ACCELERIZE NEW MEDIA INC (Form: 10-K, Received: 03/29/2012 16:06:18)

EXHIBIT NO.	DESCRIPTION

3.1	Certificate of Incorporation dated November 22, 2005, as amended by Certificate of Designation dated August 8, 2006 (incorporated by reference to the Company’s Registration Statement on Form SB-2 (file no. 333-139586) filed on December 22, 2006.)

3.2	Certificate of Designation of 10% Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form SB-2 (file no. 333-139586) filed on December 22, 2006.)

3.3	Certificate of Designation of 8% Series B Convertible Preferred Stock (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-QSB for the quarter ended June 30, 2007.)

3.4	By-laws of the Company (incorporated by reference to the Company’s Registration Statement on Form SB-2 (file no. 333-139586) filed on December 22, 2006.)

3.5**	Certificate of Amendment to the Certificate of Designation of 8% Series B Convertible Preferred Stock.

4.1	Form of Common Stock Certificate (incorporated by reference to the Company’s Registration Statement on Form SB-2 (file no. 333-139586) filed on December 22, 2006.)

4.2	Form of Preferred Stock Certificate (incorporated by reference to the Company’s Registration Statement on Form SB-2 (file no. 333-139586) filed on December 22, 2006.)

4.3	Form of Common Stock Purchase Warrant for 10% Series A Convertible Preferred Stock (incorporated by reference to the Company’s Registration Statement on Form SB-2 (file no. 333-139586) filed on December 22, 2006.)

4.4	Form of Common Stock Purchase Warrant for 8% Series B Convertible Preferred Stock (incorporated by reference to the Company’s Quarterly Report on Form 10-QSB filed on August 13, 2007.)

4.5	Warrant to Purchase Stock issued August 23, 2011 (incorporated by reference to the Company's Quarterly Report on Form 10-Q (file no. 000-52635) filed on October 28, 2011)

4.6	Warrant to Purchase Stock issued September 12, 2011 (incorporated by reference to the Company's Quarterly Report on Form 10-Q (file no. 000-52635) filed on October 28, 2011).

10.1*	Employment Agreement of Brian Ross (incorporated by reference to the Company’s Registration Statement on Form SB-2 (file no. 333-139586) filed on December 22, 2006.) as amended by Amendment No.1 to Employment Agreement of Brian Ross, dated January 1, 2010 (incorporated by reference to the Company's Annual Report on Form 10-K (file no. 000-52635) filed on March 26, 2010).

10.2*	Employment Agreement of Damon Stein (incorporated by reference to Amendment No.1 to the Company’s Registration Statement on Form SB-2 (file no. 333-139586) filed on January 31, 2007) as amended by Amendment No.1 to Employment Agreement of Damon Stein, dated January 1, 2010 (incorporated by reference to the Company's Annual Report on Form 10-K (file no. 000-52635) filed on March 26, 2010).

10.3*	Employment Agreement of Jeff McCollum (incorporated by reference to the Company's Current Report on Form 8-K (file no. 000-52635) filed on March 19, 2009.)

10.4*	Employment Agreement of Thomas John Gabriele, dated January 1, 2011 (incorporated by reference to the Company's Current Report on Form 8-K (file no. 000-52635) filed on January 10, 2011).

10.5*	Accelerize New Media, Inc. Stock Option Plan (incorporated by reference to the Company’s Registration Statement on Form SB-2 (file no. 333-139586) filed on December 22, 2006.)

10.6*	Form of Stock Option Agreement (incorporated by reference to the Company’s Registration Statement on Form SB-2 (file no. 333-139586) filed on December 22, 2006.)

10.7	Form of Promissory Note (incorporated by reference to the Company’s Registration Statement on Form SB-2 (file no. 333-139586) filed on April 30, 2007.)

10.8	Form of Note Conversion Agreement (incorporated by reference to the Company’s Current Report on Form 8-K furnished on September 7, 2007.)

10.9	Form of First Convertible Promissory Note (incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 (file no. 000-52635) filed on March 31, 2008.) as amended by Amendment No. 1 (incorporated by reference to the Company's Current Report on Form 8-K (file no. 000-52635) filed on May 29, 2009).

10.10	Form of Warrant issued to First Convertible Promissory Note holders (incorporated by reference to the Company Current Report on Form 8-K (file no. 000-52635) filed on May 5, 2008.)

10.11	Form of Second Convertible Promissory Note (incorporated by reference to the Company’s Current Report on Form 8-K (file no. 000-52635) filed on March 26, 2009.) as amended by Amendment No. 1 (incorporated by reference to the Company's Current Report on Form 8-K (file no. 000-52635) filed on May 29, 2009).

10.12	Form of Warrant issued to Second Convertible Promissory Note holders (incorporated by reference to the Company’s Current Report on Form 8-K (file no. 000-52635) filed on March 26, 2009).

10.13	Form of Subscription Agreement (incorporated by reference as exhibit 4.1 to the Company's Current Report on Form 8-K (file no. 000-52635) filed on May 6, 2010).

10.14	Form of Common Stock Purchase Warrant (incorporated by reference to the Company's Current Report on Form 8-K (file no. 000-52635) filed on May 6, 2010).

10.15	Form of Subscription Agreement (incorporated by reference to the Company's Current Report on Form 8-K (file no. 000-52635) filed on October 22, 2010).

10.16	Form of Common Stock Purchase Warrant (incorporated by reference to the Company's Current Report on Form 8-K (file no. 000-52635) filed on October 22, 2010).

10.17	Common Stock Purchase Warrant (incorporated by reference to the Company's Current Report on Form 8-K (file no. 000-52635) filed on January 7, 2011).

10.18	Intellectual Property Security Agreement (incorporated by reference to the Company's Current Report on Form 8-K (file no. 000-52635) filed on January 7, 2011).

10.19	Form of Subordination Agreement Common Stock Purchase Warrant (incorporated by reference to the Company's Current Report on Form 8-K (file no. 000-52635) filed on January 7, 2011).

10.20	Loan Agreement dated January 3, 2011, between the Company and Agility Capital II, LLC (portions of this exhibit have been omitted pursuant to a grant of confidential treatment) (incorporated by reference to the Company's Annual Report on Form 10-K/A (file no. 000-52635) filed on March 8, 2012).

10.21*	Amendment No. 1 to Accelerize New Media, Inc. Stock Option Plan (incorporated by reference to the Company's Quarterly Report on Form 10-Q (file no. 000-52635) filed on May 10, 2011).

10.22*	Amendment No. 2 to Accelerize New Media, Inc. Stock Option Plan (incorporated by reference to the Company's Quarterly Report on Form 10-Q (file no. 000-52635) filed on May 10, 2011).

10.23	Standard Multi-Tenant Office Lease-Gross, dated July 20, 2011, between 2244 West Coast Highway LLC and Accelerize New Media, Inc. (incorporated by reference to the Company's Quarterly Report on Form 10-Q (file no. 000-52635) filed on August 9, 2011).

10.24	First Amendment to Loan Agreement, dated August 23, 2011, between Accelerize New Media, Inc. and Agility Capital II, LLC (incorporated by reference to the Company's Quarterly Report on Form 10-Q (file no. 000-52635) filed on October 28, 2011).

10.25, *	Amendment No. 3 to Accelerize New Media, Inc. Stock Option Plan.

23.1**	Consent of Sherb & Co., LLP.

31.1**	Rule 13a-14(a) Certification.

31.2**	Rule 13a-14(a) Certification.

32.1***	Certification pursuant to 18 U.S.C. Section 1350.

101.1***	The following materials from the Company's Annual Report on Form 10-K for the year ended December 31, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i) the Balance Sheets, (ii) the Statements of Operations, (ii) the Statements of Cash Flows, and (iv) related notes to these financial statements, tagged as blocks of text.

ACCELERIZE NEW MEDIA, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 1: ORGANIZATION, DESCRIPTION OF BUSINESS AND GOING CONCERN:

Accelerize New Media, Inc. , or the Company, a Delaware corporation, incorporated in November 2005, is an online-based media and customer acquisition solutions provider.

The Company offers a comprehensive online media solution for clients to reach their target audience on the Internet. The Company provides multifaceted online marketing services specializing in the development of performance based marketing programs and related software solutions for businesses interested in expanding their online advertising presence. In February 2011, the Company decided to allocate more resources to its software solutions, discontinued its lead generation business and disposed of this segment to a third-party for an up-front consideration of $20,000 and a percentage of future revenues that might be generated by the third-party through February 2012.

The accompanying financial statements have been prepared on a going concern basis. The Company has used net cash in its operating activities of approximately $644,000 during 2011. The Company's ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, to fund possible future acquisitions, and to generate profitable operations in the future. Management plans may continue to provide for its capital requirements by issuing additional equity securities and debt. The outcome of these matters cannot be predicted at this time and there are no assurances that if achieved, the Company will have sufficient funds to execute its business plan or generate positive operating results.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of 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 recovery of assets from discontinued operations and assumptions used in Black-Scholes valuation methods, such as expected volatility, risk-free interest rate, and expected dividend rate.

Reclassification

The financial statements for 2010 have been reclassified to reflect the Company’s discontinued operations and the Company’s research and development expenses, which were previously included in selling, general, and administrative expenses.

Loss from Continuing Operations

The loss from continuing operations was $1,218,934 and $ 1,325,696 during 2011 and 2010, respectively. Revenues were $ 3,463,067 and $ 1,456,242 for 2011 and 2010, respectively. Operating expenses were $4,341,182 and $ 2,652,549 for 2011 and 2010, respectively. Interest expense was $ 316,939 and $129,389 during 2011 and 2010, respectively. Unrealized loss on marketable securities held for sale amounted to $23,880 during 2011.

F-7

Net Income from Discontinued Operations

Net income from discontinued operations amounted to $41,839 and $568,805 during 2011 and 2010, respectively. The net income from discontinued operations during 2011 and 2010, consists of revenue from discontinued operations of $140,144 and $2,247,311, respectively, operating expenses of $134,926 and $1,678,443, respectively, and gain from the disposal of discontinued operations of $36,621 and $0, respectively. During 2011 and 2010, the Company wrote down its goodwill by $38,000 and $25,000, respectively, which is included in the net income from discontinued operations.

Assets and Liabilities from Discontinued Operations

Comparative balance sheets of the discontinued operations are as follows:

	December 31, 2011		December 31, 2010
Accounts receivable, net	$	-	$	56,246
Property and equipment, net		-		2,367
Goodwill		-		38,000
Total assets	$	-	$	96,613

Accounts payable	$	-	$	39,910
Deferred revenue		-		63,736
Total liabilities	$	-	$	103,646

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.

Accounts Receivable

The Company’s accounts receivable are due primarily from advertising, affiliate marketing, and lead generation companies. Collateral is generally 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. Based on this review, the Company specifically reserves for those accounts deemed uncollectible. When receivables are determined to be uncollectible, principal amounts of such receivables outstanding are deducted from the allowance. The allowance for doubtful accounts was $95,301 and $70,813 as of December 31, 2011 and 2010, respectively.

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 financial institutions and are insured by the Federal Deposit Insurance Corporation, or the FDIC, up to $250,000. During 2011, the Company has reached bank balances exceeding 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 institutions in which it holds deposits.

The Company's accounts receivable are due from a few customers, all located in the United States. None of the Company’s customers accounted for more than 10% of its accounts receivables at December 31, 2011. One of the Company’s customers accounted for 12% of its accounts receivable at December 31, 2010.

Revenue Recognition

The Company recognizes revenue on arrangements in accordance with ASC Topic 605-10-S99, Revenue Recognition-Overall-SEC Materials. Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and collectability of the resulting receivable is reasonably assured.

The Company’s Software-as-a-Service, or SaaS, revenues are generated from a set-up fee and monthly license fee, supplemented by per transaction fees that customers pay for platform usage.

The Company’s online marketing service revenues are generated from banner design and website development, targeted content creation and syndication, contact management solutions and banner ad sales via our portfolio of websites.

F-8

Effective February 2011, the Company discontinued its lead generation business.

Product Concentration

The Company generates its revenues from the following two activities: software licensing and online marketing services.

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.

Marketable securities consist of equity securities of a publicly-traded company. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy. The Company regarded the decline in fair value of its marketable securities to be “other than temporary,” accordingly the unrealized loss was recorded in the other expenses section in the Company’s Statements of Operations.

Additional Disclosures Regarding Fair Value Measurements

The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, note and convertible promissory notes payable approximate their fair value due to the short maturity of these items.

Convertible Instruments

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with ASC 815,Accounting for Derivative Instruments and Hedging Activities, or ASC 815.

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

F-9

The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with ASC 470-20, Debt with Conversion and Other Options. Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note.

ASC 815-40, Contracts in Entity’s own Equity, provides that, among other things, generally, if an event is not within the entity’s control, such contract could require net cash settlement and shall be classified as an asset or a liability.

The Company needs to determine whether the instruments issued in the transactions are considered indexed to the Company’s own stock. While the Company’s 12% convertible promissory notes or 12% Convertible Notes Payable and the warrants issued in connection with the 12% Note Payable did not provide variability involving sales volume, stock index, commodity price, revenue targets, among other things, they do provide for variability involving future equity offerings and issuance of equity-linked financial instruments. While the instruments did not contain an exercise contingency, the settlement of the 12% Convertible Notes Payable and the warrants issued in connection with the 12% Note Payable would not equal the difference between the fair value of a fixed number of shares of the Company’s Common Stock and a fixed stock price. Accordingly, they are not indexed to the Company’s stock price.

However, the Company believes that it has no derivative liabilities associated with such instruments at December 31, 2011 because the Company believes that it will not issue additional consideration, beyond those already granted, 1) to the holders of the 12% Convertible Notes Payable, a substantial number of which have converted their 12% Convertible Note Payable during the first quarter of 2012, 2) the likelihood that the Company will trigger the subsequent financing reset provision of the warrants issued in connection with the 12% Note Payable is more remote than possible, but certainly not probable.

Advertising

The Company expenses advertising costs as incurred. Advertising expense amounted to $180,235 and $172,291 during 2011 and 2010, respectively.

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.

Software Development Costs

Costs incurred in the research and development of software products are expensed as incurred until technological feasibility has been established. After technological feasibility is established, any additional costs are capitalized in accordance with ASC No. 985-30, Software-Research and Development. Costs of maintenance and customer support will be charged to expense when related revenue is recognized or when those costs are incurred, whichever occurs first. The Company believes that the current process for developing software is essentially completed concurrently with the establishment of technological feasibility; accordingly, no software development costs have been capitalized at December 31, 2011.

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 Black-Scholes-Merton, or BSM, 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.

F-10

Segment Reporting

The Company generates revenues from two sources: 1) SaaS, and 2) online marketing services. 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

Recent 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

Basic earnings per share are calculated by dividing income available to stockholders by the weighted-average number of shares of Common Stock outstanding during each period. Diluted earnings per share are computed using the weighted average number of shares of Common Stock and dilutive Common Stock share equivalents outstanding during the period. Dilutive Common Stock share equivalents consist of shares issuable upon the exercise of stock options and warrants (calculated using the modified-treasury stock method).

	December 31,			December 31,
	2011			2010
Numerator:
Net loss from continuing operations	$	(1,218,934	)	$	(1,325,696	)
Preferred stock dividends		(373,842	)		(407,176	)
Numerator for basic earnings per share- net loss from continuing operations attributable to common stockholders-as adjusted	$	(1,592,776	)	$	(1,732,872	)

Net income from discontinued operations	$	41,839		$	568,805

Denominator:
Denominator for basic earnings per share--weighted average shares		37,376,270			31,502,237
Effect of dilutive securities- for discontinued operations only:
Stock options		3,982,439			4,521,111
Warrants		1,352,204			3,703,774
Denominator for diluted earnings per share--adjusted weighted-average shares and assumed conversions		42,710,913			39,727,122

Earnings (loss) per share:
Basic
Continuing operations, as adjusted	$	(0.04	)	$	(0.06	)
Discontinued operations	$	0.00		$	0.01
Net earnings (loss) per share- basic	$	(0.04	)	$	(0.04	)

Diluted
Continuing operations, as adjusted	$	(0.04	)	$	(0.06	)
Discontinued operations	$	0.00		$	0.01
Net earnings(loss) per shares-diluted	$	(0.04	)	$	(0.04	)

F-11

The weighted-average anti-dilutive common share equivalents are as follows:

	Fiscal Year Ended
	December 31,
	2011		2010

Series A Preferred Stock		3,846,700		5,300,000
Series B Preferred Stock		11,662,500		11,662,500
Convertible notes payable		1,274,000		2,334,000
Options		9,030,000		7,085,000
Warrants		12,440,255		13,342,755
		38,253,455		39,724,255

The anti-dilutive common shares outstanding at December 31, 2011 and 2010 are as follows:

	2011		2010

Series A Preferred Stock		2,393,400		5,300,000
Series B Preferred Stock		11,662,500		11,662,500
Convertible notes payable		1,274,000		2,334,000
Options		9,030,000		7,085,000
Warrants		12,440,255		13,342,755
		36,800,155		39,724,255

Property and Equipment

Property and equipment are 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 expense as incurred. Significant renewals and betterments are capitalized.

Property and equipment consist of the following at:

	December 31, 2011			December 31, 2010
Computer equipment and software	$	45,537		$	26,667
Office furniture and equipment		33,030			2,091
		78,567			28,758
Accumulated depreciation		(20,878	)		(13,691	)
	$	57,689		$	15,067

During 2011, the Company wrote off certain assets that had been fully depreciated during the period amounting to approximately $9,000.

Depreciation expense amounted to $16,744 and $6,872 during 2011 and 2010, respectively.

NOTE 3: PREPAID EXPENSES

At December 31, 2011, the prepaid expenses consisted primarily of prepaid insurance and rent.

F-12

NOTE 4: WEBSITE DEVELOPMENT COSTS

Website development costs, net of accumulated amortization are as follows:

	December 31,		December 31,
	2011		2010
Website development costs	$	-	$	346,850
Less: accumulated amortization		-		(342,939	)
Website development costs, net	$	-	$	3,911

Amortization expense of the website development costs amounted to $3,911 and $69,130 during 2011 and 2010, respectively.

During 2011, the Company wrote off its website development costs of $346,850, which had been fully amortized during the period.

NOTE 5: GOODWILL

At December 31, 2010, the Company wrote-down the value of its goodwill. Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations. ASC 350-30-35-4 “Intangibles-Goodwill and Other” requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment for each reporting unit. The Company wrote-down $38,000 and $26,000 during 2011 and 2010, respectively. The $38,000 carrying value of goodwill was reclassified to discontinued operations in 2010.

NOTE 6: CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE

10% Convertible Notes Payable

The Company had 10% convertible promissory notes aggregating $530,000 outstanding at December 31, 2010. The 10% Convertible Notes Payable bore interest at 10% per annum. Accrued interest was payable, at the note holder’s option, in cash or in shares of Common Stock. If the accrued interest was paid in shares of Common Stock, the number of shares issuable to satisfy the accrued interest was based on the closing price, as quoted on the Over-the-Counter Bulletin Board, or OTCBB, of the trading day immediately prior to the interest payment date. The interest was payable commencing June 1, 2008 and every quarter thereafter, until the obligations under the 10% Convertible Notes Payable were satisfied. The 10% Convertible Notes Payable matured between March and June 2011.

On January 3, 2011, the Company converted the 10% Convertible Notes Payable with principal aggregating $530,000 into 1,325,000 shares of its Common Stock, at $0.40 per share. The fair value of the inducement to the holders of the 10% Convertible Notes Payable amounted to $159,000 and is included in interest expense in the accompanying statement of operations for 2011.

F-13

12% Convertible Notes Payable

The Company had 12% convertible promissory notes aggregating $637,000 outstanding at December 31, 2011 and 2010. The 12% Convertible Notes Payable bear interest at 12% per annum. Accrued interest may be payable, at the note holder’s option, in cash or in shares of Common Stock. If the accrued interest is paid in shares of Common Stock, the number of shares issuable to satisfy the accrued interest is primarily based on the closing price, as quoted on the OTCBB of the trading day immediately prior to the interest payment date. The interest payable commenced June 1, 2009 and is payable every quarter thereafter, until the obligations under the 12% Convertible Notes Payable are satisfied. The 12% Convertible Notes Payable mature ten days after the maturity date of the Company’s 12% note, or 12% Note. Effective May 29, 2009, on the maturity date, each holder has the option of having the 12% Convertible Notes Payable prepaid in cash or shares of Common Stock as follows: 1) if the average closing price of the Common Stock on the last five trading days prior to the maturity date is $0.50 or more, then the holder may elect to have the principal paid in shares of Common Stock. In such case, the number of shares of Common Stock to be issued to the holder shall be determined by dividing the principal amount outstanding on the maturity date by $0.50, or 2) if the average closing price of the Common Stock on the last five trading days prior to the maturity date is less than $0.50, then the principal may only be paid in cash. The Company may prepay the 12% Convertible Notes Payable without premium. Each note holder may convert, at his option, the outstanding principal of the 12% Convertible Notes Payable , after July 1, 2009 and prior to January 10, 2013 at the lesser of: 1) $0.40 or 2) the effective price per share of a subsequent financing of the Company occurring prior to the maturity date.

Note Payable

During 2011, the Company issued a note payable, aggregating $500,000. The 12% Note bears interest at a rate of 12% per annum and matures on March 31, 2012. Interest is payable monthly. Effective April 1, 2011 the Company made monthly principal payments of $20,000. In connection with issuance of the 12% Note, the Company granted warrants to the holder to purchase 283,019 shares of the Company’s Common Stock. The exercise price for the warrants was equal to the lower of (i) $0.53 per share, or (ii) the price per share at which the Company sells or issues its Common Stock after the issue date of the 12% Note in a transaction or series of transactions in which the Company receives at least $500,000. The exercise price of such warrants, adjusted for subsequent financing reset provision, may not have been less than $0.35 per share.

During August 2011, the Company modified the terms of the 12% Note by 1) extending the maturity to December 31, 2012, 2) increasing the amount borrowed under the 12% Note by an additional $100,000, 3) amending the payment schedule for principal payments from monthly commencing on April 1, 2011 to monthly commencing on January 1, 2012, 4) increasing the monthly principal payments to $30,000, 5) cancelling the initial warrants issued in January 2011, and 6) granting 600,000 warrants to the holder at an exercise price of $0.35 per share with an expiration date of August 23, 2016.

The Company accounted for the cancellation of the initial warrants in January 2011 and the grant of 600,000 warrants in August 2011, a modification of terms for the grants of 283,019 warrants issued in January 2011, and a new grant of 316,981 warrants. As a result of the grants and modification of warrants, the Company recognized as a beneficial conversion feature a debt discount of $141,257, which is reflected in the accompanying financial statements as additional paid-in capital and corresponding debt discount.

The interest and amortization expense associated with the Convertible Notes Payable and Note Payable amounted to $316,939 and $129,389 during 2011 and 2010, respectively.

F-14

NOTE 7: STOCKHOLDERS’ DEFICIT

Common Stock

A summary of the issuance of shares of Common Stock, related consideration and fair value of transaction, for 2010 is as follows:

	Number of Shares of Common Stock		Fair Value at Issuance		Fair Value at Issuance (per share)
Payment of Preferred Stock dividends		1,176,854	$	407,176	$	0.52-0.55
Payment of interest on 10% and 12%
Convertible Notes Payable		116,120	$	63,135	$	0.52-0.55
Conversion of Series A Preferred Stock into common stock		100,000	$	15,000	$	0.001
Cashless exercise of options		48,936	$	49	$	0.001
Exercise of stock options		444,580	$	66,687	$	0.15
Exercise of warrants		15,000	$	2,250	$	0.15
Private Placement, net of finder's fee of $70,460		2,028,750	$	741,040	$	0.37
Finder's fee paid in common stock		105,125	$	66,844	$	0.55-$0.73
Retired treasury stock		660,000	$	66,000	$	0.10
Repurchase of common stock		160,000	$	16,000	$	0.10

A summary of the issuance of shares of Common Stock, related consideration and fair value of transaction, for 2011 is as follows:

	Number of Shares of Common Stock		Fair Value at Issuance		Fair Value at Issuance (per share)
Payment of Preferred Stock dividends		1,187,390	$	373,842	$	0.35-0.45
Payment of interest on 10% and 12%
Convertible Notes Payable		24,391	$	8,535	$	0.35-0.45
Conversion of Series A Preferred Stock i nto common stock		2,906,666	$	391,228	$	0.001
Cashless exercise of warrants		375,428	$	375	$	0.001
Exercise of warrants		707,500	$	199,626	$	0.15-0.35
Repurchase of common stock		200,000	$	20,000	$	0.10
Conversion of 10% Notes Payable to Common Stock		1,325,000	$	530,000	$	0.40

Preferred Stock- Series A

Between August 2006 and October 2006 the Company issued 54,000 shares of 10% Series A Convertible Preferred Stock, or Series A Preferred Stock, with a par value of $0.001 per share, resulting in gross proceeds of $728,567 to the Company after financing fees of $81,433.

The holders of the Series A Preferred Stock are entitled to cumulative preferential dividends at the rate of 10% per annum, payable quarterly in arrears on each of September 1, December 1, March 1, and June 1, commencing on the first quarter after the issuance date beginning September 1, 2006 in cash or shares of the Company’s Common Stock. If the Company elects to pay any dividend in shares of Common Stock, the number of shares of Common Stock to be issued to each holder shall be an amount equal to the quotient of (i) the dividend payment divided by (ii) $0.15 per share.

F-15

The shares of Series A Preferred Stock include a liquidation preference corresponding to the amount invested. All issued or accrued but unpaid dividends may also be converted at the election of the holder, and converted at $0.15 per share. The shares of Series A Preferred Stock are convertible into shares of common stock, at any time, at the option of the holder and a conversion price of $0.15 per share, at an initial rate of conversion of 100 shares of common stock for each one share of Series A Preferred Stock, subject to anti-dilution provisions in the case of stock splits, dividends or if the Company issues shares of common stock or other securities convertible into shares of common stock at an effective price less than $0.15 per share. In the event a public market is established for the Company’s common stock, the 10% Series A Preferred Stock is subject to mandatory conversion by the Company upon a 30 day notice if the average closing price of its common stock is $0.40 or more per share for 10 consecutive trading days and the average daily volume is at least 100,000 shares. This has not occurred as of December 31, 2011.

During 2011, the Company issued 2,906,666 shares of its common stock pursuant to conversion of 29,067 shares of Series A Preferred Stock.

Preferred Stock- Series B

Between June 2007 and September 2007, the Company issued 118,875 shares of 8% Series B Convertible Preferred Stock, or Series B Preferred Stock, with a par value of $0.001 per share, which generated net proceeds of $3,244,563 to the Company, after financing fees of $516,063 and conversion of notes payable of $400,000.

The holders of the Series B Preferred Stock are entitled to cumulative preferential dividends at the rate of 8% per annum, payable quarterly in arrears on each of September 1, December 1, March 1, and June 1, commencing on December 1, 2007. If the Company elects to pay any dividend in shares of Common Stock, the number of shares of Common Stock to be issued to each holder shall be an amount equal to the higher of (i) the average of the closing bid prices for the common stock over the five trading days immediately prior to the dividend date or (ii) $0.35.

The shares of Series B Preferred Stock include a liquidation preference corresponding to the amount invested. All issued or accrued but unpaid dividends may also be converted at the election of the Holder, and converted at $0.35 per share. The shares of Series B Preferred Stock are convertible into shares of common stock, at any time, at the option of the holder and a conversion price of $0.35 per share, at an initial rate of conversion of 100 shares of common stock for each one share of Series B Preferred Stock, subject to anti-dilution provisions in the case of stock splits, dividends or if the Company issues shares of common stock or other securities convertible into shares of common stock at an effective price less than $0.35 per share. In the event a public market is established for the Company’s common stock, the Series B Preferred Stock is subject to mandatory conversion by the Company upon a 30 day notice if the average closing price of its common stock is $1.00 or more per share for 10 consecutive trading days. This has not occurred as of December 31, 2011.

The rights of the holders of the Series B Preferred Stock are subordinate to the rights of the holders of Series A Preferred Stock.

F-16

Warrants

The following is a summary of the Company’s activity related to its warrants between January 1, 2010 and December 31, 2011:

						Weighted
						Average
				Weighted		Remaining
				Average Price		Contractual
	Warrants			Per Share		Term
Balance, January 1, 2010		11,240,880		$	0.33
Granted		2,116,875			0.65
Exercised		(15,000	)		0.15
Forfeitures		-			-
Outstanding at December 31, 2010		13,342,755		$	0.38		3.13
Granted		600,000			0.35
Exercised		(1,502,500	)		0.29
Forfeitures		-			-
Outstanding and exercisable at December 31, 2011		12,440,255		$	0.46		2.40

With the exceptions of 2,086,875 warrants issued in connection with the Company’s issuance of its Common Stock during 2010, the fair value of the warrants granted or modified during 2011 and 2010 is based on the Black Scholes Model using the following assumptions:

	2011	2010
Effective Exercise price	$0.35-0.65	$0.65
Effective Market price	$0.35-0.65	0.65
Volatility	56%	56%
Risk-free interest	0.54-1.7%	0.54%
Terms	5 years	5 years
Expected dividend rate	0%	0%

The Company modified certain of its warrants during 2011 as follows:

During January 2011 the Company reduced the exercise price of the warrants issued in connection with both the 10% and 12% convertible notes payable from $0.55 to $0.40. The fair value of these warrant modifications amounted to $17,645, and was recorded as a interest expense and as an increase to additional paid-in capital.

During January 2011, in connection with the issuance of the 12% Note the Company issued warrants to purchase 283,019 shares of the Company’s Common Stock. The exercise price for the warrants were equal to the lower of (i) $0.53 or (ii) the price per share at which the Company sells or issues its capital stock during the period the warrants are outstanding in a transaction or series of transactions in which the Company receives at least $500,000, provided that such price per share shall in no case be less than $0.35. The warrants expire in January 2016.

During August 2011, the Company in connection with the modification of the terms of the Company’s 12% Note, cancelled the initial warrants issued in January 2011, and granted 600,000 warrants to the holder at an exercise price of $0.35 per share with an expiration date of August 23, 2016. The Company accounted for the cancellation of the initial warrants in January 2011 and the grant of 600,000 warrants in August 2011 was accounted for as modification of terms for the grants of 283,019 warrants issued in January 2011 and a new grant of 316,981 warrants. As a result of the grants and modification of warrants, the Company recognized as beneficial conversion features a debt discount of $141,257, which is reflected as additional paid-in capital and corresponding debt discount.

F-17

During September 2011, the Company extended the expiration of certain warrants issued to one of its officers from January 1, 2012 to January 1, 2017. The fair value of such modification amounted to $9,000 and was recorded as a selling, general and administrative expense and as an increase to additional paid-in capital.

Stock Option Plan

On December 15, 2006, the Company's Board of Directors and stockholders approved the Accelerize New Media, Inc. Stock Option Plan , or the Plan). The total number of shares of capital stock of the Company that may be subject to options under the Plan is 15,000,000 shares of common stock, following an increase of 5,000,000 shares of common stock in May 2011, from either authorized but unissued shares or treasury shares. The individuals who are eligible to receive option grants under the Plan are employees, directors and other individuals who render services to the management, operation or development of the Company or its subsidiaries and who have contributed or may be expected to contribute to the success of the Company or a subsidiary. Every option granted under the Plan shall be evidenced by a written stock option agreement in such form as the Board shall approve from time to time, specifying the number of shares of common stock that may be purchased pursuant to the option, the time or times at which the option shall become exercisable in whole or in part, whether the option is intended to be an incentive stock option or a non-incentive stock option, and such other terms and conditions as the Board shall approve.

The share-based payment is based on the fair value of the outstanding options amortized over the requisite period of service for option holders, which is generally the vesting period of the options. The fair value of the options granted during 2011 and 2010 is based on the Black Scholes Model using the following assumptions:

	2011	2010
Effective Exercise price	$0.35-0.60	$0.52-0.55
Effective Market price	$0.35-0.60	$0.52-0.55
Volatility	56%	57-62%
Risk-free interest	0.8-1.6%	1.3-2.6%
Terms	5 years	5 years
Expected dividend rate	0%	0%

Because the period on which the Company can base the computation of its historical volatility is shorter than the terms used to value the options granted by the Company, the expected volatility is based on the historical volatility of publicly-traded companies comparable to the Company.

F-18

The Company generally recognizes its share-based payment over the vesting terms of the underlying options.

						Weighted
						Average
				Weighted		Remaining		Aggregate
				Average Price		Contractual		Intrinsic
	Options			Per Share		Term		Value
Balance, January 1, 2010		7,602,500		$	0.18
Granted		325,000			0.55
Exercised		(511,666	)		0.13
Forfeitures		(330,834	)		0.44
Outstanding at December 31, 2010		7,085,000		$	0.20		3.39
Granted		2,150,000			0.59
Exercised		-			-
Forfeitures		(205,000	)		0.58
Outstanding at December 31, 2011		9,030,000		$	0.28		6.30	$	1,245,000
Exercisable at December 31, 2011		7,315,041			0.21		5.6	$	1,245,000

	2011		2010
Weighted-average grant date fair value	$	0.26	$	0.29
Fair value of options, recognized as selling, general, and administrative expenses	$	297,776	$	138,587

The total compensation cost related to non-vested awards not yet recognized amounted to approximately $37,000 at December 31, 2011 and the Company expects that it will be recognized over the following weighted-average period of 18 months.

If any options granted under the Plan expire or terminate without having been exercised or cease to be exercisable, such options will be available again under the Plan. All employees of the Company and its subsidiaries are eligible to receive incentive stock options and non-qualified stock options. Non-employee directors and outside consultants who provided bona-fide services not in connection with the offer or sale of securities in a capital raising transaction are eligible to receive non-qualified stock options. Incentive stock options may not be granted below their fair market value at the time of grant or, if to an individual who beneficially owns more than 10% of the total combined voting power of all stock classes of the Company or a subsidiary, the option price may not be less than 110% of the fair value of the common stock at the time of grant. The expiration date of an incentive stock option may not be longer than ten years from the date of grant. Option holders, or their representatives, may exercise their vested options up to three months after their employment termination or one year after their death or permanent and total disability. The Plan provides for adjustments upon changes in capitalization.

The Company’s policy is to issue shares pursuant to the exercise of stock options from its available authorized but unissued shares of common stock. It does not issue shares pursuant to the exercise of stock options from its treasury shares.

F-19

NOTE 8: INCOME TAXES

A reconciliation of the Company’s effective tax rate to the statutory federal rate is as follows:

	Years Ended
	December 31,
	2011			2010
Statutory federal rate		(34.0	%)		(34.0	%)
State income taxes net of federal income tax benefit		(5.2	%)		(5.2	%)
Permanent differences for tax purposes, primarily due non-cash financing costs		14.7	%		7.3	%
Change in valuation allowance		24.5	%		31.9	%
Effective income tax rate:		0.0	%		0.0	%

The components of the deferred tax assets and liabilities are as follows:

	December 31,
	2011			2010
Deferred tax assets:
Net operating loss carryovers	$	3,162,000		$	3,033,000
Stock-based compensation		360,000			477,000
Other temporary differences		85,000			57,000
Total deferred tax assets		3,607,000			3,567,000
Valuation allowance		(3,607,000	)		(3,567,000	)
Net deferred tax asset	$	-		$	-

At December 31, 2011, the Company had available net operating loss carryovers of approximately $8.1 million that may be applied against future taxable income and expires at various dates between 2026 and 2031, subject to certain limitations. The Company has a deferred tax asset arising substantially from the benefits of such net operating loss deduction and has recorded a valuation allowance for the full amount of this deferred tax asset since it is more likely than not that some or all of the deferred tax asset may not be realized. The valuation allowance for the deferred tax asset increased by $40,000 and $401,000 during the fiscal years ended September 30, 2011 and 2010 respectively. The net change in the valuation allowance is primarily due to lapses of expired options.

NOTE 9: COMMITMENTS

The Company entered into a 3-year lease for certain office space in Newport Beach, California, effective on September 1, 2011. Under the terms of the lease, the Company pays monthly base rent of $9,680.

During June 2011, the Company renewed a 1-year lease for certain office space in Whitefish, Montana, with a monthly base rent of $1,500.

F-20

Future annual minimum payments required under operating lease obligations at December 31, 2011 are as follows:

	Future Minimum
	Lease Payments
2012	$	125,160
2013	$	116,160
2014	$	77,440

As of December 31, 2009, the Company has amended and extended by three additional years the employment agreements with two of its officers. The agreements are renewable for an additional two-year period at the option of the applicable officer. The aggregate compensation to be paid under such agreements amounts to $300,000 per year. If the employment or consulting arrangement is terminated without cause by the Company, the Company is under the obligation, subject to certain restrictions, to pay the greater of the amount remaining on the term or one-year compensation of $150,000, to the respective employee or consultant. If the employment or consulting arrangement is terminated with cause, the Company has no liability for further payments.

As of December 31, 2009, the Company entered into a three-year employment agreement with an employee. The agreement is renewable for an additional two-year period at the option of the employee. The aggregate compensation to be paid under the agreement amounts to $100,000 per year. If the employment arrangement is terminated without cause by the Company, the Company is under the obligation, subject to certain restrictions, to pay the greater of the amount remaining on the term or one-year compensation. If the employment arrangement is terminated with cause, the Company has no liability for further payments.

The commitments under such agreements over the next year is as follows:

Year		Commitments
2012		$	400,000

NOTE 10: CONTINGENCIES

During 2011, one of the Company’s competitors filed a complaint against the Company, three of its clients and three of their respective officers, in the United States District Court for the Eastern District of Louisiana. The plaintiff claims, among other things, that the Company, with the aid of the other defendants, engaged in computer fraud and abuse, unlawful access to electronic communications, misappropriation of trade secrets, unfair trade practices, tortious conduct and intentional interference. The plaintiff alleges among other things that the Company misappropriated trade secrets by accessing, copying and downloading proprietary information from secure websites operated by the plaintiff without its authorization. The plaintiff seeks injunctive relief and damages in excess of $1 million, plus attorneys’ fees and costs. In June 2011, the Company filed a partial motion to dismiss and five counter-claims against the plaintiff. In August 2011, the plaintiff filed a motion to dismiss the Company’s counter-claims. On March 20, 2012, each of the motions was granted in part and denied in part, such that all parties have the right to amend their pleadings.

While the Company intends to vigorously defend this matter, there exists the possibility of adverse outcomes that the Company cannot determine. These matters are subject to inherent uncertainties and management's view of these matters may change in the future. The Company accrued $100,000 at December 31, 2011 in connection with this claim.

F-21

NOTE 11: SUBSEQUENT EVENTS

Significant Transactions resulting in issuance of shares of Common Stock

Between January 1 and March 27, 2012, the Company issued 2,393,400 shares of its common stock pursuant to the conversion of 23,934 shares of its Series A Preferred Stock.

On March 27, 2012, the Company amended the Certificate of Designation of 8% Series B Convertible Preferred Stock, or the Series B Certificate of Designation, by the filing of a Certificate of Amendment to the Certificate of Designation of 8% Series B Convertible Preferred Stock, with the Secretary of State of the State of Delaware, to provide for the mandatory conversion of all of the issued and outstanding Series B Preferred Stock into shares of our Common Stock on March 31, 2012 in accordance with the conversion price provided for in the Series B Certificate of Designation. Following the conversion on March 31, 2012, the Company expects to issue 11,662,500 shares of its Common Stock to the holders of the Series B Preferred Stock.

Between January 1 and March 27, 2012, the Company issued 1,081,250 shares of its common stock pursuant to the conversion of $432,500 12% Convertible Note Payable.

Increase in maximum number of shares of Common Stock under the Plan

On March 27, 2012, the Company approved an increase in the maximum number of shares of Common Stock, which can be issued to employees, consultants and other service providers under the Plan, from 15,000,000 shares to 22,500,000 shares of Common Stock.

F-22

Delaware	20-3858769
(State of Incorporation)	(IRS Employer Identification No.)

PART I

		Page
Item 1.	Business	4
Item 1A.	Risk Factors	7
Item 1B.	Unresolved Staff Comments	13
Item 2.	Properties	13
Item 3.	Legal Proceedings	13
Item 4.	Mine Safety Disclosures	14

PART II

Item 5.	Market For The Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	14
Item 6.	Selected Financial Data	15
Item 7.	Management ’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 8.	Financial Statements and Supplementary Data	20
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	20
Item 9A.	Controls and Procedures	20
Item 9B.	Other Information	22

	PART III

Item 10.	Directors, Executive Officers and Corporate Governance	22
Item 11.	Executive Compensation	24
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	26
Item 13.	Certain Relationships and Related Transactions, and Director Independence	26
Item 14.	Principal Accountant Fees and Services	27

	PART IV

Item 15.	Exhibits and Financial Statement Schedules	28

●	11,661,750 shares of our Common Stock issuable upon the conversion of our outstanding 8% Series B Convertible Preferred Stock, or Series B Preferred Stock;
●	409,000 shares of Common Stock issuable pursuant to Convertible Promissory Notes in a total principal amount of $204,500, which may be converted at the note holders’ option;

·	that a broker or dealer approve a person's account for transactions in penny stocks; and
·	the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

·	Obtain financial information and investment experience objectives of the person; and
·	make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

·	sets forth the basis on which the broker or dealer made the suitability determination; and
·	that the broker or dealer received a signed, written statement from the investor prior to the transaction.

Fiscal Year Ended December 31, 2010	High		Low

Quarter Ended March 31, 2010	$	0.65	$	0.51
Quarter Ended June 30, 2010	$	0.65	$	0.48
Quarter Ended September 30, 2010	$	0.64	$	0.48
Quarter Ended December 31, 2010	$	0.65	$	0.50

Fiscal Year Ended December 31, 2011	High		Low

Quarter Ended March 31, 2011	$	0.64	$	0.38
Quarter Ended June 30, 2011	$	0.45	$	0.38
Quarter Ended September 30, 2011	$	0.45	$	0.33
Quarter Ended December 31, 2011	$	0.44	$	0.26

Period	(a)Total Number Of Shares Purchased	(a)Average Price Paid per Share	(c)Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	(d) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
October 1 through October 31, 2011	25,000	$0.10	-0-	-0-
November 1 through November 31, 2011	-0-	-0-	-0-	-0-
December 1 through December 31, 2011	-0-	-0-	-0-	-0-
Total	25,000	$0.10	-0-	-0-

	Year ended December 31,						Increase/ (Decrease) in $ 2011			Increase/ (Decrease) in % 2011
	2011			2010			vs 2010			vs 2010
Revenue:
Online marketing services	$	1,090,817		$	973,567		$	117,250			12.0	%
Software-as-a-service		2,372,250			482,675			1,889,575			391.5	%
Total revenues:		3,463,067			1,456,242			2,006,825			137.8	%

Operating expenses:
Cost of revenues		512,632			248,945			263,687			105.9	%
Research and development		517,667			418,898			98,769			23.6	%
Selling, general and administrative		3,310,883			1,984,706			1,326,177			66.8	%
Total operating expenses		4,341,182			2,652,549			1,688,633			63.7	%

Operating loss		(878,115	)		(1,196,307	)		318,192			-26.6	%

Other expense:
Unrealized loss-marketable securities		(23,880	)		-			(23,880	)	NM
Interest expense		(316,939	)		(129,389	)		(187,550	)		145.0	%
		(340,819	)		(129,389	)		(211,430	)		163.4	%

Net loss from continuing operations		(1,218,934	)		(1,325,696	)		106,762			-8.1	%

Discontinued operations
Income from discontinued operations		5,218			568,805			(563,587	)		-99.1	%
Gain from the disposal of discontinued operations		36,621			-			36,621		NM
Net income from discontinued operations		41,839			568,805			(526,966	)		-92.6	%

Net loss	$	(1,177,095	)	$	(756,891	)	$	(420,204	)		55.5	%

	·	Fair value of options granted to employees of approximately $298,000;
	·	Amortization of capitalized web development and discount on notes payable, and depreciation of fixed assets of approximately $167,000; and
	·	Fair value of inducement to convertible note holders of approximately $177,000.

	·	Fair value of options granted to employees of approximately $139,000;
	·	Amortization of capitalized web development and discount on notes payable, and depreciation of fixed assets of approximately $101,000;
	·	Provision for bad debt of approximately $62,000, resulting from credit quality issues of certain of our customers;
	·	Fair value of shares issued for interest payment of approximately $63,000; and
	·	Net cash provided by discontinued operations of approximately $24,000.

Additionally, the following variations in operating assets and liabilities impacted our cash used in operating activities:
	·	Increase in accounts receivable of approximately $118,000, resulting an increase of our revenues during that period; and
	·	Increase in accounts payable and accrued expenses of approximately $50,000, resulting from a slower payment processing to vendors.

Name	Age	Position
Brian Ross	37	President, Chief Executive Officer, Treasurer, Sole Director
Thomas John Gabriele	38	Chief Operating Officer
Jeff McCollum	40	Chief Revenue Officer and President of Cake Marketing Division
Damon Stein	36	General Counsel and Secretary

Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards	Option Awards ($) (1)	Non-Equity Incentive Plan Compensation ($)	Non-Qualified Deferred Compen-sation Earnings	All Other Compensation ($) (2)	Total ($)
Brian Ross, Chief Executive Officer and Treasurer(3)	2011 2010	162,938 136,250	- -	- -	- -	- -	- -	7,172 8,660	170,110 144,910
Thomas Gabriele, Chief Operating Officer(4)	2011 2010	150,000 -	-	- -	530,600 (5) -	- -	- -	5,298 -	685,898 -
Jeff McCollum, Chief Revenue Officer and President of Cake Marketing Division (6)	2011 2010	183,625 157,000	- -	- -	- -	- -	- -	6,572 7,232	190,197 164,232
Damon Stein, General Counsel and Secretary (7)	2011 2010	166,625 155,000	- -	- -	9,000 (8) 116,600 (8)	- -	- -	6,656 6,398	182,281 277,998

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

Name	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Option Exercise Price ($)	Option Expiration Date
Brian Ross	2,000,000	--	$0.15	1/1/2017
Thomas Gabriele	500,000 (1)	1,500,000(1)	$0.60	1/1/2021
Jeff McCollum	3,500,000		$0.15	4/1/2017
Damon Stein	400,000 275,000 225,000(2)	- - -	$0.15 $0.65 $0.15	1/1/2017 12/30/2019 12/31/2016

	COMMON STOCK

	# OF	% OF	% OF
NAME (1)	SHARES	CLASS	VOTE

Brian Ross (2)	8,100,000	17.7%	14.1%
Jeff McCollum (3)	5,390,000	11.4%	9.2%
Damon Stein (4)	2,375,000	5.4%	4.2%
Thomas Gabriele (5)	666,667	1.9%	1.5%
All officers and directors as a group (4 persons)	17,356,667	36.4%	29.0%

(1)	Unless otherwise indicated, the business address of each person listed is in care of Accelerize New Media, Inc., 2244 West Coast Highway, Newport Beach, CA 92663.
(2)	Includes 2,000,000 vested options.
(3)	Includes 3,500,000 vested options.
(4)	Includes 675,000 vested options and 225,000 exercisable warrants.
(5)	Includes 666,667 options vested and that will vest within the next 60 days.

Equity Compensation Plan Information
Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders	n/a	n/a	n/a
Equity compensation plans not approved by security holders	9,030,000	$0.28	5,458,334
Total	9,030,000	$0.28	5,458,334

Fee Category	2011		2010

Audit Fees (1)	$	70,500	$	70,500
Audit Related Fees		-		-
Tax Fees (2)		5,000		5,000
All Other Fees		-		-

Total Fees	$	75,500	$	75,500

	Page
Report of Independent Registered Public Accounting Firm	F-2
Balance Sheet as of December 31, 2010 and 2011	F-3
Statements of Operations for each of the two years in the period ended December 31, 2011	F-4
Statements of Shareholders’ Equity for each of the two years in the period ended December 31, 2011	F-5
Statements of Cash Flows for each of the two years in the period ended December 31, 2011	F-6
Notes to Financial Statements	F-7 – F-22

SIGNATURE	TITLE	DATE

By: /S/ Brian Ross	President, Chief Executive Officer, Treasurer and Sole Director	March 29, 2012
	(Principal executive and accounting officer)

The following consolidated financial statements and financial statement schedules are included on the pages indicated:
	Page
Report of Independent Registered Public Accounting Firm	F-2
Balance Sheets as of December 31, 2011 and 2010	F-3
Statements of Operations for each of the two years in the periods ended December 31, 2011 and 2010	F-4
Statements of Stockholders’ Deficit for each of the two years in the periods ended December 31, 2011 and 2010	F-5
Statements of Cash Flows for each of the two years in the periods ended December 31, 2011 and 2010	F-6
Notes to Financial Statements	F-7 – F-22

	December 31,			December 31,
ASSETS	2011			2010

Current Assets:
Cash	$	104,750		$	91,603
Accounts receivable, net of allowance for bad debt of $95,301 and $70,813, respectively		423,045			182,296
Prepaid expenses and other assets		54,582			32,151
Marketable securities		120			-
Total current assets		582,497			306,050

Website development costs, net of accumulated amortization of $0 and $342,939, respectively		-			3,911
Property and equipment, net of accumulated depreciation of $20,878 and $13,701, respectively		57,689			15,067
Deferred financing fees		3,351			24,584
Total assets	$	643,537		$	349,612

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:
Accounts payable and accrued expenses	$	416,020		$	306,416
Net assets and liabilities of discontinued operations		-			7,033
Deferred revenues		75,242			-
Note payable and accrued interest, net of debt discount of $91,338 and $0		416,509			-
Convertible notes payable and accrued interest, net of debt discount of $0 and $5,250		-			531,667
Total current liabilities		907,771			845,116

Convertible notes payable and accrued interest, net of debt discount of $18,289 and $88,765, respectively		625,081			559,555
Total liabilities		1,532,852			1,404,671

Stockholders' Deficit:
Preferred stock, $0.001 par value, 2,000,000 shares authorized:
Series A, 23,934 and 53,000 issued and outstanding		322,339			713,567
Series B, 116,625 issued and outstanding		3,565,813			3,565,813
Common stock; $.001 par value; 100,000,000 shares authorized; 39,851,307 and 33,524,932 issued and outstanding		39,851			33,525
Additional paid-in capital		11,435,494			9,333,911
Accumulated deficit		(16,252,812	)		(14,701,875	)

Total stockholders’ deficit		(889,315	)		(1,055,059	)

Total liabilities and stockholders’ deficit	$	643,537		$	349,612

	Year ended
	December 31,
	2011			2010
Cash flows from operating activities:
Net loss from continuing operations	$	(1,218,934	)	$	(1,325,696	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		20,342			101,210
Amortization of debt discount		146,877			101,372
Provision for bad debt		24,488			61,802
Fair value of warrant modifications- compensation		9,000			-
Fair value of inducement to converible note holders		176,645			-
Fair value of warrants issued for services		-			4,906
Fair value of options		297,776			138,587
Fair value of shares issued for interest payment		8,535			63,135
Unrealized loss on marketable securities		23,880			-
Changes in operating assets and liabilities:
Accounts receivable		(289,237	)		(118,321	)
Prepaid expenses		(12,153	)		23,519
Domain name rights		-			(25,774	)
Deferred tax asset		1,564			27,652
Other assets		(10,278	)		(3,900	)
Accrued interest		(4,020	)		7,450
Accounts payable and accrued expenses		109,604			83,609
Deferred tax liability		(1,564	)		(27,652	)
Deferred revenues		75,242			-
Net cash used in continuing operations		(642,233	)		(888,101	)
Net cash (used in) provided by discontinued operations		(1,815	)		73,676
Net cash used in operating activities		(644,048	)		(814,425	)

Cash flows used in investing activities:
Capital expenditures		(59,052	)		(17,416	)
Proceeds from sale of lead generation business		36,621			-

Net cash used in investing activities		(22,431	)		(17,416	)

Cash flows from financing activities:
Proceeds from notes payable		600,000			-
Principal repayments on notes payable		(100,000	)		-
Net proceeds from issuance of common stock for cash		-			740,340
Net proceeds from exercise of warrants		199,626			2,250
Net proceeds from exercise of options		-			66,687
Repurchase of shares of common stock		(20,000	)		(14,000	)

Net cash provided by financing activities		679,626			795,277

Net increase (decrease) in cash		13,147			(36,564	)

Cash, beginning of year		91,603			128,167

Cash, end of year	$	104,750		$	91,603

Supplemental disclosures of cash flow information:
Cash paid for interest	$	43,190		$	121,990

Cash paid for income taxes	$	-		$	-

Non-cash investing and financing activities:

Beneficial conversion feature associated with convertible notes payable	$	141,257		$	-
Acquisition of marketable securities to satisfy account receivable	$	24,000		$	-
Write-off of fixed assets and capitalized web development	$	356,104		$	32,069
Conversion of preferred stock Series A to common stock	$	391,228		$	15,000
Conversion of note payable to common stock	$	530,000		$	-
Cashless exercise of warrants and options	$	375		$	49
Preferred stock dividends	$	373,842		$	407,176
Retirement of treasury stock	$	-		$	66,000
Fair value of shares issued as finder's fee	$	-		$	105

	ACCELERIZE NEW MEDIA INC.


	By:	/s/ Brian Ross
		Brian Ross, President


	By:	/s/ Brian Ross
		Brian Ross
		President and Chief Executive Officer


	By:	/s/ Brian Ross
		Brian Ross
		Chief Financial Officer
		(Principal Financial Officer)


	By:	/s/ Brian Ross
		Brian Ross
		President, Chief Executive Officer and Principal Financial Officer