which all the net assets associated with the CAKE Business were sold. The proceeds from the Asset Purchase Agreement were used to pay off the Company’s existing debt, as well as to acquire certain assets in the Emerging Growth Agreement from the Seller related to its sponsored content and marketing business. Management’s plan to continue as a going concern includes raising capital in the form of debt or equity, growing the business acquired under the Emerging Growth Agreement and managing and reducing operating and overhead costs. The Company cannot provide any assurance that unforeseen circumstances that could occur at any time within the next twelve months or thereafter will not increase the need for the Company to raise additional capital on an immediate basis.

These matters, among others, raise substantial doubt about the ability of the Company to continue as a going concern. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the results of operations of the Company and Cake Marketing UK Ltd., or the Subsidiary. The Company discontinued its operations associated with its CAKE Business and the operations of its Subsidiary in May 2019. These accounts have been presented as discontinued operations in the accompanying unaudited condensed consolidated financial statements. Continuing operations presented in periods prior reflect administrative expenses associated with business insurance, legal and accounting fees that the Company will continue to incur. All material intercompany accounts and transactions between the Company and its Subsidiary have been eliminated in consolidation.

These unaudited condensed consolidated financial statements reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations, and cash flows for the periods presented in accordance with accounting principles generally accepted in the United States of America, or GAAP. These unaudited condensed consolidated financial statements and notes included herein should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the years ended December 31, 2018 and 2017, respectively, which are included in the Company’s December 31, 2018 Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on April 16, 2019. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited consolidated financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation of these may be determined in that context. The results of operations for the ~~three-month~~ period ended ~~March 31,~~September 30, 2019 are not necessarily indicative of results for the entire year ending December 31, 2019.

~~Going Concern~~

The Company had a working capital deficit of $4,557,359 and an accumulated deficit of $43,973,761 as of March 31, 2019. The Company also had a net loss of $1,013,637 and cash provided by operating activities of $374,140 during the three months ended March 31, 2019.

Management’s plan to continue as a going concern includes raising capital in the form of debt or equity, increased gross profit from revenue growth and managing and reducing operating and overhead costs. During the second quarter of 2018, the Company engaged a nationally recognized investment bank to assist management in pursuing strategic transactions including acquisitions, dispositions, capital raising and debt restructuring. On May 15, 2019, the Company entered into an asset purchase agreement to sell substantially all of the Company’s assets. This agreement is subject to stockholder approval (see Note 10, Subsequent Events). However, management cannot provide any assurances that the Company will be successful in accomplishing its plans. Management also cannot provide any assurance that unforeseen circumstances that could occur at any time within the next twelve months or thereafter will not increase the need for the Company to raise additional capital on an immediate basis.

~~Principles of Consolidation~~

The accompanying unaudited condensed consolidated financial statements include the results of operations of Cake Marketing UK Ltd., or the Subsidiary. All material intercompany accounts and transactions between the Company and its Subsidiary have been eliminated in consolidation.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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 reporting amounts of revenues and expenses during the reported period. Actual results will differ from those estimates. Included in these estimates are assumptions about collection of accounts receivable, useful life of fixed assets and intangible assets, borrowing rate considered for operating lease right-of-use asset and related operating lease liability, and assumptions used in ~~Black-Scholes-Merton, or BSM,~~Black-Scholes valuation methods, such as expected volatility, risk-free interest rate, and expected dividend rate.

Financial Statement Reclassification

Certain account balances from prior periods have been reclassified in these unaudited condensed consolidated financial statements to conform to current period classifications. The prior year amounts have also been reclassified in these financial statements to properly report amounts under current operations and discontinued operations (see note 7).

Cash and Cash Equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less when purchased, to be cash equivalents. The Company ~~has~~had restricted cash as a result of its corporate card program through its ~~bank. The~~ bank, ~~requires a~~which required collateral ~~which is~~ placed in a money market ~~account and can be increased or decreased at any time at~~account. The corporate card program was terminated during the ~~discretion of~~three months ended September 30, 2019, which resulted in the ~~Company.~~restricted cash balance being transferred back to the Company for its general use. The Company’s restricted cash amounted to $0 at September 30, 2019 and $50,000 at ~~March~~December 31, ~~2019~~2018. The restricted cash balance of $50,000 is included as a component of total cash and ~~December 31,~~restricted cash as presented on the accompanying unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2018.

Accounts Receivable

The Company’s ~~accounts receivable~~account receivables are due ~~primarily~~ from ~~advertisers and marketers.~~customers relating to contracts to provide investor relation services. Collateral is currently not required. The Company also maintains allowances for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make payments. The Company periodically reviews these estimated allowances, including an analysis of the customers’ payment history and creditworthiness, the age of the trade receivable balances and current economic conditions that may affect a customer’s ability to make payments as well as historical collection trends for its customers as a whole. Based on this review, the Company specifically reserves for those accounts deemed uncollectible or likely to become uncollectible. When receivables are determined to be uncollectible, principal amounts of such receivables outstanding are deducted from the allowance. There was no allowance for doubtful accounts as of September 30, 2019 or December 31, 2018.

March 31,
2019

December 31,
2018

Allowance for doubtful accounts
$ 281,688 $ 245,736

Concentration of Credit Risks

The Company is subject to concentrations of credit risk primarily from cash and cash equivalents and accounts receivable.

The Company’s cash and cash equivalents accounts are held at a financial institution and are insured by the Federal Deposit Insurance Corporation, or the FDIC, up to $250,000. ~~During~~From time-to-time, the ~~three-month period ended March 31, 2019, the Company has reached~~Company’s bank balances ~~exceeding~~exceed the FDIC insurance limit. To reduce its risk associated with the failure of such financial institutions, the Company periodically evaluates the credit quality of the financial institution in which it holds deposits. The Company had cash balances of approximately $665,000 at September 30, 2019 that exceeded the FDIC insurance limit.

The Company's accounts receivable are due from customers ~~generally~~ located in the United States ~~Europe, Asia,~~ and Canada. The Company had ~~a customer~~three customers who each accounted for ~~17%~~13.0%, 11.7% and 11.0% of its accounts receivable at ~~March 31,~~September 30, 2019 and none at December 31, 2018. ~~The Company does not require any collateral from its customers.~~

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification, or ASC, 606, the core principle of which 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 accounts for revenues when both parties to the contract have approved the contract, the rights and obligations of the parties are identified, payment terms are identified, and collectability of consideration is probable. Payment terms vary by client and the services offered.

~~The~~Prior to the Company discontinuing the operations of its CAKE Business in May 2019, the Company’s SaaS revenues ~~are~~were generated from implementation and training fees and a monthly license fee, supplemented by per transaction fees paid by customers for monthly platform usage. The initial term of the customer contract iswere generally one year with one of two general cancellation policies. Each party ~~may~~could cancel the contract within the initial period or after the initial period, with 30-days’ prior notice. The Company ~~does~~did not provide any general right of return for its delivered items. Services associated with the implementation and training fees ~~have~~had standalone value to the Company’s customers, as there are third-party vendors who offer similar services to the Company’s services. Accordingly, they ~~qualify~~qualified as separate units of accounting. The Company ~~allocates~~allocated a fair value to each element deliverable at the recognition date and ~~recognizes~~recognized such value when the services are provided. The Company bases the fair value of the implementation and training fees on third-party evidence and the monthly license fee on vendor-specific objective evidence. Fees charged by third-party vendors for implementation and training services do not vary significantly from the fees charged by the Company. Services associated with implementation and training fees ~~are~~were generally rendered within a month from the initial contract date. The value attributed to the monthly license fees as well as the fees associated with monthly transaction-based platform usage ~~are~~were recognized in the corresponding period.

~~Product Concentration~~

Subsequent to the closing of the Emerging Growth Agreement on June 20, 2019, the Company’s revenue is generated from the sale of promotional service packages to its customers ranging from 3 to 6 months. The Company ~~generates~~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 advertising, publishing of interviews and articles across its ~~revenues from software licensing, usage,~~network and ~~related transaction fees.~~featuring of client content on its newsletters and social media. The packages all have fixed prices that are billed monthly over the terms of the agreement in even amounts. 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. To the extent revenue recognized on contracts at each period end exceeds collections, the amounts are reflected as accounts receivable. To the extent collections on contracts at each period end exceeds revenue recognized, the amounts are reflected as deferred revenue.

Fair Value of Financial Instruments

The Company accounts for assets and liabilities measured at fair value on a recurring basis in accordance with ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level 1:

Observable inputs such as quoted market prices in active markets for identical assets or liabilities.

Level 2:

Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3:

Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

Additional Disclosures Regarding Fair Value Measurements

The carrying value of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and lines of credit approximate their fair value due to the short-term maturity of these items.

Advertising

The Company expenses advertising costs as incurred. Advertising expenses relating to continuing operations amounted to $148,738 and $160,029 for the three and nine months ended September 30, 2019, respectively. There were no advertising expenses during 2018 relating to continuing operations. Advertising expenses reported as a component of discontinued operations amounted to $0 and $140,907 for the three months ended September 30, 2019 and 2018, respectively, and $159,665 and $415,358 for the nine months ended September 30, 2019 and 2018, respectively.

Three-month periods ended
March 31,

2019

2018

Advertising expense
$ 98,967 $ 133,548

Income Taxes

Income taxes are accounted for in accordance with the provisions of ASC Topic 740, Accounting for Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the 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 income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized, but no less than quarterly.

Foreign Currency Translation

The Company’s reporting currency is U.S. Dollars. The functional currency of the Company’s Subsidiary in the United Kingdom iswas British Pounds. The translation from British Pounds to U.S. dollars is performed for asset and liability accounts using exchange rates in effect at the balance sheet date, equity accounts using historical exchange rates or rates in effect at the balance sheet date, and for revenue and expense accounts using the average exchange rate in effect during the period. The resulting translation adjustments are recorded as a component of Accumulated Other Comprehensive Income (Loss). Foreign currency translation gains and losses arising from exchange rate fluctuation on transactions denominated in a currency other than the functional currency are included in the consolidated statements of operations.

Software Development Costs

At December 31, 2018, the Company impaired the entire balance of unamortized internal-use software development costs which amounted to approximately $4,725,000 and did not capitalize internal-use software development costs in 2019. Costs incurred in the research and development of software products and significant upgrades and enhancements thereto during the preliminary project stage and the post-implementation operation stage are expensed as incurred. Costs incurred for maintenance and relatively minor upgrades and enhancements are expensed as incurred. Prior to the December 31, 2018 impairment, costs associated with the application development stage of new software products and significant upgrades and enhancements thereto were capitalized when 1) management implicitly or explicitly authorized and committed to funding a software project and 2) it was probable that the project would be completed and the software would be used to perform the function intended. The Company capitalized internal-use software development costs of $375,000 and $1,125,000 during the ~~three-month period~~three and nine-month periods ended ~~March 31,~~September 30, 2018. The Company amortized such costs once the new software products and significant upgrades and enhancements were completed. The ~~unamortized internal-use software development costs amounted to approximately $4,196,000 at March 31, 2018. The~~ Company’s amortization expenses associated with capitalized software development costs amounted to ~~approximately~~ $105,000 and $426,146 during the ~~three-month period~~three and nine-month periods ended ~~March 31,~~September 30, 2018 and was reflected in cost of revenues. There were no expenses associated with capitalized software development costs during the ~~three-month~~three and nine-month periods ended September 30, 2019. The amortization expenses above are reported as a component of discontinued operations.

Property and Equipment

Property and equipment are recorded at cost and are depreciated on a straight-line basis over their estimated useful lives of five years. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized.

Goodwill

The Company’s goodwill represents the excess of purchase price over tangible and intangible assets acquired, less liabilities assumed arising from business acquisitions. Goodwill is not amortized, but is reviewed for potential impairment on an annual basis at the reporting unit level. There was no impairment recorded during the three and nine months ended September 30, 2019 or 2018.

Long-Lived Assets

In accordance with ASC 360-10, the Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. There was no impairment of long-lived assets identified during the three and nine months ended ~~March 31, 2019.~~September 30, 2019 or 2018.

Basic and Diluted Earnings Per Share

Basic earnings per share are calculated by dividing income available to stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share are computed using the weighted average number of common and dilutive common share equivalents outstanding during the period. Dilutive common share equivalents consist of shares issuable upon the exercise of stock options and warrants (calculated using the modified-treasury stock method). As of September 30, 2019, the Company had 6,595,000 outstanding stock options and 8,127,184 outstanding warrants which were excluded from the calculation of diluted earnings per share because their effects were anti-dilutive. As of September 30, 2018, the Company had 7,237,500 outstanding stock options and 25,045,517 outstanding warrants which were excluded from the calculation of diluted earnings per share because their effects were anti-dilutive. As a result, the basic and diluted earnings per share are the same for each of the periods presented.

Share-Based Payment

The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation-Stock Compensation, or ASC 718. Under the fair value recognition provisions of this topic, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, which is the vesting period.

The Company has elected to use the ~~BSM~~Black-Scholes option-pricing model to estimate the fair value of its options, which incorporates various subjective assumptions including volatility, risk-free interest rate, expected life, and dividend yield to calculate the fair value of stock option awards. Compensation expense recognized in the statements of operations is based on awards ultimately expected to vest and reflects estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

~~In June 2018, the FASB issued ASU 2018-07,~~ ~~Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,~~ ~~to expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees and supersedes the guidance in Subtopic 505-50,~~ ~~Equity - Equity-Based Payments to Non-Employees~~. Under ASU 2018-07, equity-classified nonemployee share-based payment awards are measured at the grant date fair value on the grant date. The probability of satisfying performance conditions must be considered for equity-classified nonemployee share-based payment awards with such conditions. This update to this standard has no impact in the Company’s Condensed Consolidated Financial Statements.

Common stock awards

The Company has granted common stock awards to non-employees in exchange for services provided. The Company measures the fair value of these awards using the fair value of the services provided or the fair value of the awards ~~granted, whichever is more reliably measurable. The fair value measurement date of these awards is generally the date the performance of services is complete.~~granted. The fair value of the awards is recognized on a straight-line basis as services are rendered. The share-based payments related to common stock awards for the settlement of services provided by non-employees is recorded on the consolidated statement of comprehensive loss in the same manner and charged to the same account as if such settlements had been made in cash.

Warrants

In connection with certain financing, consulting and collaboration arrangements, the Company has issued warrants to purchase shares of its common stock. The outstanding warrants are standalone instruments that are not puttable or mandatorily redeemable by the holder and are classified as equity awards. The Company measures the fair value of the awards using the Black-Scholes option pricing model as of the measurement date. Warrants ~~issued in conjunction with the issuance of common stock are initially recorded at fair value as a reduction in additional paid-in capital of the common stock issued. All other warrants~~ are recorded at fair value as expense over the requisite service period or at the date of issuance, if there is not a service period. Warrants granted in connection with ongoing arrangements are more fully described in Note 6, Stockholders’ Deficit.

~~Segment Reporting~~

The Company generated revenues from one source, its SaaS business, during the three-month periods ended March 31, 2019 and 2018. The Company's chief operating decision maker evaluates the performance of the Company based upon revenues and expenses by functional areas as disclosed in the Company's statements of operations.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, “Leases” (Topic 842). This guidance will be effective for public entities for fiscal years beginning after December 15, 2018 including the interim periods within those fiscal years. Early application is permitted. Under the new provisions, all lessees will report a right-of-use asset and a liability for the obligation to make payments for all leases with the exception of those leases with a term of 12 months or less. All other leases will fall into one of two categories: (i) Financing leases, similar to capital leases, which will require the recognition of an asset and liability, measured at the present value of the lease payments and (ii) Operating leases which will require the recognition of an asset and liability measured at the present value of the lease payments. The Company has adopted this standard on January 1, 2019 and ~~has~~ recognized ~~assts~~assets and liabilities arising from any leases that meet the requirements under this standard on the adoption date and included qualitative and quantitative disclosures in the Company’s ~~Notes~~notes to the ~~Condensed Consolidated Financial Statements.~~condensed consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350), which simplifies the goodwill impairment test. The effective date for ASU 2017-04 is for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. This Company is currently assessing the impact of the standard ~~has no impact~~ on ~~the Company’s~~its financial statements.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments — Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. The guidance affects the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements of financial instruments. The guidance is effective in the first quarter of fiscal 2019. Early adoption is permitted for the accounting guidance on financial liabilities under the fair value option. This standard has no impact on the Company’s financial statements.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The objective of this ~~ASU~~standard is to eliminate the diversity in practice related to the classification of restricted cash or restricted cash equivalents in the statement of cash flows. For public business entities, this ~~ASU~~standard is effective for annual and interim reporting periods beginning after December 15, 2017. The Company has adopted this standard on January 1, 2018, and it has had no material impact on its financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting (ASU 2016-09), which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This pronouncement is effective for annual reporting periods beginning after December 15, 2017. The Company has adopted this standard on January 1, 2018 and it has had no material impact on its financial statements.

In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, to expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees and supersedes the guidance in Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. Under ASU 2018-07, equity-classified nonemployee share-based payment awards are measured at the grant date fair value on the grant date. The probability of satisfying performance conditions must be considered for equity-classified nonemployee share-based payment awards with such conditions. This ~~update to~~Company has adopted this standard on January 1, 2019 and it has had no impact in the Company’s ~~Condensed Consolidated Financial Statements.~~condensed consolidated financial statements.

Other accounting pronouncements have been issued but deemed by management to be outside the scope of relevance to the Company.

~~Basic and Diluted Earnings Per Share~~

NOTE 3: PROPERTY AND EQUIPMENT

~~Basic earnings per share are calculated by dividing income available~~The Company’s property and equipment relating to ~~stockholders by~~continuing operations consisted of the ~~weighted-average number of common shares outstanding during each period. Diluted earnings per share are computed using the weighted average number of common~~following at September 30, 2019 and dilutive common share equivalents outstanding during the period. Dilutive common share equivalents consist of shares issuable upon the exercise of stock options and warrants (calculated using the modified-treasury stock method). December 31, 2018.

Three-month periods ended
March 31,

2019

2018

Numerator:

Net loss
$ (1,013,637
)
$ (1,256,459
)

Denominator:

Denominator for basic earnings per share-weighted average shares
66,179,709 65,939,709
Effect of dilutive securities-when applicable:

Stock options
- -
Warrants
- -
Denominator for diluted earnings per share-adjusted weighted-average shares and assumed conversions
66,179,709 65,939,709

Loss per share:

Basic
$ (0.02
)
$ (0.02
)
Diluted
$ (0.02
)
$ (0.02
)

Weighted-average anti-dilutive common share equivalents
32,044,290 23,063,359

	September 30,			December 31,
	2019			2018
	(Unaudited)

Computer equipment and software	$	8,139		$	-

		8,139			-

Less: accumulated depreciation		(4,770	)		-

	$	3,369		$	-

Depreciation expense from continuing operations for the three and nine months ended September 30, 2019 amounted to $368 and $565, respectively. There was no depreciation expense from continuing operations during 2018.

NOTE 4: ACQUISITONS

On May 15, 2019, the Company entered into the Emerging Growth Agreement with Emerging Growth, LLC (see Note 1), which closed on June 20, 2019. Pursuant to the terms of the Emerging Growth Agreement, the Company acquired certain assets from the Seller related to its sponsored content and marketing business 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, this may result in future adjustments to the provisional amounts as new information is obtained about facts and circumstances that existed at the acquisition date.

	Purchase Allocation
Property and equipment	$	2,183
Other intangible assets		579,000
Goodwill		3,225,817
	$	3,807,000

~~Property~~Intangible assets acquired represent amounts allocated to customers contracts of $7,000 and ~~Equipment~~marketing-related intangible assets of $572,000, for an aggregate total of $579,000. The intangible assets related to customer contracts are being amortized over a period of approximately 5 months and the marketing-related intangible assets are being amortized over 10 years. Amortization expense for intangible assets for both the three and nine months ended September 30, 2019 amounted to $20,525. Estimated future amortization of intangible assets as of September 30, 2019 is as follows.

	Year Ended
	December 31,
2019 (remainder of)	$	16,751
2020		57,200
2021		57,200
2022		57,200
2023		57,200
Thereafter		312,924
Total	$	558,475

The following are the unaudited pro forma results of operations for the three and nine months ended September 30, 2019 and 2018, as if the assets purchased in the Emerging Growth Agreement had been acquired on January 1, 2018. The pro forma results include estimates and assumptions which management believes are reasonable. However, pro forma results do include any anticipated cost savings or other effects of the planned integration of these entities, and are not necessarily indicative of the results that would have occurred if the business combination had been in effect on the dates indicated.

	Pro Forma Combined Financials (Unaudited)
	Nine Months Ended September 30, 2019			Nine Months Ended September 30, 2018

Revenue from continuing operations	$	1,687,555		$	1,552,730

Net loss from continuing operations	$	(1,160,045	)	$	(575,749	)

Net loss from continuing operations per common share - basic and diluted	$	(0.01	)	$	(0.01	)

	Pro Forma Combined Financials (Unaudited)
	Thee Months Ended September 30, 2019			Thee Months Ended September 30, 2018

Revenue from continuing operations	$	568,992		$	545,582

Net loss from continuing operations	$	(415,443	)	$	(247,501	)

Net loss from continuing operations per common share - basic and diluted	$	(0.00	)	$	(0.00	)

NOTE 5: NOTE PAYABLE

On September 10, 2019, the Company entered into a promissory note payable whereby the Company borrowed $500,000 bearing interest at 8% per annum. Interest on the note is payable quarterly on the first business day of December, March, June and September commencing December 1, 2019. Outstanding principal on the note is due in full on September 30, 2022.

Future scheduled maturities of long-term debt are as follows.

	Year Ended
	December 31,

2019 (remainder of)	$	-
2020		-
2021		-
2022		500,000
Total	$	500,000

In connection with the promissory note payable on September 10, 2019, the Company issued warrants to purchase 500,000 shares of the Company’s common stock at an exercise price of $0.10 per share. The warrants expire on September 10, 2024 and are fully vested upon issuance. The note was discounted by $17,624 allocated from the valuation of the warrants issued. The discount recorded on the note is being amortized as interest expense through the maturity date, which amounted to $322 for the three and nine months ended September 30, 2019. As of September 30, 2019, the net book value of the promissory note amounted to $482,698 including the principal amount outstanding of $500,000 net of the remaining discount of $17,302.

The warrants issued with the promissory note were valued using the Black-Scholes pricing method using the following assumptions below.

Expected life in years			5
Stock price volatility			114.20%
Risk free interest rate			1.58%
Expected dividends			None
Estimated forfeiture rate			None

NOTE 6: STOCKHOLDERS’ DEFICIT

Common Stock

~~Property~~On June 20, 2019, the Company issued an aggregate of 3,500,000 restricted shares of common stock to certain promissory note holders as consideration for early payment of the promissory notes. The value of the shares issued amounted to $315,000 and ~~equipment are~~was recorded ~~at cost and are depreciated on a straight-line basis over their estimated useful lives of three years. Maintenance and repairs are charged to~~as interest expense ~~as incurred. Significant renewals and betterments are capitalized.~~during the nine months ended September 30, 2019.

~~Property and equipment consist~~On June 20, 2019, the Company issued 30,000,000 restricted shares of common stock to Emerging Growth, LLC as part of the ~~following at:~~acquisition under the Emerging Growth Agreement (see Note 4). The value of the stock amounted to $2,700,000 and was recorded as part of the acquisition price of the net assets acquired under the Emerging Growth Agreement.

Restricted Stock Issued as Compensation

During 2018, the Company issued an aggregate total of 240,000 restricted shares of its common stock to its non-employee directors as partial director compensation, at a value of $0.50 per share, vesting in 4 equal quarterly increments commencing on July 1, 2018 and ending June 30, 2019. The Company recorded expenses of $0 and $30,000 during the three months ended September 30, 2019 and 2018, respectively, and $60,000 and $90,000 during the nine months ended September 30, 2019 and 2018, respectively. There was no remaining unrecorded compensation expense related to restricted stock as of September 30, 2019.

March 31,
2019

December 31,
2018

Computer equipment and software
$ 415,968 $ 422,441
Office furniture and equipment
123,530 123,932
Leasehold improvements
290,350 288,937
829,848 835,310
Accumulated depreciation
(787,718
)
(783,275
)
Total
$ 42,130 $ 52,035

Three-month periods ended
March 31,

2019

2018

Depreciation expense
$ 10,368 $ 14,059
Amortization expense on internal software
$ - $ 105,000

Preferred Stock

The Company is authorized to issue 2,000,000 shares of preferred stock with a par value of $0.001 per share, of which 500 have been authorized as Series A Preferred Stock and 3,000 have been authorized as Series B Preferred Stock.

On June 20, 2019, the Company issued to certain of its promissory noteholders an aggregate of 500 shares of Series A Preferred Stock, each with a stated value per share of $1,000, as conversion of $500,000 worth of outstanding promissory notes. The Series A Preferred Stock bears interest at 12% per annum, and is convertible into the Company’s common stock at the election of the holder at a conversion price per share to be mutually agreed between the Company and the holder in the future, and be redeemable at the Company’s option following the third year after issuance, without voting rights or a liquidation preference.

On June 20, 2019, the Company issued 3,000 shares of Series B Preferred Stock to Emerging Growth, LLC, each with a stated value of $1,000 per share, as part of the Emerging Growth Agreement. The aggregate fair value of $687,000 was recorded as part of the acquisition price of the net assets acquired from Emerging Growth, LLC (see Note 4). The Series B Preferred Stock bears interest at 6% per annum and is convertible into the Company’s common stock at the election of Emerging Growth, LLC at a conversion price per share to be mutually agreed between the Company and Emerging Growth, LLC in the future, without voting rights or a liquidation preference, except with respect to accrued penalty interest.

For the three and nine months ended September 30, 2019, the Company incurred $60,000 and $66,575, respectively, of interest from the outstanding preferred stock.

Warrants

The following summarizes the Company’s warrant activity for the nine months ended September 30, 2019.

						Weighted-
						Average
				Weighted-		Remaining
				Average		Contractual
				Exercise		Life
	Warrants			Price		(Years)

Outstanding at December 31, 2018		25,045,517		$	0.53		4.16
Granted		1,000,000			0.13
Forfeited/cancelled		(17,918,333	)		0.50
Outstanding at September 30, 2019 (unaudited)		8,127,184		$	0.56		3.38

Vested and expected to vest at September 30, 2019 (unaudited)		8,127,184		$	0.56		3.38

Exercisable at September 30, 2019 (unaudited)		8,127,184		$	0.56		3.38

During the three months ended March 31, 2019, the Company issued 500,000 warrants exercisable at a price of $0.15 per share which expire on January 25, 2024. The fair value of these warrants amounted to $44,670, and was recognized as deferred financing costs using the effective interest method during the three-month period ended March 31, 2019. Additionally, per the down round feature of 7,935,000 warrants issued in connection with the Beedie Credit Agreement (see Note 7), pursuant to ASU 2017-11 which allows instruments with a down round feature to qualify for equity classification, the Company recognized the value of the feature when it was activated and there was an actual reduction of the strike price or conversion feature. The reduction in income of such 7,935,000 warrants amounted to $104,638 and was capitalized as deferred financing costs during the three-month period ended March 31, 2019. In connection with the closing of the Asset Purchase Agreement for the sale of the CAKE Business on June 18, 2019, the above warrants were cancelled.

On September 10, 2019, the Company ~~disposed of approximately $9,000~~issued 500,000 warrants in ~~computer equipment~~connection with a ~~net book~~promissory note payable (see Note 5).

During the three and nine-month periods ended September 30, 2018, the Company issued 3,835,000 and 12,135,000 warrants related to its loans, at a fair value of ~~approximately $1,400. There~~$689,281 and $2,727,577, respectively, and were ~~no such disposals in 2018.~~

~~Leases~~recognized as deferred financing costs and amortized using the effective interest method over the term of the associated loan.

The Company ~~has identified~~recorded expenses of $0 and $101,836 during the three months ended September 30, 2019 and 2018, respectively, related to warrants granted for compensation. The Company recorded expenses of $126,810 and $229,400 during the nine months ended September 30, 2019 and 2018, respectively, related to warrants granted for compensation. As of September 30, 2019, all ~~leases~~outstanding warrants were fully vested and ~~reviewed~~there was no remaining unrecorded compensation expense.

Options

The following summarizes the ~~leases~~Company’s stock option activity for the nine months ended September 30, 2019.

						Weighted-
						Average
				Weighted-		Remaining
				Average		Contractual
				Exercise		Life
	Options			Price		(Years)

Outstanding at December 31, 2018		7,232,500		$	0.40		3.45
Forfeited/cancelled		(637,500	)		1.00
Outstanding at September 30, 2019 (unaudited)		6,595,000		$	3.40		2.60

Vested and expected to vest at September 30, 2019 (unaudited)		6,595,000		$	0.34		2.60

Exercisable at September 30, 2019 (unaudited)		6,595,000		$	0.34		2.60

The Company recorded expenses of $0 and $7,376 during the three months ended September 30, 2019 and 2018, respectively, related to ~~determine~~stock options. The Company recorded expenses of $10,963 and $23,298 during the ~~impact~~nine months ended September 30, 2019 and 2018, respectively, related to stock options. Employees with unvested stock options all left the Company in connection with the closing of the Asset Purchase Agreement for the sale of the CAKE Business on June 18, 2019. As a result, no further options are expected to vest, and the total compensation cost related to non-vested awards not yet recognized amounted to $0 at September 30, 2019.

NOTE 7: DISCONTINUED OPERATIONS

During May 2019, the Company decided to discontinue most of its operating activities pursuant to the Asset Purchase Agreement entered into with CAKE Software, Inc. (see Note 1).

In accordance with the provisions of ASC ~~842 on its consolidated financial statements. The~~205-20, the Company has ~~elected to apply~~separately reported the ~~practical expedient to certain classes of leases, whereby the separation of components of leases into lease~~assets and ~~non-lease components is not required and all~~liabilities of the practical expedients to all leases, which include not reassessing (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases, and (3) initial direct costs for any existing leases. The adoption of the new standard resulteddiscontinued operations in the recording of a right-of-use asset at January 1, 2019 of $1,569,100 and a lease liability at January 1, 2019 of $1,725,375 and the subsequent amortization of the asset of $65,431 and the lease liability of $66,164. The adoption of ASU 2016-02, as amended, has had no impact on the unaudited condensed consolidated ~~statements~~balance sheets. The assets and liabilities have been reflected as discontinued operations in the consolidated balance sheets as of ~~operations or unaudited condensed consolidated statements~~September 30, 2019 and December 31, 2018, and consist of ~~cash flows.~~the following:

March 31,
2019

December 31,
2018

Operating lease right-of-use asset, January 1, 2019
$ 1,569,100 $ -
Operating lease right-of-use asset, amortization
65,431 -
Operating lease right-of-use asset, March 31, 2019
$ 1,503,669 $ -

Operating lease liability, January 1, 2019
$ 1,725,375 $ -
Operating lease liability, amortization
66,164 -
Operating lease liability, March 31, 2019 (1)
$ 1,659,211 $ -

	September 30,		December 31,
	2019		2018
	(Unaudited)
Current assets of discontinued operations
Accounts receivable, net [1]	$	-	$	2,081,551
Prepaid expenses and other assets		-		254,760
Total current assets of discontinued operations	$	-	$	2,336,311

Noncurrent assets of discontinued operations
Property and equipment, net [2]	$	-	$	52,035
Other assets		-		108,211
Total noncurrent assets of discontinued operations	$	-	$	160,246

Current liabilities of discontinued operations
Accounts payable and accrued expenses	$	76,028	$	3,018,394
Deferred revenues [3]		-		443,650
Credit facility, short term [4]		-		3,399,240
Total current liabilites of discontinued operations	$	76,028	$	6,861,284

Noncurrent liabilities of discontinued operations
Credit facility, net of unamortized financing costs [4]	$	-	$	5,888,155
Other loan, related party net of unamortized financing costs [5]		-		386,686
Other long-term loan, net of unamortized financing costs [5]		-		2,273,402
Other liabilities		-		637,500
Total noncurrent liabilites of discontinued operations	$	-	$	9,185,743

~~(1) Includes short-term portion~~[1]

The Company’s accounts receivable was due primarily from advertisers and marketers. Collateral was not required. The Company also maintained allowances for doubtful accounts for estimated losses resulting from the inability of ~~$296,461~~the Company’s customers to make payments. The Company periodically reviewed these estimated allowances, including an analysis of the customers’ payment history and ~~long-term portion~~creditworthiness, the age of ~~$1,362,750.~~the trade receivable balances and current economic conditions that may affect a customer’s ability to make payments as well as historical collection trends for its customers as a whole. Based on this review, the Company specifically reserved for those accounts deemed uncollectible or likely to become uncollectible. When receivables were determined to be uncollectible, principal amounts of such receivables outstanding were deducted from the allowance. The allowance for doubtful accounts amounted to $0 and $245,736 at September 30, 2019 and December 31, 2018, respectively.

[2]	The Company’s property and equipment consisted of the following.

~~Amount~~

	September 30,		December 31,
	2019		2018
	(Unaudited)

Computer equipment and software	$	-	$	422,441
Office furniture and equipment		-		123,932
Leasehold improvements		-		288,937

		-		835,310

Less: accumulated depreciation		-		(783,275	)

	$	-	$	52,035

Depreciation expense from discontinued operations amounted to $0 and $10,035 for the three months ended September 30, 2019 and 2018, respectively. Depreciation expense amounted to $31,042 and $35,747 for the nine months ended September 30, 2019 and 2018, respectively. The deprecation expense for each period is reflected as a component of ~~future annual minimum payments under operating lease obligations at March 31, 2019 are as follows:~~discontinued operations.

Lease Payments

Remainder of 2019
$ 358,877
2020 $ 490,230
2021
$ 504,304
2022
$ 518,378
2023
$ 265,053

~~NOTE 3: PREPAID EXPENSES~~

~~At March 31, 2019 and December 31, 2018, the Company’s prepaid expenses consisted primarily of prepaid insurance and tradeshow costs.~~

~~NOTE 4: DEFERRED REVENUES~~

The Company’s deferred revenues consist of prepayments made by certain of the Company’s customers and undelivered implementation and training fees. The Company decreases the deferred revenues by the amount of the services it renders to such clients when provided.

March 31,
2019

December 31,
2018

Deferred revenues
$ 239,029 $ 443,650

[3]	The Company’s deferred revenue represented prepayments made by certain customers and undelivered implementation and training fees. The Company decreased the deferred revenues by the amount of the services it rendered to such clients when provided.

~~NOTE 5: CREDIT FACILITY AND LOAN~~

~~Agility Loan~~
[4]
A summary of the amounts previously outstanding under the Company’s credit facilities are as follows:

	~~March 31,~~ ~~2019~~		~~December 31,~~ ~~2018~~
~~Agility Loan~~		-		~~625,000~~
~~Amendment, added to balance~~		-		~~400,000~~
~~Principal Payment of Agility Loan~~		-		~~(1,025,000~~	)
~~Balance~~	$	-	$	-

	September 30,		December 31,
	2019		2018
	(Unaudited)

Saas Capital Loan	$	-	$	4,810,135
Less: deferred financing costs		-		(100,867	)
Saas Capital Loan, net		-		4,709,268

Beedie Credit Agreement	$	-	$	6,000,000
Less: deferred financing costs		-		(1,421,873	)
Beedie Credit Agreement, net		-		4,578,127

Total outstanding	$	-	$	10,810,135
Less: deferred financing costs		-		(1,522,740	)
Total credit facility loans	$	-	$	9,287,395

Short-term balance	$	-	$	3,399,240
Long-term balance		-		5,888,155
Total credit facility loans	$	-	$	9,287,395

On March 11, 2016, the Company entered into a subordinated loan, or the Agility Loan with Agility Capital II, LLC, or Agility, which provided for total availability of $625,000 and was to originally mature, prior to amendment, on March 31, 2017. The Agility Loan had a fixed interest rate of 12% per year and required $25,000 monthly amortization payments beginning on June 1, 2016. The Agility Loan also required fees of approximately $130,000 over the life of the loan and is subject to a total aggregate minimum interest of $50,000 in the event of a prepayment. The Agility Loan contained covenants to achieve specified Adjusted EBITDA levels, as defined, limiting capital expenditures, restricting our ability to pay dividends, purchase and sell assets outside the ordinary course and incur additional indebtedness. At the time of repayment of the Agility Loan, in January 2018, the Company was in compliance with these covenants.

In connection with the Agility Loan, on June 30, 2016, as a result of outstanding amounts under the Agility Loan, the Company issued to Agility Capital a warrant to purchase up to 69,444 shares of the Company’s Common Stock at an exercise price of $0.45 per share. This warrant expires on March 11, 2021. The fair value of the warrant amounted to $15,880 and was capitalized as deferred financing costs, the entirety of which was expensed prior to 2018.

On November 29, 2016, the Company entered into an amendment of the Agility Loan which waived any event of default and the breach of any covenant, representation, warranty, and any other agreement contained in the Agility Loan as a result of the entering into of the Settlement Agreement. On the date of the amendment, a loan modification fee in the amount of $100,000, fully earned and non-refundable, was added to the outstanding loan balance and shall accrue interest, expensed in the statement of operations. Additionally, the maturity date was extended to December 31, 2017. On November 29, 2016, the Company issued to Agility Capital a warrant to purchase up to 187,500 shares of the Company’s Common Stock at an exercise price of $0.40 per share. This warrant expires on November 29, 2021. The fair value of the warrant amounted to $42,427 and was capitalized as deferred financing costs, the entirety of which was expensed prior to 2018.

~~On August 14, 2017, the Company entered into a consent to waiver of the Agility Loan, to permit the issuance of promissory notes to lenders, as further described below.~~

On November 8, 2017, the Company entered into the third amendment of the Agility Loan whereby Agility Capital agreed to loan an additional $300,000 to the Company, such that the aggregate principal amount owing to Agility Capital as of November 9, 2017 was $625,000. The Third Amendment extended the maturity date of the Agility Loan from December 31, 2017 to December 31, 2018. A loan modification fee of $125,000 was deducted from the Additional Loan amount. This arrangement was treated as a substantial modification of existing debt pursuant to the guidance of ASC 470-50 “Debt – Modifications and Extinguishments” (“ASC 470-50”). Because the net present value of the modified notes was greater than 10% of the present value of the remaining cash flows under the old debt, the transaction was treated as a debt extinguishment and reissuance of a new debt instrument, with the fair value of $606,034 and therefore recorded $106,034 as a loss on debt extinguishment. The carrying value of the $625,000 did not change as a result of the extinguishment since the discounts recognized at inception of these new notes were fully amortized at the time of the issuance.

On January 26, 2018, the Company repaid the Agility Loan by paying Agility Capital approximately $581,000 which terminated the loan agreement between the Company and Agility Capital and released Agility Capital’s security interest in Company assets. The Company owed $0 under the Agility Loan at March 31, 2019 and December 31, 2018.

~~Credit Facility - SaaS~~SAAS Capital Loan

March 31,
2019

December 31,
2018

SaaS Capital Loan, Total advances
$ 10,253,000 $ 10,253,000
Principal Payment of SaaS Capital Loan
(5,802,865
)
(5,442,865
)
Less: Deferred financing cost
(50,084
)
(100,867
)
Less: SaaS Capital Loan, short term
(2,902,259
)
(3,399,240
)
Balance
$ 1,497,792 $ 1,310,028

On May 5, 2016, the Company entered into a loan and security agreement, or the SaaS Capital Loan, with SaaS Capital Funding II, LLC, or SaaS Capital, to borrow up to a maximum of $8,000,000. Initial amounts borrowed ~~will accrue~~accrued interest at the rate of 10.25% per annum with future amounts borrowed bearing interest at the greater of 10.25% or 9.21% plus the three-year treasury rate at the time of advance. Accrued interest on amounts borrowed iswas payable monthly for the first six months and thereafter 36 equal monthly payments of principal and interest is payable. Prepayments ~~will be~~were subject to a 10%, 6% or 3% of principal premium if prepaid prior to 12 months, between 12 and 24 months, or between 24 months and maturity, respectively. Advances may be requested until May 5, 2018. The initial minimum advance amount of $5,000,000, on May 5, 2016, was used to repay the outstanding Line of Credit balance of $4,572,223. A facility fee of $80,000 was paid by the Company in connection with the initial advance and an additional $80,000 was paid on May 2017. Additionally, the Company incurred initial financing costs of $160,000 which were capitalized as deferred financing costs, of which $13,333 was expensed at March 31, 2019 and 2018.

The SaaS Capital Loan contains customary covenants including, but not limited to, covenants to achieve specified Adjusted EBITDA levels and revenue renewal levels, limiting capital expenditures and restricting the Company's ability to pay dividends, purchase and sell assets outside the ordinary course and incur additional indebtedness. As of March 31, 2019, the Company was in compliance with such covenants, except for the minimum liquidity and secured debt covenants, defaults relating to which have been waived by SaaS Capital. The occurrence of a material adverse change will be an event of default under the SaaS Capital Loan, in addition to other customary events of default. The Company granted SaaS Capital a security interest in allfair value of the ~~Company's personal property and intellectual property through the SaaS Capital Loan and the Patent, Trademark and Copyright Security Agreement between the Company and SaaS Capital.~~

~~On May 5, 2016,~~warrants previously issued in connection with the SaaS Capital Loan were recorded as discounts to the ~~Company issued to SaaS Capital Partners II, LP, an affiliate of SaaS Capital, a warrant to purchase up to 1,333,333 shares of~~notes payable and were being amortized into interest expense over the ~~Company's common stock at an exercise price of $0.45 per share subject to certain adjustments for dividends, splits or reclassifications. The warrant is exercisable until~~maturity periods. During the earlier of May 5, 2026, or the date that is 5 years from the date the Company’s equity securities are first listed for trading on NASDAQ. The Company paid approximately $169,000 in financing costs and $9,430 was capitalized as deferred financing costs, of which $786 was expensed during the three-month periodsthree months ended ~~March 31,~~September 30, 2019 and ~~2018. The fair value~~2018, $0 and $49,996, respectively, of debt discount was amortized into interest expense. During the ~~warrant amounted to $383,128 and was capitalized as deferred financing costs, of which $31,927 was expensed during the three-month periods~~nine months ended ~~March 31,~~September 30, 2019 and ~~2018.~~

~~On November 29, 2016,~~2018, $100,867 and $148,410, respectively, of debt discount was amortized into interest expense. At the ~~Company entered into an amendment of~~time the ~~SaaS Capital Loan to receive consent from SaaS Capital to enter into a litigation settlement agreement with a former officer, or the Settlement Agreement. The amendment required a~~outstanding loan ~~modification fee of $120,000, payable at $10,000 a month for one year, expensed~~balances were settled in the statement of operations. In connection with this amendment, the Company agreed to issue SaaS Capital a warrant to purchase up to 200,000 shares of the Company’s Common Stock at an exercise price of $0.36 per share. This warrant expires on November 29, 2026. The fair value of the warrant amounted to $60,185 which was fully expensed at December 31, 2016.June 2019, any remaining discount balances were recorded as interest expense.

On May 10, 2017, the Company entered into a second amendment of the SaaS Capital Loan, or the Second Amendment, which adjusted the Minimum Adjusted EBITDA covenant of the SaaS Capital Loan from $0 to ($150,000) until August 31, 2017 to give the Company added flexibility in completing our hosting migration to a new platform and to allow for potentially augmented marketing and sales efforts.

On June 16, 2017, the Company entered into a third amendment of the SaaS Capital Loan, or the Third Amendment, to provide that any advance made within 6 months of the final advance date will be for a 36-month period with interest only payments due from the date of advance until the final advance date.

~~On August 14, 2017, the Company entered into a fourth amendment of the SaaS Capital Loan, or the Fourth Amendment, to permit the issuance of the 2017 Promissory Notes, further described below.~~

On November 8, 2017, the Company entered into a fifth amendment of the SaaS Capital Loan, or the Fifth Amendment, which adjusted the Minimum Adjusted EBITDA covenant of the SaaS Capital Loan from $0 to ($170,000) until October 31, 2017, to ($150,000) from November 1, 2017 to December 31, 2017, to ($100,000) from January 1, 2018 to May 31, 2018, to ($50,000) from June 1, 2018 to August 31, 2018, and to $0 thereafter. The Fifth Amendment added a new minimum liquidity covenant for a cash balance of $600,000 effective January 31, 2018. The Fifth Amendment also memorialized SaaS Capital’s waiver of the Minimum Adjusted EBITDA covenant for September 2017. In connection with the Fifth Amendment, the Company agreed to pay to SaaS Capital a fee of $375,000 upon the payment in full of all outstanding advances.

On January 25, 2018, the Company entered into a sixth amendment of the SaaS Capital Loan, or the Sixth Amendment, to permit the Company to enter into the Beedie Credit Agreement, further described below, and to permit the repayment of Agility Capital and of the 2017 Promissory Notes. The Sixth Amendment also amended the Company’s adjusted EBITDA covenant and added covenants requiring a minimum gross margin and specified debt to monthly recurring revenue ratios. This arrangement was treated as a normal modification of existing debt pursuant to the guidance of ASC 470-50 “Debt – Modifications and Extinguishments” (“ASC 470-50”). Because the net present value of the modified notes was lesser than 10% of the present value of the remaining cash flows under the old debt, the transaction was treated as a debt modification. In connection with the Sixth Amendment, the Company agreed to issue SaaS Capital a warrant to purchase up to 200,000 shares of its Common Stock at an exercise price of $0.35 per share, subject to certain adjustments for dividends, splits or reclassifications. The fair value of the warrant amounted to $56,834 and was capitalized as deferred financing costs, of which $4,736 and $3,157 was expensed during the three-month period ended March 31, 2019 and 2018, respectively.

On May 31, 2018, the Company entered into a seventh amendment of the SaaS Capital Loan, or the Seventh Amendment, to permit the issuance of the 2018 Promissory Notes, as further described below, to amend the Company’s adjusted EBITDA, revenue renewal and total debt to monthly recurring revenue covenants, to increase the success fee payable upon repayment of the facility by $120,000 to $495,000, and to fix prepayment penalties until October 31, 2018.

~~On June 13, 2018, the Company entered into an eighth amendment of the SaaS Capital Loan, or the Eighth Amendment, to issue additional 2018 Promissory Notes.~~

On August 31, 2018, the Company entered into a ninth amendment of the SaaS Capital Loan, or the Ninth Amendment, to permit the issuance of the August 2018 Promissory Notes, as further described below, to amend the Company’s minimum adjusted EBITDA, revenue renewal, total debt to monthly recurring revenue and secured debt to monthly recurring revenue covenants, to increase the success fee payable upon repayment of the facility to $555,000 and to provide for twice monthly reporting of the Company’s projected cash flows.

~~On January 23,~~15, 2019, the Company entered into a ~~tenth amendment~~consent letter, agreement and waiver of the SaaS Capital Loan, or the Tenth Amendment, to, among other things, defer the Company’s January 15, 2019 principal payment until the earlier of March 15, 2019 or payment of the SaaS Capital Loan in full, amend the Company’s minimum adjusted EBITDA, revenue renewal, and secured debt to monthly recurring revenue covenants, to increase the success fee payable upon repayment of the SaaS Capital Loan to $605,000 and to provide for weekly reporting of the Company’s projected cash flows.

~~On March 1, 2019, the Company entered into a payment deferral agreement with respect to~~ the SaaS Capital Loan to, among other things, ~~defer a portion~~provide that upon the closing of the Asset Purchase Agreement with Constellation, the Company will pay to SaaS Capital the outstanding principal balance and accrued but unpaid interest due under the SaaS Capital Loan plus $250,000 in fees, SaaS Capital will release its liens related to the Company’s CAKE Business assets, SaaS Capital’s warrants to purchase an aggregate of 1,733,333 shares of the Company’s ~~January, February~~common stock will be cancelled, and ~~March 2019 principal payments until~~fees payable under the ~~earlier of May 15, 2019 or payment~~terms of the SaaS Capital Loan in ~~full.~~the aggregate amount of $495,186 will be payable to SaaS Capital from the holdback and earnout payments payable by Constellation under the Asset Purchase Agreement in which the Company granted to SaaS Capital a security interest.

~~During the three months ended March 31, 2019, the Company borrowed $0 from the SaaS Capital Loan, and made principal payments of $360,000.~~

~~The Company owed $4,450,135 and $4,810,135~~All amounts outstanding under the SaaS Capital Loan ~~at March 31,~~were paid in full on June 18, 2019 ~~and December 31, 2018, respectively.~~

~~2017~~ ~~Promissory Notes~~

March 31,
2019

December 31,
2018

2017 Promissory Notes, Total
$ - $ 1,000,000
Principal Payment of 2017 Promissory Notes
- (1,000,000
2017 Promissory Notes, Outstanding balance
- -
Less: Deferred financing cost
- -
Less: 2017 Promissory Notes, short term
- -
Balance
$ - $ -

~~On August 14, 2017,~~upon the ~~Company borrowed an aggregate of $1,000,000 from seven lenders, or the 2017 Lenders, and issued promissory notes, or the 2017 Promissory Notes, for the repayment~~closing of the ~~amounts borrowed.~~Asset Purchase Agreement with Constellation. The ~~2017 Lenders are all accredited investors, certain~~total amount paid to satisfy the remaining obligation under the SaaS Capital Loan as of the ~~2017 Lenders are shareholders~~closing date amounted to $4,576,123, consisting of the ~~Company, one~~remaining principal balance outstanding of ~~the 2017 Lenders is an affiliate~~$4,252,209, as well as interest and fees of the Company’s director, Greg Akselrud, and two of the 2017 Lenders are each affiliated with a partner of Mr. Akselrud’s in the law firm of Stubbs Alderton and Markiles, LLP. The 2017 Promissory Notes are unsecured, have a maturity date of August 14, 2019 and all principal is due upon maturity. Amounts borrowed accrue interest at 12% per annum and accrued interest is payable monthly. The Company also issued to the 2017 Lenders three-year warrants to purchase an aggregate of 1,000,000 shares of the Company’s Common Stock at an exercise price of $0.35 per share. The fair value of the warrant amounted to $104,676 and was capitalized as deferred financing costs, of which $0 and $82,868 was expensed during the three-month period ended March 31, 2019 and 2018, respectively.

On January 26, 2018, the Company paid approximately $1,074,000 to repay the 2017 Promissory Notes issued to the 2017 Lenders, which includes approximately $65,000 in additional interest expenses due to the repayment date which was prior to the maturity date. The Company owed $0 under the 2017 Promissory Notes at March 31, 2019 and December 31, 2018. $323,914.

Beedie Credit Agreement

March 31,
2019

December 31,
2018

Total advances
$ 6,500,000 $ 6,000,000
Deferred interest reclassed to principal
62,379 -
Principal Payment of Loan
- -
Less: Deferred financing cost
(1,391,678
)
(1,421,873
)
Balance
$ 5,170,701 $ 4,578,127

On January 25, 2018, the Company entered into a non-revolving term credit agreement, or the Beedie Credit Agreement, with Beedie Investments Limited, or Beedie, to borrow up to a maximum of $7,000,000. Outstanding principal will accrue interest at the rate of 12% per annum increasing to 14% per annum if the Company’s gross margins fall below amounts specified in the Beedie Credit Agreement. Accrued interest on outstanding principal iswas payable monthly in arrears. The Company paid Beedie a commitment fee of $175,000 and ~~will pay~~paid to Beedie a monthly standby fee of 0.325% on the unadvanced and available amount. Advances may be requested until July 25, 2020 and outstanding principal must be paid in full on January 25, 2021. Prepayment, which if at the Company’s option must be made in full and is otherwise required following certain asset dispositions, will be subject to a fee of 24 months accrued interest less all interest previously paid by the Company on the outstanding principal amount if paid prior to January 25, 2020. The initial minimum advance amount of $4,500,000 was advanced on January 26, 2018. Approximately $581,000 of the initial advance was used to repay Agility Capital to terminate the loan agreement between the Company and Agility dated March 11, 2016, as amended, and to release Agility Capital’s security interest in Company assets. Approximately $1,074,000 of the initial advance was used to repay the 2017 Promissory Notes issued to the 2017 Lenders on August 14, 2017. The $175,000 commitment fee was capitalized as deferred financing costs, of which $14,583 and $9,722 was expensed during the three-month period ended March 31, 2019 and 2018, respectively.

The Beedie Credit Agreement contains customary covenants including, but not limited to, covenants to achieve specified adjusted EBITDA levels, to maintain minimum revenue renewal and liquidity levels, to maintain minimum gross margins, to maintain specified debt to monthly recurring revenue ratios, that limit capital expenditures and restrict the Company's ability to pay dividends, purchase and sell assets outside the ordinary course, and that limit the Company’s ability to incur additional indebtedness. As of March 31, 2019, the Company was in compliance with such covenants, except for the minimum liquidity and secured debt covenants, defaults relating to which have been waived by Beedie. The occurrence of a material adverse change will be an event of default under the Beedie Credit Agreement, in addition to other customary events of default. Default interest will be charged at 18% per annum. The Company granted Beedie a security interest, subordinated to the security interest of SaaS Capital, in allfair value of the Company's assets through a pledge and security agreement, patent security agreement and trademark security agreement, each between the Company and Beedie. As additional security, the Company’s Subsidiarywarrants previously issued ~~an unlimited guarantee to Beedie. Beedie is entitled to board of director observation rights during the term of the Beedie Credit Agreement.~~

Inin connection with the Beedie Credit Agreement the Company issued to Beedie a warrant, or the Beedie Warrant, to purchase up to 4,500,000 shares of the Company's common stock at an exercise price of $0.35 per share subject to certain adjustments for dividends, splits or reclassifications, and a weighted average adjustment for certain issuances of common stock below the exercise price prior to January 26, 2019. Up to 2,500,000 additional shares of common stock under the Beedie Warrant will be exercisable on a pro rata basis to additional amounts borrowed if and when advanced under the Beedie Credit Agreement. The Company adopted ASU 2017-11 which revises ASC 815-10-15-74 to allow instruments with a down round features to qualify for equity classification. Under the new guidance, the issuer would recognize the value of the feature only when it is activated and there is an actual reduction of the strike price or conversion feature. The value of the adjustment is then to bewere recorded as ~~deemed dividend~~discounts to the notes payable and ~~a reduction of income available to common stockholders. The fair value of~~were being amortized into interest expense over the ~~warrant amounted to $1,099,861 and was capitalized as deferred financing costs, of which $91,655 and $61,103 was expensed during~~maturity periods. During the ~~three-month period~~three months ended ~~March 31,~~September 30, 2019 and 2018, ~~respectively.~~$0 and $129,727, respectively, of debt discount was amortized into interest expense. During the nine months ended September 30, 2019 and 2018, $1,571,181 and $310,801, respectively, of debt discount was amortized into interest expense. At the time the outstanding loan balances were settled in June 2019, any remaining discount balances were recorded as interest expense.

On May 31, 2018, the Company entered into a first amendment, or the First Beedie Amendment, of the Beedie Credit Agreement to permit the issuance of the 2018 Promissory Notes, as further described below, to amend the Company’s adjusted EBITDA, revenue renewal and total debt to monthly recurring revenue covenants, and to add a secured debt to monthly recurring revenue covenant. In addition, the Company issued to Beedie a warrant to purchase up to 500,000 shares of the Company's common stock at an exercise price of $0.35 per share subject to certain adjustments for dividends, splits or reclassifications, and a weighted average adjustment for certain issuances of common stock below the exercise price prior to January 25, 2019. This arrangement was treated as a normal modification of existing debt pursuant to the guidance of ASC 470-50 “Debt – Modifications and Extinguishments” (ASC 470-50). Because the net present value of the modified notes was lesser than 10% of the present value of the remaining cash flows under the old debt, the transaction was treated as a debt modification. The fair value of the warrant amounted to $120,330 and was capitalized as deferred financing costs, of which $10,027 and $0 was expensed during the three-month periods ended March 31, 2019 and 2018, respectively.

On June 13, 2018, the Company entered into a second amendment, or the Second Beedie Amendment, of the Beedie Credit Agreement to issue additional 2018 Promissory Notes, as further described below. In addition, the Company issued to Beedie a warrant to purchase up to 100,000 shares of the Company's common stock at an exercise price of $0.35 per share subject to certain adjustments for dividends, splits or reclassifications, and a weighted average adjustment for certain issuances of common stock below the exercise price prior to January 25, 2019. This arrangement was treated as a normal modification of existing debt pursuant to the guidance of ASC 470-50 “Debt – Modifications and Extinguishments” (ASC 470-50). Because the net present value of the modified notes was lesser than 10% of the present value of the remaining cash flows under the old debt, the transaction was treated as a debt modification. The fair value of the warrant amounted to $24,053 and was capitalized as deferred financing costs, of which $2,004 and $0 was expensed during the three-month periods ended March 31, 2019 and 2018, respectively.

On August 31, 2018, the Company entered into a third amendment, or the Third Beedie Amendment, of the Beedie Credit Agreement to borrow the second tranche of the term loan facility in the amount of $1,500,000, to permit the issuance of the August 2018 Promissory Notes, as further described below, to amend the commitment fee, to amend the Company’s minimum adjusted EBITDA, revenue renewal, total debt to monthly recurring revenue and secured debt to monthly recurring revenue covenants and to provide for twice monthly reporting of the Company’s projected cash flows. In connection with the Third Beedie Amendment, the Company issued to Beedie a warrant to purchase up to 1,500,000 shares of the Company's common stock and a warrant to purchase up to an additional 835,000 shares of the Company’s common stock at an exercise price of $0.35 per share subject to certain adjustments for dividends, splits or reclassifications, and a weighted average adjustment for certain issuances of common stock below the exercise price prior to January 25, 2019. The fair value of these warrants amounted to $412,484 and was capitalized as deferred financing costs, of which $42,671 and $0 was expensed during the three-month periods ended March 31, 2019 and 2018, respectively. A commitment fee of $75,000 was capitalized as deferred financing costs, of which $7,759 and $0 was expensed during the three-month periods ended March 31, 2019 and 2018, respectively.

~~On January 23,~~15, 2019, the Company entered into a ~~fourth~~seventh amendment ~~or the Fourth Beedie Amendment,~~ of the Beedie Credit Agreement to, among other things, ~~defer~~provide that upon the Company’s January 31, 2019 interest payment to Beedie and add it to the amount due at maturity, amend the Company’s minimum adjusted EBITDA, revenue renewal, and secured debt to monthly recurring revenue covenants and to provide for weekly reportingclosing of the ~~Company’s projected cash flows. The~~Asset Purchase Agreement with Constellation, the Company will pay to Beedie ~~a fee of $50,000 for~~ the ~~Fourth Beedie Amendment to be paid on or before the maturity date of~~outstanding principal balance and accrued but unpaid interest due under the Beedie Credit ~~Agreement.~~

~~On March 1, 2019,~~Agreement, Beedie will release its liens related to the ~~Company entered into a fifth amendment, or~~Company’s CAKE Business assets, Beedie’s warrants to purchase an aggregate of 7,935,000 shares of the ~~Fifth Beedie Amendment,~~Company’s common stock will be cancelled, and fees payable under the terms of the Beedie Credit Agreement ~~to borrow the third tranche of the term loan facility~~ in the aggregate amount of ~~$500,000. In connection with~~$1,015,862 will be payable to Beedie from the ~~Fifth Beedie Amendment,~~holdback and earnout payments payable by Constellation under the Asset Purchase Agreement in which the Company ~~issued~~granted to Beedie a warrant to purchase up to 500,000 shares of the Company's common stock at an exercise price of $0.15 per share subject to certain adjustments for dividends, splits or reclassifications. The fair value of these warrants amounted to $44,670 and was capitalized as deferred financing costs, of which $1,942 and $0 was expensed during the three-month periods ended March 31, 2019 and 2018, respectively. Additionally, per the down round feature of the Beedie Warrants, pursuant to ASU 2017-11 which allows instruments with a down round feature to qualify for equity classification, the Company recognized the value of the feature when it was activated and there was an actual reduction of the strike price or conversion feature. The fair value of the reduction in income of all previously issued warrants to Beedie amounted to $104,638 and was capitalized as deferred financing costs, of which $8,861 and $0 was expensed during the three-month periods ended March 31, 2019 and 2018, respectively.security interest.

~~The Company owed $6,562,379 and $6,000,000~~All amounts outstanding under the Beedie ~~Loan at March 31,~~Credit Agreement were paid in full on June 18, 2019 upon the closing date of the Asset Purchase Agreement with Constellation. The total amount paid to satisfy the remaining obligation under the Beedie Credit Agreement as of the closing date amounted to $7,033,208, consisting of the remaining principal balance outstanding of $6,962,379, as well as interest and ~~December 31, 2018, respectively~~fees of $70,829.

[5]	A summary of the amounts previously outstanding under the Company’s other long-term loans were as follows:

	September 30,		December 31,
	2019		2018
	(Unaudited)

2018 Promissory Notes	$	-	$	1,450,000
August 2018 Promissory Notes		-		1,500,000
Less: deferred financing costs		-		(676,598	)
Other long-term loans, net	$	-	$	2,273,402


2018 Promissory Notes, related party	$	-	$	550,000
Less: deferred financing costs		-		(163,314	)
	$	-	$	386,686

2018 Promissory Notes

On May 31, 2018, and June 15, 2018, the Company borrowed an aggregate of ~~$1,500,000 and $500,000,~~$2,000,000, respectively, from thirteen lenders, or the 2018 Lenders, and issued promissory notes, or the 2018 Promissory Notes, for the repayment of the amounts borrowed. The 2018 Lenders are all accredited investors, one of the 2018 Lenders is an affiliate of the Company’s director, Greg Akselrud, two of the 2018 Lenders are related to the Company’s Chairman and Chief Executive Officer, Brian Ross, and two of the 2018 Lenders are the Company’s employees. The 2018 Promissory Notes are unsecured, have a maturity date of May 30, 2021 and all principal is due upon maturity. Amounts borrowed accrue interest at 12% per annum and accrued interest is payable monthly. The Company also issued to the 2018 Lenders six-year warrants to purchase an aggregate of 3,000,000 shares of the Company’s Common Stock at an exercise price of $0.35 per share. ~~The fair value~~

All amounts outstanding under the 2018 Promissory Notes were paid in full or settled through the exchange of outstanding amounts into Series A Preferred Stock on June 18, 2019 upon the closing of the ~~warrants amounted to $737,218 and~~Asset Purchase Agreement with Constellation. There was ~~capitalized as deferred financing costs, of which $61,435 and $0 was expensed during the three-month periods ended March 31, 2019 and 2018, respectively.~~no gain or loss associated with this transaction.

August 2018 Promissory Notes

On August 31, 2018, the Company borrowed an aggregate of $1,500,000 from ten lenders, or the August 2018 Lenders and issued promissory notes, or the August 2018 Promissory Notes, for the repayment of the amounts borrowed. The August 2018 Lenders are all accredited investors. The August 2018 Promissory Notes are unsecured, have a maturity date of August 30, 2021 and all principal is due upon maturity. Amounts borrowed accrue interest at 12% per annum and accrued interest is payable monthly. The Company also issued to the August 2018 Lenders six-year warrants to purchase an aggregate of 1,500,000 shares of the Company’s common stock exercisable for cash at an exercise price of $0.35 per share.

All amounts outstanding under the August 2018 Promissory Notes were paid in full or settled through the exchange of outstanding amounts into Series A Preferred Stock on June 18, 2019 upon the closing of the Asset Purchase Agreement with Constellation. There was no gain or loss associated with this transaction.

The fair value of the warrants ~~amounted to $276,798 and was capitalized as deferred financing costs, of which $23,066 and $0 was expensed during the three-month periods ended March 31, 2019 and 2018, respectively.~~

~~The Company recognized amortization and interest expenses~~previously issued in connection with the ~~above credit facility~~2018 Promissory Notes and ~~loans~~the August 2018 Promissory Notes were recorded as ~~follows.~~

Three-month periods ended

March 31,

2019

2018

Amortization expense associated with the credit facility and loan
$ 314,787 $ 202,898
Interest expense associated with the credit facility and loan
$ 407,074 $ 373,257
Other finance fees associated with the credit facility and loan
$ 5,609 $ 28,655

~~NOTE 6: STOCKHOLDERS’ DEFICIT~~

~~Common Stock~~

~~There~~discounts to the notes payable and were ~~no exercises of options during~~being amortized into interest expense over the ~~three-month periods ended March 31, 2019 or 2018.~~

~~As of March 31, 2019, and December 31, 2018, there were 66,179,709 shares of Common Stock issued and outstanding.~~

~~Restricted Stock~~

During 2018 and 2017, the Company issued 120,000 restricted shares of its Common Stock, at a value of $0.50 per share, vesting in 4 equal quarterly increments commencing on July 1, 2018 and July 1, 2017, to each of its non-employee directors as partial annual compensation for services as a director. As of March 31, 2019 and 2018, these restricted shares were fully issued. The Company recorded expenses of $30,000 during the three-month periods ended March 31, 2019 and 2018. $30,000 remained unvested as of March 31, 2019 and 2018.

~~Warrants~~

~~There were no exercises of warrants during the three-month period ended March 31, 2019 or 2018.~~

maturity periods. During the three months ended ~~March 31,~~September 30, 2019 ~~the Company issued 500,000 warrants exercisable at a price~~and 2018, $0 and $69,124, respectively, of ~~$0.15 per share which expire on January 25, 2024. The fair value of these warrants amounted to $44,670, and~~debt discount was ~~recognized as deferred financing costs using the effective~~amortized into interest method during the three-month period ended March 31, 2019. Additionally, per the down round feature of the Beedie Warrants, pursuant to ASU 2017-11 which allows instruments with a down round feature to qualify for equity classification, the Company recognized the value of the feature when it was activated and there was an actual reduction of the strike price or conversion feature. The reduction in income of all previously issued warrants to Beedie amounted to $104,638 and was capitalized as deferred financing costs during the three-month period ended March 31, 2019.

expense. During the ~~three~~nine months ended March 31, 2018, the Company issued 200,000 and 4,500,000 warrants exercisable at a price of $0.35 per share and which expire on January 25, 2028 and January 25, 2024, respectively. The fair value of these warrants amounted to $56,834 and $1,099,861, respectively, and were recognized as deferred financing costs and amortized using the effective interest method over the terms of the associated loan. During this same period, 58,824 warrants expired.

~~As of March 31,~~September 30, 2019 and ~~December 31,~~ 2018, ~~there~~$839,912 and $89,602, respectively, of debt discount was amortized into interest expense. At the time the outstanding loan balances were ~~25,545,517 and 16,110,517 warrants issued and outstanding, respectively, with a weighted average price $0.53 and $0.62, respectively.~~settled in June 2019, any remaining discount balances were recorded as interest expense.

In accordance with the provisions of ASC 205-20, the Company has excluded the results of discontinued operations from its results of continuing operations in the accompanying unaudited condensed consolidated statements of operations. The ~~Company recorded expenses~~results of ~~$89,119 and $61,050 during~~the discontinued operations of the CAKE Business for the three and nine months ended ~~March 31,~~September 30, 2019 and 2018 ~~respectively, related to warrants granted.~~have been reflected as discontinued operations in the consolidated statements of operations, and consist of the following:

	For the Three Months Ended						For the Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2019			2018			2019			2018


Net revenues	$	-		$	5,292,304		$	9,001,307		$	16,682,730
Cost of revenue		-			2,042,435			3,863,471			6,865,431
Gross profit		-			3,249,869			5,137,836			9,817,299

Operating expenses:
Research and development		-			1,033,707			1,263,808			3,144,106
Sales and marketing		-			1,127,055			2,016,637			3,359,247
General and administrative		(1,113	)		2,058,823			3,085,692			5,262,154
Total operating expenses		(1,113	)		4,219,585			6,366,137			11,765,507

Loss from operations		1,113			(969,716	)		(1,228,301	)		(1,948,208	)

Other income (expense):
Gain on sale of discontinued operations		-			-			19,473,080			-
Interest income		-			(247	)		34			503
Interest expense		-			(679,663	)		(3,773,651	)		(1,819,628	)
Total other income (expense)		-			(679,910	)		15,699,463			(1,819,125	)

Net income (loss) from discontinued operations before provision for income taxes		1,113			(1,649,626	)		14,471,162			(3,767,333	)
Provision for (benefit from) income taxes		-			-			-			-
Net income (loss) from discontinued operations	$	1,113		$	(1,649,626	)	$	14,471,162		$	(3,767,333	)

~~Options~~The following is a summary of the gain on sale of discontinued operations of the CAKE Business reflected above during the nine months ended September 30, 2019.

Gross proceeds received	$	20,892,667

Less: value of net assets sold

Accounts receivable		1,979,342
Prepaid and other current assets		51,363
Property and equipment		20,986
ROU lease asset		1,458,922
Other assets		39,702
Accounts payable and accrued expenses		(344,787	)
Deferred revenue		(138,112	)
ROU lease liability		(1,612,412	)
Other liabilities		(35,417	)
Total net assets sold		1,419,587
Gain on sale of CAKE Business	$	19,473,080

NOTE 8: COMMITMENTS AND CONTINGENCIES

On June 20, 2019, the Company entered into a Lease Agreement with Emerging Growth, LLC for the lease of office space in Whitefish, Montana, for a period of one year at a rate of $1,500 per month. Management has elected a policy to exclude leases with an initial term of 12 months or less from the balance sheet presentation required under ASC 842. As a result, the office lease has been excluded from balance sheet presentation as it has an original term of 12 months or less.

The Company ~~generally recognizes its share-based payment over~~leases office space in Santa Monica, California, under a short-term lease expiring on July 31, 2019 for $1,000 per month. The Company has renewed the ~~vesting~~ terms of the ~~underlying options.~~

Three-month periods ended
March 31,

2019

2018

Weighted-average grant date fair value
$ 0.39 $ 0.40
Fair value of options, recognized as selling, general, and administrative expenses
$ 6,578 $ 8,303
Number of options granted
- -
Number of options expired or forfeited
(102,500
)
(45,000
)

Aslease for a period of ~~March~~one year through July 31, ~~2019 and December 31, 2018, there were 7,130,000 and 8,257,500 options, respectively, issued and outstanding with a weighted average price of $0.39.~~

~~The total compensation cost related to non-vested awards not yet recognized amounted to $2,095 at March 31, 2019 and the Company expects that it will be recognized over the following 18 months.~~

~~NOTE 7: COMPREHENSIVE LOSS~~

Comprehensive loss includes changes in equity related to foreign currency translation adjustments. The following table sets forth the reconciliation from net loss to comprehensive loss for the three-month periods ended March 31, 2019 and 2018:

Three-month periods ended
March 31,

2019

2018

Net loss
$ (1,013,637
)
$ (1,256,459
)
Other comprehensive loss:

Foreign currency translation adjustment
2,931 17,630
Comprehensive loss
$ (1,010,706
)
$ (1,238,829
)

~~The following table sets forth the balance in accumulated other comprehensive loss as of March 31, 2019 and December 31, 2018, respectively:~~

March 31,
2019

December 31,
2018

Accumulated other comprehensive loss
$ (74,424
)
$ (77,355
)

~~NOTE 8: SEGMENTS~~

~~The Company operates in one business segment. Percentages of sales by geographic region for the three-month periods ended March 31, 2019 and 2018 were approximately as follows:~~

Three-month periods ended
March 31,

2019

2018

United States
63% 60%
Europe
13% 20%
Other
24% 20%

~~NOTE 9: COMMITMENTS AND CONTINGENCIES~~2020.

During August 2017, the Company entered into an amendment to its original January 2014 lease for certain office space in Newport Beach. Pursuant to the lease amendment, effective March 1, 2018, the premises shall be expanded to include an additional 1,332 usable square feet such that the premises shall consist of 11,728 usable square feet in the aggregate. In addition, pursuant to the terms of the lease amendment, the Company extended the term of the lease agreement until June 30, 2023. Commencing on March 1, 2018, the initial base rent for the premises will be $38,702 per month for the first year and increasing to $44,566 per month by the end of the term.

~~During October 2016,~~ This lease was transferred to Constellation upon the ~~Company amended its original May 2014 sublease and entered into a 21-month sublease in Newport Beach, effective June 1, 2016. The monthly base rent was approximately $4,100 through the end~~sale of the ~~sublease term, in February 2018. As of March 31, 2019,~~CAKE Business that closed on June 18, 2019. The Company has no further obligations under this ~~sublease has expired.~~lease.

During July 2014, the Company entered into a five-year lease for certain office space in a business center in London, England, which commenced on July 30, 2014. The base rent is GBP 89,667 (approximately $115,000) per year and the estimated service charges for the lease are GBP 45,658 (approximately $56,000) per year. This lease ~~expires during 2019~~expired on July 30, 2019. The Company has discontinued its operations associated with the CAKE Business it conducted at the Subsidiary in London and ~~thus is not affected by ASC 842.~~has vacated the office upon the expiration of the lease.

Legal Proceedings

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. The Company is not presently a party to any legal proceedings that it currently believes, if determined adversely to the Company, would individually or taken together have a material adverse effect on the Company’s business, operating results, financial condition or cash flows.

NOTE ~~10:~~9: SUBSEQUENT EVENTS

~~On May 1,~~Effective October 22, 2019, the Company ~~entered into~~filed a ~~sixth~~certificate of amendment with the Secretary of State of the ~~Beedie Credit Agreement to, among other things, borrow the fourth tranche~~State of the term loan facility in the amount of $400,000 and to grant a waiver of two events of default relating to breaches of the Company’s minimum liquidity and secured debt covenants under the Beedie Credit Agreement.

On May 2, 2019, the Company entered into a payment deferral agreement with respect to the SaaS Capital Loan to, among other things, defer a portion of the Company’s January, February, March, April and May 2019 principal payments until the earlier of May 30, 2019 or payment of the SaaS Capital Loan in full and to grant a waiver of two events of default relating to breaches of the Company’s minimum liquidity and secured debt covenants under the SaaS Capital Loan.

~~On May 15, 2019, the Company entered into an asset purchase agreement, or the Asset Purchase Agreement, with CAKE Software, Inc., a~~ Delaware ~~corporation and a subsidiary of Constellation Software Inc., an Ontario, Canada corporation (TSX: CSU), or Constellation,~~ pursuant to which the ~~Company has agreed~~corporate name was changed from Accelerize Inc. to ~~sell substantially all~~CFN Enterprises Inc. In connection with the name change, the trading symbol of ~~the assets associated with its CAKE and Journey by CAKE business, or the Business, to Constellation for a base purchase price of $19,400,000 plus or minus an estimated closing date adjustment based~~CFN Enterprises Inc. on the ~~net tangible assets of~~OTCQB was changed from ALCZ to CNFN with the ~~Business at the closing, a holdback of $500,000 adjusted pursuant to the terms of the Asset Purchase Agreement and payable~~symbol change effective on the first anniversary of the closing date, and a three year earnout equal to 30% of the amount that the annual net revenue of the Business exceeds $13,750,000 and payable within 120 days on each of the first, second and third end of month anniversaries of the closing date.October 24, 2019.

Under the Asset Purchase Agreement, Constellation will acquire all of the assets used by the Company in the Business and will assume the Company’s post-closing obligations under certain vendor, customer and other commercial contracts related to the Business, including the Company’s lease for its headquarters in Newport Beach, California and its Subsidiary’s office in the United Kingdom. The Company’s cash and cash equivalents, and the assets associated with its Accelerize trademark, are excluded from the sale of the Business. Constellation will offer employment to certain of the Company’s employees following the closing date.

Under the Asset Purchase Agreement, the consummation of the sale of the Business is subject to satisfaction or waiver of certain closing conditions, including the approval of the sale of the Business by the Company’s stockholders, the payment of the outstanding principal amount of indebtedness due to Beedie and SaaS Capital and the release of their security interest in the assets related to the Business, the accuracy in material respects of the parties’ representations and warranties and material compliance with covenants, the absence of any legal process that prevents or adversely affects the sale of the Business and the delivery of certain other agreements and consents. The Company and its Chief Executive Officer have agreed not to compete with the Business for a period of five years from the closing date and not to solicit from the Business employees, customers, vendors and others with a business relationship with the Business for a period of two years.

The Asset Purchase Agreement prohibits the Company and its directors, officers, employees and other representatives from soliciting or facilitating an alternative proposal for the acquisition of the Business, however, such parties may engage in discussions pursuant to unsolicited third party offers to the extent necessary to satisfy their fiduciary obligations to the Company’s stockholders, subject to notice to Constellation of such discussions. The Asset Purchase Agreement may be terminated under certain circumstances including mutual agreement of the parties, the material breach of the agreement by a party, or to the extent the closing has not occurred by June 30, 2019, subject to extension related to the approval of the sale of the Business by the Company’s stockholders. In the event that the Asset Purchase Agreement is terminated as a result of a superior offer, or the breach of certain closing conditions, the party responsible for the termination will be required to pay damages in the amount of $1,000,000 to the other. In the event that the Asset Purchase Agreement is terminated as a result of the failure of the Company’s stockholders to approve the sale of the Business, the Company will pay to Constellation damages in the amount of $194,000.

The Company intends to use the proceeds from the sale of the Business to pay the outstanding principal amount of indebtedness due to Beedie and SaaS Capital, to repay the outstanding principal amount of indebtedness due to certain of the 2018 Lenders and August 2018 Lenders, to pay transaction expenses, and for general corporate purposes.

On May 15, 2019, the Company entered into an asset purchase agreement, or the Emerging Growth Agreement, with Emerging Growth LLC, or the Seller, pursuant to which the Company will acquire certain assets from the Seller related to its sponsored content and marketing business for a purchase price consideration consisting of $420,000 in cash, 30,000,000 shares of the Company’s common stock and preferred stock of a class to be created, with an aggregate stated value of $3,000,000, which will bear interest at 6% per annum and be convertible into the Company’s common stock at a conversion price to be mutually agreed in the future, without voting rights or a liquidation preference except with respect to default interest. The securities to be issued will be issued pursuant to an exemption under Section 4(a)(2) of the Securities Act of 1933, as amended, or the Securities Act. The Emerging Growth Agreement is subject to satisfaction or waiver of certain closing conditions, including the closing of the sale of the Business under the Asset Purchase Agreement with Constellation and the delivery of certain other agreements and consents. The closing of the Emerging Growth Agreement is expected to occur contemporaneously with the closing of the Asset Purchase Agreement with Constellation.

On May 15, 2019, the Company entered into amendments of the 2018 Promissory Notes and the August 2018 Promissory Notes with 13 of the 2018 Lenders and the August 2018 Lenders, respectively, holding an aggregate principal balance of $2,450,000 to revise the terms of prepayment of the 2018 Promissory Notes and the August 2018 Promissory Notes such that upon prepayment in full, instead of paying two years of accrued but unpaid interest, the Company shall issue to each such 2018 Lender or August 2018 Lender one share of the Company’s common stock for each dollar of original principal under its 2018 Promissory Note or August 2018 Promissory Note. In addition, on May 15, 2019 the Company entered into an exchange agreement with the remaining 2018 Lenders and August 2018 Lenders, whereby an aggregate of $500,000 of principal under the 2018 Promissory Notes and the August 2018 Promissory Notes will be cancelled and exchanged for 50,000 shares of preferred stock of a class to be created, with a stated value per share of $1,000 which will bear interest at 12% per annum, be convertible into the Company’s common stock at the election of the holder at a conversion price per share of common stock equal to the ten day volume weighted average price per share immediately prior to conversion, and be redeemable at the Company’s option following the third year after issuance, without voting rights or a liquidation preference. The 2018 Lenders and August 2018 Lenders holding the remaining aggregate principal balance of $550,000 of 2018 Promissory Notes and the August 2018 Promissory Notes will cancel their existing notes and be issued new promissory notes substantially similar to the 2018 Promissory Notes and the August 2018 Promissory Notes but with the amended prepayment provision described above. The securities to be issued will be issued pursuant to an exemption under Section 4(a)(2) of the Securities Act. The foregoing amendments and exchanges are expected to occur contemporaneously with the closing of the Asset Purchase Agreement with Constellation.

On May 15, 2019, the Company entered into a seventh amendment of the Beedie Credit Agreement to, among other things, provide that upon the closing of the Asset Purchase Agreement with Constellation, the Company will pay to Beedie the outstanding principal balance and accrued but unpaid interest due under the Beedie Credit Agreement, Beedie will release its liens related to the Business, Beedie’s warrants to purchase an aggregate of 7,935,000 shares of the Company’s common stock will be cancelled, and fees payable under the terms of the Beedie Credit Agreement in the aggregate amount of $1,015,861.69 will be payable to Beedie from the holdback and earnout payments payable by Constellation under the Asset Purchase Agreement.

On May 15, 2019, the Company entered into a consent letter, agreement and waiver of the SaaS Capital Loan to, among other things, provide that upon the closing of the Asset Purchase Agreement with Constellation, the Company will pay to SaaS Capital the outstanding principal balance and accrued but unpaid interest due under the SaaS Capital Loan plus $250,000 in fees, SaaS Capital will release its liens related to the Business, SaaS Capital’s warrants to purchase an aggregate of 1,733,333 shares of the Company’s common stock will be cancelled, and fees payable under the terms of the SaaS Capital Loan in the aggregate amount of $495,185.84 will be payable to SaaS Capital from the holdback and earnout payments payable by Constellation under the Asset Purchase Agreement.

	Three Months Ended March 31,				%
	2019		2018		Change

License	$	4,182,285	$	4,650,688		-10.1	%
Overage		455,711		1,075,618		-57.6	%
Other		187,826		266,442		-29.5	%
Total	$	4,825,822	$	5,992,748		-19.5	%

	March 31, 2019			December 31, 2018
	Unaudited
ASSETS

Current Assets:
Cash	$	544,346		$	27,295
Restricted cash		50,000			50,000
Accounts receivable, net of allowance for bad debt of $281,688 and $245,736, respectively		2,232,745			2,081,551
Prepaid expenses and other assets		165,658			254,760
Total current assets		2,992,749			2,413,606

Property and equipment, net of accumulated depreciation of $787,718 and $783,275, respectively		42,130			52,035
Operating lease right-of-use asset		1,503,669			-
Other assets		109,766			108,211
Total assets	$	4,648,314		$	2,573,852

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:
Accounts payable and accrued expenses	$	4,112,359		$	3,018,394
Deferred revenues		239,029			443,650
Credit facility, short term		2,902,259			3,399,240
Operating lease liability, short-term		296,461			-
Total current liabilities		7,550,108			6,861,284
Credit facility, net of unamortized deferred financing cost of $1,441,763 and $1,522,740, respectively		6,668,493			5,888,155
Other loan, related party net of unamortized deferred financing cost of $146,420 and $163,314, respectively		403,580			386,686
Other long-term loan, net of unamortized deferred financing cost of $608,991 and $676,598, respectively		2,341,009			2,273,402
Operating lease liability, long-term		1,362,750			-
Other liabilities		531,250			637,500
Total liabilities		18,857,190			16,047,027

Stockholders' Deficit:
Series A Preferred stock; $0.001 par value; 54,000 shares authorized; None issued and outstanding.		-			-
Series B Preferred stock; $0.001 par value; 1,946,000 shares authorized; None issued and outstanding.		-			-
Common stock; $0.001 par value; 500,000,000 shares authorized; 66,179,709 and 66,179,709 shares issued and outstanding, respectively		66,179			66,179
Additional paid-in capital		29,773,130			29,498,125
Accumulated deficit		(43,973,761	)		(42,960,124	)
Accumulated other comprehensive loss		(74,424	)		(77,355	)

Total stockholders’ deficit		(14,208,876	)		(13,473,175	)

Total liabilities and stockholders’ deficit	$	4,648,314		$	2,573,852

	Three-month periods ended March 31,
	2019			2018

Revenues:	$	4,825,822		$	5,992,748
Cost of revenue		1,829,373			2,353,860
Gross profit		2,996,449			3,638,888

Operating expenses:
Research and development		779,248			1,122,623
Sales and marketing		856,439			1,170,484
General and administrative		1,649,282			1,999,886
Total operating expenses		3,284,969			4,292,993

Operating loss		(288,520	)		(654,105	)

Other income (expense):
Other income		56			761
Other expense		(725,173	)		(603,115	)
Total other expenses		(725,117	)		(602,354	)

Net loss	$	(1,013,637	)	$	(1,256,459	)


Net loss per share:
Basic	$	(0.02	)	$	(0.02	)
Diluted	$	(0.02	)	$	(0.02	)

Basic weighted average common shares outstanding		66,179,709			65,939,709
Diluted weighted average common shares outstanding		66,179,709			65,939,709

	Common Stock				Additional Paid-in		Accumulated			Accumulated Other Comprehensive			Total Stockholders'
	Shares		Amount		Capital		Deficit			Income			Deficit

Balance, December 31, 2017		65,939,709	$	65,938	$	26,301,747	$	(31,542,684	)	$	(41,540	)	$	(5,216,538	)
Fair value of options and restricted stock awards		-		-		38,303		-			-			38,303
Fair value of warrants		-		-		61,050		-			-			61,050
Fair value of warrants issued in connection with promissory notes		-		-		1,156,695		-			-			1,156,695
Net loss		-		-		-		(1,256,459	)		-			(1,256,459	)
Foreign currency translation		-		-		-		-			17,630			17,630
Balance, March 31, 2018		65,939,709	$	65,938	$	27,557,795	$	(32,799,143	)	$	(23,910	)	$	(5,199,320	)

															Nine Months Ended September 30, 2019
																																Accumulated
																											Additional					Other
															Series A Preferred Stock				Series B Preferred Stock				Common Stock				Paid-in		Accumulated			Comprehensive
															Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Income			Total
Balance, December 31, 2018	66,179,709	$	66,179	$	29,498,125	$	(42,960,124	)	$	(77,355	)	$	(13,473,175	)		-	$	-		-	$	-		66,179,709	$	66,179	$	29,498,125	$	(42,960,124	)	$	(77,355	)	$	(13,473,175	)

Fair value of options and restricted stock awards	-		-		36,578		-			-			36,578			-		-		-		-		-		-		70,963		-			-			70,963
Fair value of warrants	-		-		89,119		-			-			89,119			-		-		-		-		-		-		126,810		-			-			126,810
Fair value of warrants issued in connection with loan	-		-		44,670		-			-			44,670
Fair value of warrants repricing adjustment	-		-		104,638		-			-			104,638
Net loss	-		-		-		(1,013,637	)		-			(1,013,637	)
Fair value of warrants issued with promissory notes																-		-		-		-		-		-		62,294		-			-			62,294
Fair value of repricing adjustment																-		-		-		-		-		-		104,638		-			-			104,638
Conversion of debt into Series A Preferred Stock																500		1		-		-		-		-		499,999		-			-			500,000
Issuance of Series B Preferred Stock for acquisition of CFN																-		-		3,000		3		-		-		686,997		-			-			687,000
Issuance of common stock for acquistion of CFN																-		-		-		-		30,000,000		30,000		2,670,000		-			-			2,700,000
Issuance of common stock as payment of interest																-		-		-		-		3,500,000		3,500		311,500		-			-			315,000
Preferred stock interest																-		-		-		-		-		-		-		(66,575	)		-			(66,575	)
Net income																-		-		-		-		-		-		-		13,190,273			-			13,190,273
Foreign currency translation	-		-		-		-			2,931			2,931			-		-		-		-		-		-		-		-			(9,568	)		(9,568	)
Balance, March 31, 2019	66,179,709	$	66,179	$	29,773,130	$	(43,973,761	)	$	(74,424	)	$	(14,208,876	)
Balance, September 30, 2019																500	$	1		3,000	$	3		99,679,709	$	99,679	$	34,031,326	$	(29,836,426	)	$	(86,923	)	$	4,207,660

	March 31, 2019		December 31, 2018
Operating lease right-of-use asset, January 1, 2019	$	1,569,100	$	-
Operating lease right-of-use asset, amortization		65,431		-
Operating lease right-of-use asset, March 31, 2019	$	1,503,669	$	-

Operating lease liability, January 1, 2019	$	1,725,375	$	-
Operating lease liability, amortization		66,164		-
Operating lease liability, March 31, 2019 (1)	$	1,659,211	$	-

	Lease Payments
Remainder of 2019	$	358,877
2020	$	490,230
2021	$	504,304
2022	$	518,378
2023	$	265,053

	March 31, 2019			December 31, 2018
SaaS Capital Loan, Total advances	$	10,253,000		$	10,253,000
Principal Payment of SaaS Capital Loan		(5,802,865	)		(5,442,865	)
Less: Deferred financing cost		(50,084	)		(100,867	)
Less: SaaS Capital Loan, short term		(2,902,259	)		(3,399,240	)
Balance	$	1,497,792		$	1,310,028

	March 31, 2019		December 31, 2018
2017 Promissory Notes, Total	$	-	$	1,000,000
Principal Payment of 2017 Promissory Notes		-		(1,000,000
2017 Promissory Notes, Outstanding balance		-		-
Less: Deferred financing cost		-		-
Less: 2017 Promissory Notes, short term		-		-
Balance	$	-	$	-

	March 31, 2019			December 31, 2018
Total advances	$	6,500,000		$	6,000,000
Deferred interest reclassed to principal		62,379			-
Principal Payment of Loan		-			-
Less: Deferred financing cost		(1,391,678	)		(1,421,873	)
Balance	$	5,170,701		$	4,578,127

	Three-month periods ended
	March 31,
	2019		2018

Amortization expense associated with the credit facility and loan	$	314,787	$	202,898
Interest expense associated with the credit facility and loan	$	407,074	$	373,257
Other finance fees associated with the credit facility and loan	$	5,609	$	28,655

	Ending balance at March 31,				Average balance during three months ended March 31,
	2019		2018		2019		2018
Cash	$	544,346	$	805,880	$	285,821	$	486,382
Restricted cash		50,000		50,000		50,000		50,000
Accounts receivable		2,232,745		2,856,152		2,462,691		2,774,394
Accounts payable and accrued expenses		4,112,359		2,242,116		3,565,377		2,360,600
Short term credit facility, net of deferred financing cost		2,902,259		3,243,367		3,150,750		3,149,590
Short term loan, net of deferred financing cost		-		-		-		612,097
Credit facility, net of deferred financing cost		6,668,493		6,841,709		6,278,324		5,622,349
Other loan, related party net of deferred financing cost		403,580		-		395,133		-
Other loan, net of deferred financing cost		2,341,009		-		2,307,206		133,969
Long term other liabilities		531,250		956,250		584,375		1,009,375

	Nine Months Ended
	September 30,			September 30,
	2019			2018
Cash flows used in operating activities	$	(6,153,982	)	$	(2,769,540	)
Cash flows provided by (used in) investing activities	$	20,470,916		$	(1,155,829	)
Cash flows provided by (used in) financing activities	$	(13,407,514	)	$	5,587,198

~~2.1~~ 3.1	Asset Purchase Agreement, dated May 15, 2019, by and between Accelerize Inc. and CAKE Software Inc.; Composite Copy of Certificate of Incorporation, as amended as of October 22, 2019.

~~2.2~~ 3.2	~~Asset Purchase Agreement, dated May 15,~~Composite Copy of Certificate of Incorporation, as amended as of October 22, 2019 between Emerging Growth LLC and Accelerize Inc.;(marked copy).

4.1	Form of Warrant issued on September 12, 2019 (incorporated by reference to the Company’s Current Report on Form 8-K filed on September 18, 2019).

10.1	~~Fourth Amending Agreement between Accelerize Inc. and Beedie Investments Limited, dated as~~Form of ~~January 23,~~Promissory Note issued on September 12, 2019 (incorporated by reference to the Company’s ~~Annual~~Current Report on Form ~~10-K~~8-K filed on ~~April 16,~~September 18, 2019).

10.2	~~Tenth Amendment to Loan and Security~~Employment Agreement between Accelerize Inc. and ~~SaaS Capital Funding II, LLC,~~Frank Lane, dated ~~as of January 23,~~June 21, 2019 (incorporated by reference to the Company’s ~~Annual~~Current Report on Form ~~10-K~~8-K filed on ~~April 16,~~September 19, 2019).

~~10.3~~	Fifth Amending Agreement between Accelerize Inc. and Beedie Investments Limited, dated as of March 1, 2019 (incorporated by reference to the Company’s Annual Report on Form 10-K filed on April 16, 2019).

~~10.4~~	Payment Deferral Agreement between Accelerize Inc. and Saas Captial Funding II, LLC, dated as of March 1, 2019 (incorporated by reference to the Company’s Annual Report on Form 10-K filed on April 16, 2019).

~~10.5~~	Sixth Amending Agreement between Accelerize Inc. and Beedie Investments Limited, dated as of May 1, 2019.*

~~10.6~~	Payment Deferral Agreement between Accelerize Inc. and Saas Captial Funding II, LLC, dated as of May 2, 2019.*

~~10.7~~	Form of Amendment to Promissory Note.*

~~10.8~~	Form of Exchange Agreement.*

~~10.9~~	Seventh Amending Agreement between Accelerize Inc. and Beedie Investments Limited, dated as of May 15, 2019.*

~~10.10~~	Consent Letter, Agreement and Waiver between Accelerize Inc. and SaaS Capital Funding II, LLC, dated as of May 15, 2019.*

31.1	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rule 13a-14(a) and15d-14(a).*

32.1	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. 1350.**

101.	The following materials from the Company's Quarterly Report on Form 10-Q for the quarter ended ~~March 31,~~September 30, 2019, formatted in XBRL (eXtensible Business Reporting Language): (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Comprehensive Loss, (iv) the Statements of Changes in Stockholders’ Deficit, (v) the Statements of Cash Flows, and (vi) related notes to these financial statements.*

*	Filed herewith.
**	Furnished herewith.
~~***~~	Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The registrant undertakes to furnish on a supplemental basis a copy of any omitted schedules to the Securities and Exchange Commission upon request.

	~~ACCELERIZE~~CFN ENTERPRISES INC.

Dated: ~~May 20,~~November 6, 2019	By:	/s/ Brian Ross
		Brian Ross President and Chief Executive Officer (Principal Executive Officer and Principal ~~Financial~~ Financial Officer)