UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   For the quarterly period ended March 31, 2016   or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___

Commission File Number 000-26460

AMERI Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware	95-4484725
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)

100 Canal Pointe Blvd., Suite 108 Princeton, New Jersey	08540
(Address of principal executive offices)	(Zip Code)

(732) 243-9250

Registrant's telephone number, including area code

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

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 ☑  No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑No ☐

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

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☑  

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

The number of shares of Common Stock of the Registrant, par value $.01 per share, outstanding as of May 16, 2016 was 13,485,472.

AMERI HOLDINGS, INC.

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2016

 INDEX

	Page
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Unaudited Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015		3
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2016 and 2015		4
Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015		5
Notes to Unaudited Condensed Consolidated Financial Statements		6
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations
Business Overview		12
Results for the Three Months Ended March 31, 2016 Compared to Results for the Three Months Ended March 31, 2015		13
Liquidity and Capital Resources		14
Critical Accounting Policies and Estimates		15
Recent Accounting Pronouncements		16
Special Note Regarding Forward-Looking Statements		16
Item 3 - Quantitative and Qualitative Disclosures About Market Risk		17
Item 4 - Controls and Procedures		17
Management's Report on Disclosure Controls and Procedures		17
Management's Report on Internal Control over Financial Reporting		18
Inherent Limitations of Effectiveness of Controls		18
Changes in Internal Control over Financial Reporting		18
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings		19
Item 1A - Risk Factors		19
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds		19
Item 3 - Defaults upon Senior Securities		19
Item 4 - Mine Safety Disclosures		19
Item 5 - Other Information		19
Item 6 - Exhibits		20
Signatures		21

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PART I – FINANCIAL INFORMATION

 ITEM 1. FINANCIAL STATEMENTS

The financial information set forth below with respect to the financial statements as of March 31, 2016 and 2015 and for the three-month periods ended March 31, 2016 and 2015 is unaudited. This financial information, in the opinion of our management, includes all adjustments consisting of normal recurring entries necessary for the fair presentation of such data. The results of operations for the three-month period ended March 31, 2016 are not necessarily indicative of results to be expected for any subsequent period. Our fiscal year end is December 31.

 AMERI HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2016			December 31, 2015
Assets
Cash and cash equivalents	$	505,173		$	1,878,034
Accounts receivable		4,929,298			4,872,082
Investments		-			82,908
Other current assets		318,826			343,809
Total current assets		5,753,297			7,176,833
Other assets:
Property and equipment, net		134,914			73,066
Intangible assets, net		3,072,617			3,114,513
Acquired goodwill		3,670,522			3,470,522
Total other assets		6,878,053			6,658,101
Total assets	$	12,631,350		$	13,834,934
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	2,587,069		$	2,597,385
Other accrued expenses		2,236,466			1,093,814
Consideration payable		1,630,490			3,649,267
Short term notes		1,477,386			1,235,935
Total current liabilities		7,931,411			8,576,401
Long term liabilities
Convertible notes		5,000,000			5,000,000
Long term acquisition consideration		500,000			-
Total long term liabilities		5,500,000			5,000,000
Total liabilities:		13,431,411			13,576,401
Stockholders' equity:
Preferred stock, $0.01 par value; 1,000,000 authorized, none issued and outstanding		-			-
Common stock, $0.01 par value; 100,000,000 shares authorized, 11,874,361 and 11,874,361 issued and outstanding as of March 31, 2016 and December 31, 2015, respectively		118,743			118,743
Additional paid-in capital		1,294,369			1,192,692
Retained earnings		(2,213,173	)		(1,052,902	)
Total stockholders' equity		(800,061	)		258,533
Total liabilities and stockholders' equity	$	12,631,350		$	13,834,934

See notes to the unaudited condensed consolidated financial statements.

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AMERI HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

	Three Months Ended March 31, 2016			Three Months Ended March 31, 2015
Net revenue	$	7,012,964		$	4,284,750
Cost of services		3,865,561			3,166,080
Gross profit		3,147,403			1,118,670
Operating expenses:
Selling and marketing		31,350			-
General and administration		3,610,336			33,720
Nonrecurring expenditures		375,405			-
Depreciation and amortization		111,628			8,267
Operating expenses		4,128,719			41,987
Operating income (loss):		(981,316	)		1,076,683
Interest expense		(113,746	)		-
Interest income/other income		2,005			-
Other expense		(2,304	)		-
Income before income taxes		(1,095,361	)		1,076,683
Tax provision		(2,020	)		-
Foreign exchange translation		(62,890	)		-
Net income (loss)	$	(1,160,271	)	$	1,076,683
Net and comprehensive income (loss) for the period	$	(1,160,271	)	$	1,076,683
Basic income (loss) per share		(0.10	)	$	0.11
Diluted income (loss) per share		(0.10	)	$	0.11
Basic weighted average number of shares		11,874,361			9,992,828
Diluted weighted average number of shares		11,874,361			9,992,828

See notes to the unaudited condensed consolidated financial statements.

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AMERI HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended March 31, 2016			Three Months Ended March 31, 2015
Cash flow from operating activities
Net income	$	(1,160,271	)	$	1,076,683
Adjustment to reconcile net income to net cash used in operating activities:
Depreciation		111,628			8,343
Stock, option, RSU and warrant expense		101,677			-
Changes in assets and liabilities
Increase (decrease) in:
Accounts receivable		(57,216	)		(1,247,104	)
Other current assets		24,983			(805	)
Increase (decrease) in:
Accounts payable and accrued expenses		1,132,336			(68,123	)
Consideration payable		(1,718,777	)		(100,000	)
Net cash used in operating activities:		(1,565,640	)		(331,006	)
Cash flow from investing activities
Purchase of and intangible and fixed assets		(131,580	)		(9,431	)
Investments		82,908			(340,000	)
Net cash used in investing activities		(48,672	)		(349,431	)
Cash flow from financing activities
Net proceeds from debt issuance		241,451			-
Additional stock issued		-			125,000
Net cash provided by financing activities		241,451			125,000
Net decrease in cash and cash equivalents		(1,372,861	)		(555,437	)
Cash and cash equivalents as at beginning of the period		1,878,034			1,381,058
Cash at the end of the period	$	505,173		$	825,621

See notes to the unaudited condensed consolidated financial statements.

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AMERI HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.ORGANIZATION:

AMERI Holdings, Inc., along with its wholly owned subsidiaries ("AMERI", the "Company", "we", or "our"), is a strategic consulting firm that brings a synergistic blend of classic consulting and product-based consulting services to its customer base. Headquartered in Princeton, New Jersey, we typically go to market both vertically by industry and horizontally by product/technology specialties and provide our customers with a wide range of business and technology offerings. We work with customers, primarily within North America, to improve process, reduce costs and increase revenue through the judicious use of technology.

NOTE 2.BASIS OF PRESENTATION:

The accompanying audited condensed consolidated financial statements have been prepared by AMERI pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to ensure the information presented is not misleading.

The accompanying audited condensed consolidated financial statements reflect all adjustments (which were of a normal, recurring nature) that, in the opinion of management, are necessary to present fairly our financial position, results of operations and cash flows as of and for the interim periods presented. All intercompany transactions have been eliminated in the accompanying audited condensed consolidated financial statements. These financial statements should be read in conjunction with the audited financial statements and notes thereto.

The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results to be expected for any future period or the full fiscal year. Our revenue and earnings may fluctuate from quarter-to-quarter based on factors within and outside our control, including variability in demand for information technology professional services, the length of the sales cycle associated with our service offerings, the number, size, and scope of our projects and the efficiency with which we utilize our employees.  Substantially all of our revenue is generated within North America.

Our comprehensive income (loss) consists of net income (loss) plus or minus any periodic currency translation adjustments.

NOTE 3.BUSINESS COMBINATIONS:

Acquisition of Bellsoft, Inc.  Bellsoft, Inc. ("Bellsoft") is a consulting company based in Lawrenceville, Georgia with over 175 consultants specialized in the areas of SAP software, business intelligence, data warehousing and other enterprise resource planning services.  Bellsoft has operations in the United States and in India. On November 20, 2015, the Company completed the acquisition of Bellsoft for the consideration listed below.  For financial accounting purposes, the Company recognizes September 1, 2015 as the effective date of the acquisition.

1. A cash payment in the amount of $3,000,000 at closing,

2. 235,295 shares of AMERI's common stock issued at closing,

3. $250,000 quarterly cash payments to be paid on the last day of each calendar quarter of 2016,

4. A $1,000,000 cash reimbursement to be paid 5 days following closing to compensate Bellsoft for a portion of its approximate cash balance as of September 1, 2015,

5. Approximately $2,500,000 to be paid within 30 days of closing in connection with the excess of Bellsoft's accounts receivable over its accounts payable as of September 1, 2015, and

6. Earn-out payments of approximately $500,000 a year for 2016 and 2017, if earned through the achievement of annual revenue and EBITDA targets specified in the Bellsoft purchase agreement, subject to downward or upward adjustment depending on actual results.  In the first quarter of 2016 the Company adjusted the estimate for the earnout to be paid from $400,000 to $500,000, a year for 2016 and 2017, respectively.

The Company and Bellsoft expect closing of open items during 2016 with the exception of any 2017 earned-out payment.

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AMERI HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Simultaneously with our acquisition of Bellsoft, Bellsoft entered into a Revolving Credit and Security Agreement (the "Credit Facility") with Federal National Payables, Inc., a Delaware corporation doing business as Federal National Commercial Credit (the "Lender" or "FNCC"). Up to $6 million principal amount of advances may be extended under the Credit Facility. The Credit Facility will be used to pay a portion of the costs associated with the acquisition of Bellsoft, with the balance being available for general working capital of Bellsoft. The Credit Facility has a term of two years, which will automatically renew unless a written notice of termination is given by Bellsoft or the Lender to the other at least 60 days prior to the end of the original or any renewed term. Interest under the Credit Facility will accrue on the higher of (a) the outstanding principal amount of advances under the Credit Facility and (b) $2,000,000 at a per annum rate equal to the Prime Rate plus 1.00%, which will be payable monthly in arrears. With each payment of interest, Bellsoft will also pay a servicing fee of 0.38% multiplied by the higher of (a) the average daily principal amount of advances under the Credit Facility for the previous calendar month or portion thereof and (b) $2,000,000. The Credit Facility is secured by substantially all of Bellsoft's assets. The amounts borrowed by Bellsoft under the Credit Facility are guaranteed by us.

Reverse Merger. On May 26, 2015, we completed a "reverse merger" transaction, in which we caused Ameri100 Acquisition, Inc., a Delaware corporation and our newly created, wholly owned subsidiary, to be merged with and into Ameri and Partners (dba Ameri100), a Delaware corporation (the "Merger"). As a result of the Merger, Ameri and Partners became our wholly owned subsidiary with Ameri and Partners' former stockholders acquiring a majority of the outstanding shares of our common stock. The Merger was consummated under Delaware law, pursuant to an Agreement of Merger and Plan of Reorganization, dated as of May 26, 2015 (the "Merger Agreement"). Concurrently with the closing of the Merger, we issued a 5% Unsecured Convertible Note (the "Note") due May 26, 2017, in the principal amount of $5,000,000, together with a warrant to purchase shares of our common stock, in a private placement to Lone Star Value Investors, LP ("Lone Star Value"), pursuant to the terms of a Securities Purchase Agreement, dated as of May 26, 2015. Prior to the Merger, Lone Star Value was our majority shareholder.

4. REVENUE RECOGNITION:

The Company recognizes revenue primarily through the provision of consulting services. We generate revenue by providing consulting services under written service contracts with our customers. The service contracts we enter into generally fall into two specific categories: time and materials and fixed-price.

We consider amounts to be earned once evidence of an arrangement has been obtained, services are delivered, fees are fixed or determinable, and collectability is reasonably assured. We establish billing terms at the time at which the project deliverables and milestones are agreed. Our standard payment terms are 60 days from invoice date.

When a customer enters into a time and materials, fixed-price, or a periodic retainer-based contract, the Company recognizes revenue in accordance with its evaluation of the deliverables in each contract. If the deliverables represent separate units of accounting, the Company then measures and allocates the consideration from the arrangement to the separate units, based on vendor specific objective evidence of the value for each deliverable.

The revenue under time and materials contracts is recognized as services are rendered and performed at contractually agreed upon rates. Revenue pursuant to fixed-price contracts is recognized under the proportional performance method of accounting. We routinely evaluate whether revenue and profitability should be recognized in the current period. We estimate the proportional performance on our fixed-price contracts on a monthly basis utilizing hours incurred to date as a percentage of total estimated hours to complete the project. This method is used because reasonably dependable estimates of costs and revenue earned can be made, based on historical experience and milestones identified in any particular contract. If we do not have a sufficient basis to measure progress toward completion, revenue is recognized upon completion of performance, subject to any warranty provisions or other project management assessments as to the status of work performed.

Estimates of total project costs are continuously monitored during the term of an engagement. There are situations where the number of hours to complete projects may exceed our original estimate, as a result of an increase in project scope, unforeseen events that arise, or the inability of the client or the delivery team to fulfill their responsibilities. Accordingly, recorded revenues and costs are subject to revision throughout the life of a project based on current information and historical trends. Such revisions may result in increases or decreases to revenue and income and are reflected in the consolidated financial statements in the periods in which they are first identified.

If our initial estimates of the resources required or the scope of work to be performed on a contract are inaccurate, or we do not manage the project properly within the planned time period, a provision for estimated losses on incomplete projects may be made. Any known or probable losses on projects are charged to operations in the period in which such losses are determined. A formal project review process takes place quarterly, although projects are continuously evaluated throughout the period. Management reviews the estimated total direct costs on each contract to determine if the estimated amounts are accurate, and estimates are adjusted as needed in the period identified. No losses were recognized on contracts during the period ended March 31, 2016.

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AMERI HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5.SHARE-BASED COMPENSATION:

On April 20, 2015, our Board of Directors and the holder of a majority of our outstanding shares of common stock approved the adoption of our 2015 Equity Incentive Award Plan (the "Plan") and a grant of discretionary authority to the executive officers to implement and administer the Plan. The Plan allows for the issuance of up to 2,000,000 shares of our common stock for award grants (all of which can be incentive stock options). The Plan provides equity-based compensation through the grant of cash-based awards, nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, and other stock-based awards. We believe that an adequate reserve of shares available for issuance under the Plan is necessary to enable us to attract, motivate and retain key employees and directors and to provide an additional incentive for such individuals through stock ownership and other rights that promote and recognize the financial success and growth of our Company.  During the three months ended March 31, 2016, we granted options to purchase 105,000 shares of our common stock to employees.

NOTE 6.INCOME TAXES:

The Company recorded a tax provision of $2,020 and $0 for the three months ended March 31, 2016 and 2015, respectively.  The effective tax reflected our combined federal and state income tax rates and the recognition of U.S. deferred tax liabilities for differences between the book and tax basis of goodwill.

We assess the reliability of our deferred tax assets and assess the need for a valuation allowance on an ongoing basis. The periodic assessment of the net carrying value of our deferred tax assets under the applicable accounting rules is highly judgmental. We are required to consider all available positive and negative evidence in evaluating the likelihood that we will be able to realize the benefit of our deferred tax assets in the future. Such evidence includes scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and the results of recent operations. Since this evaluation requires consideration of events that may occur some years into the future, there is significant judgment involved, and our conclusion could be materially different should certain of our expectations not transpire.

We have reviewed the tax positions taken, or to be taken, in our tax returns for all tax years currently open to examination by a taxing authority. As of March 31, 2016, the gross amount of unrecognized tax benefits exclusive of interest and penalties was zero. We have identified no other uncertain tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the twelve months ending December 31, 2016. We remain subject to examination until the statute of limitations expires for each respective tax jurisdiction.

NOTE 7.INTANGIBLE ASSETS:

We amortize our intangible assets that have finite lives using either the straight-line method or based on estimated future cash flows to approximate the pattern in which the economic benefit of the asset will be utilized. Amortization expense was $97,000 and $6,250 during the three months ended March 31, 2016 and 2015, respectively. This amortization expense relates to customer lists, which expire through 2020.

Estimated annual amortization expense (including amortization expense associated with capitalized software costs) for the current year and the following four years ending December 31 is as follows:

	Amortization Expense
	(in thousands)
2016	$	388,000
2017	$	388,000
2018	$	388,000
2019	$	363,000

The Company has its own software products, namely Simple APO, Langer Index, and IBP.  Total costs incurred for developing these products during the three months ended March 31, 2016 was $54,945 and have been capitalized. These costs will be amortized over the useful life once all substantial testing has been completed.

Of the acquisition consideration paid for Bellsoft, $1.81 million was for its customer list, which is considered an intangible asset that was acquired by the Company.

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AMERI HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8.NET INCOME (LOSS) PER SHARE:

A reconciliation of net income and weighted average shares used in computing basic and diluted net income per share is as follows:

	Three Months Ended
	March 31,
	2016				2015
	(in thousands, except per share data)
Basic net income (loss) per share:
Net income (loss) applicable to common shares		$	(0.10	)		$	0.11
Weighted average common shares outstanding			11,874				9,992
Basic net income (loss) per share of common stock		$	(0.10	)		$	0.11
Diluted net income (loss) per share:
Net income (loss) applicable to common shares		$	(0.10	)		$	0.11
Weighted average common shares outstanding			11,874				9,992
Dilutive effects of convertible debt, stock options and warrants			-				-
Weighted average common shares, assuming dilutive effect of stock options			11,874				9,992
Diluted net income (loss) per share of common stock		$	(0.10	)		$	0.11

Share-based awards, inclusive of all grants made under the Company's equity plans, for which either the stock option exercise price or the fair value of the restricted share award exceeds the average market price over the period, have an anti-dilutive effect on earnings per share, and accordingly, are excluded from the diluted computations for all periods presented.

As of March 31, 2016, there were approximately 338,189 share-based awards outstanding, respectively, under the Company's equity plans leaving 1,661,811 share-based units available under the Plan.  During the three months ended March 31, 2016, we granted options to purchase 105,000 shares of our common stock to employees.

Due to the Company's net loss, potential dilutive shares were not included in the calculation of diluted EPS on March 31, 2016, as it will have an antidilutive effect.

NOTE 9.COMMITMENTS AND CONTINGENCIES:

Operating Leases

The Company's principal facility is located in Princeton, New Jersey. The Company also leases office space in various locations with expiration dates between 2016 and 2018.  The lease agreements often include leasehold improvement incentives, escalating lease payments, renewal provisions, and other provisions which require the Company to pay taxes, insurance, maintenance costs, or defined rent increases. All of the Company's leases are accounted for as operating leases.  Rent expense is recorded over the lease terms on a straight-line basis.  Rent expense was $26,222 and $3,312 for the three months ended March 31, 2016 and March 31, 2015, respectively.  The increase during these periods is due to new office space that was leased by the Company in Princeton, New Jersey on July 1, 2015 and the addition of office space through the acquisition of Bellsoft.

The Company has entered into an operating lease for its primary office facility in Princeton, New Jersey, which expires in July 2017. The future minimum rental payments under these lease agreements are as follows:

Years ending December 31,	(in thousands)
2016	$	90
2017		60
2018		20
Total	$	170

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AMERI HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10.OPTIONS

As of March 31, 2016 and March 31, 2015, the Company had issued and outstanding options to purchase 255,000 and 0 shares of our common stock, respectively. There were no options outstanding and there was no option activity prior to March 31, 2015.

On January 22, 2016, the Company issued an option to purchase 5,000 shares of common stock. This option grant vests over 3 years at an exercise price of $6.02 and expire on January 22, 2021. The option is valued using the Black-Scholes pricing model. Significant assumptions used in the valuation include expected term of 3.25 years, expected volatility of 50%, date of issue risk free interest rate of 1.49%, and expected dividend yield of 0%. The value on the grant date of the options was $10,944 and the option expense for March 31, 2016 and 2015 was determined to be $702 and $0, respectively. As of March 31, 2016, no options have been exercised.

On January 28, 2016, the Company issued an option to purchase 100,000 shares of common stock. This option grant vests over 3 years at an exercise price of $6.02 and expires on January 28, 2021. The option is valued using the Black-Scholes pricing model. Significant assumptions used in the valuation include expected term of 3.25 years, expected volatility of 50%, date of issue risk free interest rate of 1.40%, and expected dividend yield of 0%. The value on the grant date of the options was $218,314 and the option expense for March 31, 2016 and 2015 was determined to be $12,795 and $0, respectively. As of March 31, 2016, no options have been exercised.

	Number of Shares		Weighted Avg. Exercise Price
Options outstanding at December 31, 2015		150,000		2.67
Granted		105,000	$	6.02
Exercised		—		—
Outstanding at March 31, 2016		255,000	$	4.05

As of March 31, 2016 and March 31, 2015 the outstanding options had a weighted average remaining term and intrinsic value of 4.53 and 0 years and $84,660 and $0, respectively.

Outstanding and Exercisable Options

Average Exercise Price			Number of Shares		RemainingAverageContractualLife (in years)		ExercisePricetimesnumber of Shares			WeightedAverageExercise Price			Intrinsic Value
	$	4.05		255,000		4.53		$	1,032,600		$	4.05		$	84,660

The options are valued using the Black-Scholes pricing model. The expensed amount for options for March 31, 2016 and 2015 was determined to be $28,678 and $0, respectively.

NOTE 11.WARRANTS

On May 26, 2015, the Company issued a warrant for the purchase of 2,777,777 shares of its common stock to Lone Star Value, which vested immediately, has an exercise price of $1.80 and expires on May 26, 2020. The warrant is valued using the Black-Scholes pricing model. Significant assumptions used in the valuation include stock price on the measurement date of $1.50, expected term of 2.5 years, expected volatility of 50%, risk free interest rate of 1.53%, and expected dividend yield of 0%. The value on the grant date of the warrant was $1,078,523 and the expense for each of March 31, 2016 and March 31, 2015 was determined to be $0.

On May 13, 2016, Lone Star Value completed an early partial exercise of its 2015 warrant (the "Original Warrant") for 1,111,111 shares the Company's common stock at a price of $1.80 per share, for total consideration to the Company of $2,000,000, and Lone Star Value was issued a replacement warrant for the remaining 1,166,666 shares under the Original Warrant on the same terms as the Original Warrant.  Lone Star Value also agreed to an amendment of its 5% Convertible Note, issued by the Company on May 26, 2015, to extend the maturity of the Note for two years in exchange for (i) the right to request that the Board of Directors of the Company (the "Board") expand the size of the Board to nine directors from the current eight, with Lone Star Value having the right to designate up to four of the nine directors, and (ii) the issuance of a new five-year warrant (the "New Warrant") for the purchase of 1,000,000 shares of the Company's common stock at a price of $6.00 per share, on substantively the same terms as the Original Warrant, except the New Warrant may only be exercised for cash.  Lone Star Value's Registration Rights Agreement, dated May 26, 2015, with us was also amended and restated to include the shares of common stock issuable under the New Warrant.   

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AMERI HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

There was no warrant activity in 2015. Below is a table summarizing the Company's outstanding warrants as of December 31, 2015 and March 31, 2016:

					Weighted Avg.
	Number of		Weighted Avg.		Remaining		Intrinsic
	Shares		Exercise Price		Term		Value
Outstanding at December 31, 2015		2,777,777		1.8		4.41	$	13,333,330
Granted		—		—		—
Outstanding at March 31, 2016		2,777,777		1.8		4.15		$13,333,330

For the three months ended March 31, 2016 and March 31, 2015, the Company incurred no warrants based expense.

NOTE 12.RESTRICTED STOCK UNITS:

On August 4, 2015, the Company issued restricted stock units for the right to receive, at settlement, 83,189 shares of common stock. Prior to this issuance there had been no restricted stock unit grants. This tranche of restricted stock units is valued at $3.51 or market value on the date of the grant and vest over 1 year. The value on the grant date of the restricted stock units was $291,994 and the restricted stock units expense for March 31, 2016 and March 31, 2015 was determined to be $72,999 and $0, respectively. As of March 31, 2016, no restricted stock units were vested.

NOTE 13.SUBSEQUENT EVENTS:

On April 20, 2016, the Company entered into a Stock Purchase Agreement with Dhruwa N. Rai, pursuant to which Mr. Rai purchased from the Company 500,000 unregistered shares of its common stock at a price per share of $6.00 for aggregate consideration to the Company of $3,000,000.

On May 10, 2016, the Company increased the size of the Board  to eight people.  Following the increase in the size of the Board, the Board appointed Dhruwa N. Rai, a member of the advisory council of Ameri and Partners Inc., one of the Company's operating subsidiaries, to fill the vacancy created by such increase, effective immediately.  On May 10, 2016, the Company also formed an Executive Strategy Committee, which will consider, and advise the Board on, strategic opportunities of the Company.  Following the formation of the Executive Strategy Committee, the Board appointed Mr. Rai as its chairman and Giri Devanur, the Company's President and Chief Executive Officer, and Srinidhi "Dev" Devanur, the Company's Executive Vice Chairman, as additional members of the committee.  Upon Mr. Rai's appointment to the Board and the Executive Strategy Committee, the Compensation Committee granted Mr. Rai an option to purchase 500,000 shares of common stock of the Company, with an exercise price of $7.00, and restricted stock units to receive 500,000 shares of common stock of the Company in consideration and contingent upon Mr. Rai's service to the Board of Directors and the Executive Strategy Committee.

On May 13, 2016, Lone Star Value completed an early partial exercise of its Original Warrant for 1,111,111 shares of the Company's common stock at a price of $1.80 per share, for total consideration to the Company of $2,000,000, and Lone Star Value was issued a replacement warrant for the remaining 1,166,666 shares under the Original Warrant on the same terms as the Original Warrant.  Lone Star Value also agreed to an amendment of the Convertable Note to extend the maturity of the Convertable Note for two years in exchange for (i) the right to request that the Board expand the size of the Board to nine directors from the current eight, with Lone Star Value having the right to designate up to four of the nine directors, and (ii) the issuance of a new five-year warrant for the purchase of 1,000,000 shares of the Company' common stock at a price of $6.00 per share, on substantively the same terms as the Original Warrant, except the New Warrant may only be exercised for cash.  Lone Star Value's Registration Rights Agreement, dated May 26, 2015, with the Company was also amended and restated to include the shares of common stock issuable under the New Warrant.

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

The following information should be read in conjunction with the information contained in the Unaudited Condensed Consolidated Financial Statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. See "Risk Factors" and "Special Note Regarding Forward-Looking Statements" included elsewhere herein. We use the terms "we," "our," "us," "AMERI" and "the Company" in this report to refer to AMERI HOLDINGS, Inc. and its wholly-owned subsidiaries.

Company History

We were incorporated under the laws of the State of Delaware in February 1994 as Spatializer Audio Laboratories, Inc., which was a shell company immediately prior to the Merger, on May 26, 2015, in which we caused Ameri100 Acquisition, Inc., a Delaware corporation and our newly created, wholly owned subsidiary, to be merged with and into Ameri and Partners (dba Ameri100), a Delaware corporation. As a result of the Merger, Ameri and Partners became our wholly owned operating subsidiary.  The Merger was consummated under Delaware law, pursuant to the Merger Agreement, and in connection with the Merger we changed our name to AMERI Holdings, Inc. We are headquartered in Princeton, New Jersey.

Overview

We are a next generation technology-management solutions firm.  We have built products and services to assist global 2000 companies by architecting and delivering the best technology solutions enabling customers to transform their business processes.  We have built a new method of measuring the effectiveness of technology deployments across large and medium size companies. Through acquisitions, we have built deep consulting expertise in business process management, robotic process automation, digital transformation services and enterprise resource planning particularly surrounding SAP software and technology.

We generate revenue primarily through the provision of consulting services. We generate revenue by providing consulting services under written service contracts with our customers. The service contracts we enter into generally fall into two specific categories: time and materials and fixed-price.

When a customer enters into a time and materials, fixed-price, or a periodic retainer-based contract, we recognize revenue in accordance with its evaluation of the deliverables in each contract. If the deliverables represent separate units of accounting, we then measure and allocate the consideration from the arrangement to the separate units, based on vendor specific objective evidence of the value for each deliverable.

The revenue under time and materials contracts is recognized as services are rendered and performed at contractually agreed upon rates. Revenue pursuant to fixed-price contracts is recognized under the proportional performance method of accounting. We routinely evaluate whether revenue and profitability should be recognized in the current period. We estimate the proportional performance on our fixed-price contracts on a monthly basis utilizing hours incurred to date as a percentage of total estimated hours to complete the project.

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Result of Operations

Results of Operations for the Three Months Ended March 31, 2016 Compared to the Three Months Ended March 31, 2015

	Three Months Ended March 31,			Three Months Ended March 31,
	2016			2015
Net Revenue	$	7,012,964		$	4,284,750
Cost of revenue		3,865,561			3,166,080
Gross profit	$	3,147,403		$	1,118,670
Operating expenses:
Selling and Marketing	$	31,350		$	-
General and administrative		3,610,336			33,720
Nonrecurring expenditures		375,405			-
Depreciation and amortization		111,628			8,267
Operating expenses	$	4,128,719		$	41,987
Income from operations		(981,316	)		1,076,683
Interest expense	$	(113,746	)	$	-
Interest income		2,005			-
Other expense		(2,304	)		-
Tax benefit/(provision)		(2,020	)		-
Foreign exchange translation		(62,890	)		-
Net income	$	(1,160,271	)	$	1,076,683

Revenues

Revenues for the three months ended March 31, 2016 increased by 63.7% from the three months ended March 31, 2015.  The increase in revenue is directly attributable to our acquisition of Bellsoft, Inc. We derived 100% of our revenues from our customers located in North America for the three months ended March 31, 2016.

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Gross margin

Our gross margin percentage (gross margin as percentage of revenues) was 44.8% for the three months ended March 31, 2016 as compared to 26.1% for the three months ended March 31, 2015.

Selling, general and administrative expenses

Selling, general and administrative expenses ("SG&A") include all costs, including rent costs, which are not directly associated with revenue-generating activities.  These include employee costs, corporate costs and facilities costs.  Employee costs include selling, marketing and administrative salaries and related employee benefits, travel, recruiting and training costs.  Corporate costs include costs such as reorganization costs, legal, accounting and outside consulting fees.  Facilities costs primarily include rent and communications costs.

SG&A for the three months ended March 31, 2016 increased to $3,641,686 from $33,720 and for the three months ended March 31, 2015. The increase in SG&A is directly attributable to our acquisition of Bellsoft and increased corporate overhead.

Nonrecurring expenses

Nonrecurring expenditures of $375,405 occurred during the three months ended March 31, 2016 and were primarily costs and expenses that are unlikely to occur again in the normal course of business. These expenditures included restructuring costs and legal fees. There were no nonrecurring expenditures for the three months ended March 31, 2015.

Depreciation and amortization costs

Depreciation and amortization expense amounted to $111,628 for the three months ended March 31, 2016, as compared to $8,267 for the period ended March 31, 2015.  The increase in depreciation and amortization costs was primarily due to addition of assets and acquisition of Bellsoft Inc. customer lists.

Operating income

Our operating income percentage was (14.0)% for the three months ended March 31, 2016, as compared to 25.1% for the three months ended March 31, 2015. This change was mainly due to an increase in SG&A expenses and nonrecurring expenditures.

Income taxes

Our provision for income taxes for the three months ended March 31, 2016 and year ended March 31, 2015, amounted to approximately $2,020 and $0, respectively.

Liquidity and Capital Resources

Our cash position was $505,173 as of March 31, 2016 as compared to $1,878,034 as of December 31, 2015, a decrease of $1,372,861 primarily as a result of working capital uses.  

Cash used by operating activities was $1,565,640 during the three months ended March 31, 2016 and was primarily a result of net decreases from working capital. Cash used from investing activities was $48,672 during the three months ended March 31, 2016 due primarily to acquisitions and assets purchased for the purpose of providing future revenues.  Cash provided by financing activities was $241,451 during the three months ended March 31, 2016 and was attributable to borrowing under our credit facility with FNCC.

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Operating Activities

Our largest source of operating cash flows is cash collections from our customers for different information technology services we render under various statements of work. Our primary uses of cash from operating activities are for personnel-related expenditures, leased facilities and taxes.

Critical Accounting Policies

Purchase Price Allocation.  We allocate the purchase price of our acquisitions to the assets and liabilities acquired, including identifiable intangible assets, based on their respective fair values at the date of acquisition. Some of the items, including accounts receivable, property and equipment, other intangible assets, certain accrued liabilities and other reserves require a degree of management judgment. Certain estimates may change as additional information becomes available. Goodwill is assigned at the enterprise level and is deductible for tax purposes for certain types of acquisitions. Management finalizes the purchase price allocation within the defined measurement period of the acquisition date as certain initial accounting estimates are resolved.

Valuation of Contingent Earn-out Consideration. Acquisitions may include contingent consideration payments based on the achievement of certain future financial performance measures of the acquired company. Contingent consideration is required to be recognized at fair value as of the acquisition date. We estimate the fair value of these liabilities based on financial projections of the acquired companies and estimated probabilities of achievement. We believe our estimates and assumptions are reasonable, however, there is significant judgment involved. We evaluate, on a routine, periodic basis, the estimated fair value of the contingent consideration and changes in estimated fair value, subsequent to the initial fair value estimate at the time of the acquisition, will be reflected in income or expense in the consolidated statements of operations. Changes in the fair value of contingent consideration obligations may result from changes in discount periods and rates, changes in the timing and amount of revenue and/or earnings estimates and changes in probability assumptions with respect to the likelihood of achieving the various earn-out criteria. Any changes in the estimated fair value of contingent consideration may have a material impact on our operating results.

Revenue Recognition. We recognize revenue in accordance with the Accounting Standard Codification 605 "Revenue Recognition." Revenue is recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the seller's price to buyer is fixed and determinable, and (4) collectability is reasonably assured. We recognize revenue from information technology services as the services are provided. Service revenues are recognized based on contracted hourly rates, as services are rendered or upon completion of specified contracted services and acceptance by the customer.

Accounts Receivable.   We extend credit to clients based upon management's assessment of their credit-worthiness on an unsecured basis. We provide an allowance for uncollectible accounts based on historical experience and management evaluation of trend analysis. We include any balances that are determined to be uncollectible in allowance for doubtful accounts. The allowances for uncollectible accounts as of March 31, 2016 and March 31, 2015 was $0.  Based on the information available, management believes our accounts receivable, net of allowance for doubtful accounts, are collectible.

Property and Equipment. Property and equipment is stated at cost. We provide for depreciation of property and equipment using the straight-line method over the estimated useful lives of the related assets ranging from 3 to 7 years. Leasehold improvements are amortized using the straight-line method over the shorter of the lease terms or the useful lives of the improvements. We charge repairs and maintenance costs that do not extend the lives of the assets to expenses as incurred.

We account for computer software costs developed for internal use in accordance with accounting principles generally accepted in the Unites States, which require companies to capitalize certain qualifying costs during the application development stage of the related software development project and to exclude the initial planning phase that determines performance requirements, most data conversion, general and administrative costs related to payroll and training costs incurred. Whenever a software program is considered operational, we consider the project to be completed, place it into service, and commence amortization of the development cost in the succeeding month.

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Recent Accounting Pronouncements

The Company is reviewing the effects of following recent updates.  The Company has no expectation that any of these items will have a material effect upon the financial statements.

· Update 2015-16 - Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments

· Update 2015-15 – Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements - Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting  (SEC Update)

· Update 2015-14 - Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date

· Update 2015-11 - Inventory (Topic 330): Simplifying the Measurement of Inventory

· Update 2015-08 - Business Combinations (Topic 805): Pushdown Accounting - Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115  (SEC Update)

· Update No. 2015-03 – Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs 

· Update 2015-17 - Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes

· Update 2016-01 - Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities

· Update No. 2015-02 - Consolidation (Topic 810): Amendments to the Consolidation Analysis

· Update 2016-09 - Compensation - Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting

Special Note Regarding Forward-Looking Information

Some of the statements in this Quarterly Report on Form 10-Q and elsewhere constitute forward-looking statements under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements involve known and unknown risks, uncertainties and other factors that may cause results, levels of activity, growth, performance, tax consequences or achievements to be materially different from any future results, levels of activity, growth, performance, tax consequences or achievements expressed or implied by such forward-looking statements. Such factors include, among other things, those listed below.

The forward-looking statements included in this Form 10-Q and referred to elsewhere are related to future events or our strategies or future financial performance, including statements concerning our 2015 outlook, future revenue and growth, customer spending outlook, general economic trends, IT service demand, future revenue and revenue mix, utilization, new service offerings, significant customers, competitive and strategic initiatives, growth plans, potential stock repurchases, future results, tax consequences and liquidity needs. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "believe," "anticipate," "anticipated," "expectation," "continued," "future," "forward," "potential," "estimate," "estimated," "forecast," "project," "encourage," "opportunity," "goal," "objective," "could," "expect," "expected," "intend," "plan," "planned," or the negative of such terms or comparable terminology. These forward-looking statements inherently involve certain risks and uncertainties, although they are based on our current plans or assessments which are believed to be reasonable as of the date of this Form 10-Q. Factors that may cause actual results, goals, targets or objectives to differ materially from those contemplated, projected, forecasted, estimated, anticipated, planned or budgeted in such forward-looking statements include, among others, the following possibilities: (1) failure to obtain new customers or retain significant existing customers; (2) the loss of one or more key executives and/or employees; (3) changes in industry trends, such as a decline in the demand for Enterprise Resource Planning and Enterprise Performance Management solutions, custom development and system integration services and/or declines in industry-wide information technology spending, whether on a temporary or permanent basis and/or delays by customers in initiating new projects or existing project milestones; (4) inability to execute upon growth objectives, including new services and growth in entities acquired by our Company; (5) adverse developments and volatility involving geopolitical or technology market conditions; (6) unanticipated events or the occurrence of fluctuations or variability in the matters identified as delays in, or the failure of, our sales pipeline being converted to billable work and recorded as revenue; (8) termination by clients of their contracts with us or inability or unwillingness of clients to pay for our services, which may impact our accounting assumptions; (9) inability to recruit and retain professionals with the high level of information technology skills and experience needed to provide our services; (10) failure to expand outsourcing services to generate additional revenue; (11) any changes in ownership of the Company or otherwise that would result in a limitation of the net operating loss carry forward under applicable tax laws; (12) the failure of the marketplace to embrace advisory and product-based consulting services; and (13) changes in our utilization levels. In evaluating these statements, you should specifically consider various factors described above. These factors may cause our actual results to differ materially from those contemplated, projected, anticipated, planned or budgeted in any such forward-looking statements.

 

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Although we believe that the expectations in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, growth, earnings per share or achievements. However, neither we nor any other person assumes responsibility for the accuracy and completeness of such statements. Except as otherwise required, we undertake no obligation to update any of the forward-looking statements after the date of this Form 10-Q to conform such statements to actual results.

 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

 ITEM 4. CONTROLS AND PROCEDURES

Management's Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end of the period covered by this quarterly report, being March 31, 2016, we have carried out an evaluation of the effectiveness of the design and operation of our Company's disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our Company's management, including our Company's Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our company's Chief Executive Officer and Chief Financial Officer concluded that our company's disclosure controls and procedures are effective as at the end of the period covered by this report as noted below in management's report on internal control over financial reporting. There have been no changes in our internal controls over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.

Disclosure controls and procedures and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

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Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934. Our management has assessed the effectiveness of our internal control over financial reporting as of March 31, 2016, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Our internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions and dispositions of our assets; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements in accordance with generally accepted accounting principles; providing reasonable assurance that receipts and expenditures are made in accordance with authorizations of management and our directors; and providing reasonable assurance that unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements would be prevented or detected on a timely basis. As a result of this assessment, our management concluded that, as of March 31, 2016, our internal control over financial reporting was effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Inherent Limitations on Effectiveness of Controls

Internal control over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal control over financial reporting is a process, which involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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 PART II – OTHER INFORMATION

 ITEM 1. LEGAL PROCEEDINGS

None.

 ITEM 1A. RISK FACTORS

In evaluating us and our common stock, we urge you to carefully consider the risks and other information in this Quarterly Report on Form 10-Q, as well as the risk factors disclosed in Item 1A of the Annual Report on Form 10-KT, which we filed with the SEC on March 15, 2016. There have been no material changes to the risk factors previously disclosed in our 2015 Form 10-KT.

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

On April 20, 2016, we entered into a Stock Purchase Agreement with Dhruwa N. Rai, pursuant to which Mr. Rai purchased 500,000 unregistered shares of our common stock, par value $0.01 per share, from us at a price per share of $6.00 for aggregate consideration to us of $3,000,000.

On May 13, 2016, Lone Star Value completed an early partial exercise of its Original Warrant for 1,111,111 shares of our common stock at a price of $1.80 per share, for total consideration to us of $2,000,000, and Lone Star Value was issued a replacement warrant for the remaining 1,166,666 shares under the Original Warrant on the same terms as the Original Warrant.  Lone Star Value also agreed to an amendment of its Note to extend the maturity of the Note for two years in exchange for (i) the right to request that the Board expand the size of the Board to nine directors from the current eight, with Lone Star Value having the right to designate up to four of the nine directors, and (ii) the issuance of a new five-year warrant for the purchase of 1,000,000 shares of the Company's common stock at a price of $6.00 per share, on substantively the same terms as the Original Warrant, except the New Warrant may only be exercised for cash.  Lone Star Value's Registration Rights Agreement, dated May 26, 2015, with the Company was also amended and restated to include the shares of common stock issuable under the New Warrant.

The issuance of the shares of common stock to Mr. Rai, the New Warrant and the shares of the Company's common stock exercisable for thereunder will be in reliance on an exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), provided by Section 4(a)(2) of the Securities Act as a private offering.  Such issuance of the shares to Mr. Rai and the New Warrant did not and the issuance of any shares of common stock exercisable under the New Warrant will not involve a public offering, and was made and will be made without general solicitation or advertising.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

 ITEM 5. OTHER INFORMATION

On January 28, 2016, we appointed Edward O'Donnell as Chief Financial Officer of our company and entered into an employment letter agreement with him.

On May 10, 2016, we increased the size of the Board  to eight people.  Following the increase in the size of the Board, the Board appointed Dhruwa N. Rai, a member of the advisory council of Ameri and Partners Inc., one of our operating subsidiaries, to fill the vacancy created by such increase, effective immediately.  On May 10, 2016, we also formed an Executive Strategy Committee, which will consider, and advise the Board on, strategic opportunities of our company.  Following the formation of the Executive Strategy Committee, the Board appointed Mr. Rai as its chairman and Giri Devanur, our President and Chief Executive Officer, and Srinidhi "Dev" Devanur, our Executive Vice Chairman, as additional members of the committee.

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ITEM 6. EXHIBITS

Exhibit Number	Description
2.1	Agreement of Merger and Plan of Reorganization, dated as of May 26, 2015, among Spatializer Audio Laboratories, Inc., Ameri100 Acquisition, Inc. and Ameri & Partners Inc. (filed as Exhibit 2.1 to AMERI Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on May 26, 2015 and incorporated herein by reference).
3.1	Certificate of Incorporation of Spatializer Audio Laboratories, Inc. (incorporated by reference to the Company's Registration Statement on Form S-1, Registration No. 33-90532, effective August 21, 1995).
3.2	Certificate of Amendment of Certificate of Incorporation of Spatializer Audio Laboratories, Inc. (changing name to AMERI Holdings, Inc.) (filed as Exhibit 3.1 to AMERI Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on May 26, 2015 and incorporated herein by reference).
3.3	By-laws of Spatializer Audio Laboratories, Inc. (incorporated by reference to the Company's Registration Statement on Form S-1, Registration No. 33-90532, effective August 21, 1995).
4.1	Form of Common Stock Purchase Warrant issued by AMERI Holdings, Inc. to Lone Star Value Investors, LP, dated May 26, 2015. (filed as Exhibit 4.1 to AMERI Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on June 1, 2015 and incorporated herein by reference)
4.2	Form of 5% Convertible Unsecured Promissory Note due May 26, 2017 from AMERI Holdings, Inc. to Lone Star Value Investors, LP, dated May 26, 2015. (filed as Exhibit 4.2 to AMERI Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on June 1, 2015 and incorporated herein by reference)
4.3*	Common Stock Purchase Warrant, dated May 12, 2016, issued by AMERI Holdings, Inc. to Lone Star Value Investors, LP, dated May 12, 2016.
4.4*	Amendment No. 1 of the 5% Convertible Unsecured Promissory Note due May 26, 2017 from AMERI Holdings, Inc. to Lone Star Value Investors, LP, dated May 12, 2016.
10.1	Employment Agreement, dated as of January 27, 2016, between Edward O'Donnell and Ameri and Partners Inc. (filed as Exhibit 10.1 to AMERI Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on January 28, 2016 and incorporated herein by reference).
10.2	Securities Purchase Agreement, dated as of April 20, 2016, by and between AMERI Holdings, Inc. and Dhruwa N. Rai (filed as Exhibit 10.1 to AMERI Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on April 21, 2016 and incorporated herein by reference).
10.3*	Amended and Restated Registration Rights Agreement, dated May 12, 2016, by and between AMERI Holdings, Inc. and Lone Star Value Investors, LP.
31.01*	Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.02*	Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.01*	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101**	Interactive Data Files.

_________________

*	Furnished herewith.
**	In accordance with Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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SIGNATURES

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

	AMERI HOLDINGS, INC.
Date: May 16, 2016	/s/ Giri Devanur
	Giri Devanur
	President and Chief Executive Officer (Principal Executive Officer)
Date: May 16, 2016	/s/ Edward O'Donnell
	Edward O'Donnell
	Chief Financial Officer (Principal Financial and Accounting Officer)

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