EX-99.3 4 ex99_3.htm
Exhibit 99.3
 
 
 
 

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
 
On July 29, 2016, Ameri Holdings, Inc. (the ''Company,'' ''we,'' ''our'' or ''us'') completed the acquisition of DC&M Partners, L.L.C. (''DC&M''). The accompanying unaudited pro forma condensed consolidated combined balance sheets as of June 30, 2016 presents our historical financial position combined with DC&M as if the acquisition and the financing for the acquisition had occurred on June 30, 2016. The accompanying unaudited pro forma condensed consolidated combined statements of operations for the fiscal year ended December 31, 2015 and the six months period ended June 30, 2016 present the combined results of our operations with DC&M as if the acquisition and the financing for the acquisition had occurred on December 31, 2015 and June 30, 2016. The historical unaudited pro forma condensed consolidated financial information includes adjustments that are directly attributable to the acquisition, factually supportable and with respect to the statement of operations are expected to have a continuing effect on our combined results. The unaudited pro forma condensed consolidated combined financial information does not reflect the costs of any integration activities or benefits that may result from realization of future cost savings from operating efficiencies, or any revenue, tax, or other synergies that may result from the acquisition. The unaudited pro forma condensed consolidated combined financial information and related notes are being provided for illustrative purposes only and are not necessarily indicative of what our financial position or results of operations actually would have been had we completed the acquisition at the dates indicated nor are they necessarily indicative of the combined company's future financial position or operating results of the combined company.
 
The accompanying unaudited pro forma condensed consolidated combined financial information and related notes should be read in conjunction with our consolidated financial statements for the six months ended June 30, 2016 and our unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2016 and DC&M audited financial statements as of and for the years ended December 31, 2015 and 2014 and DC&M unaudited consolidated financial statements as of and for the three and six months ended June 30, 2016 and 2015.
 
We prepared the unaudited pro forma condensed consolidated combined financial information pursuant to Regulation S-X Article 11. Accordingly, our cost to acquire DC&M of approximately $15.816 million has been allocated to the assets acquired and liabilities assumed according to their estimated fair values at the date of acquisition. Any excess of the purchase price over the estimated fair value of the net assets acquired has been recorded as goodwill. The preliminary estimates of fair values are reflected in the accompanying unaudited pro forma condensed consolidated combined financial information. The final determination of these fair values will be completed as soon as possible but no later than one year from the acquisition date. The final valuation will be based on the actual fair values of assets acquired and liabilities assumed at the acquisition date. Although the final determination may result in asset and liability fair values that are different than the preliminary estimates of these amounts included herein, it is not expected that those differences will be material to an understanding of the impact of this transaction to our financial results.
 
 
 
Exhibit 99.3 -- Page 1

 

 
Unaudited Pro Forma Condensed Combined Balance Sheet
June 30, 2016
 
   
Ameri Holdings, Inc.
    
DC&M Partners, L.L.C.
    
Combined Historical
  
Pro Forma Adjustments
    
Pro Forma Combined
  
ASSETS
                
Current assets:
                      
Cash and cash equivalents
  
$
3,603,663
    
$
2,570,828
    
$
6,174,491
       $ -    
$
6,174,491
  
Accounts receivable
    
4,133,570
      
3,206,166
      
7,339,736
         -      
7,339,736
  
Other current assets
    
481,221
      
21,000
      
502,221
                
502,221
  
Total current assets
    
8,218,454
      
5,797,994
      
14,016,448
        
-
      
14,016,448
  
                                           
Investments
    
-
      
-
      
-
    
1
    
15,816,000
      
-
  
                           
2
    
(15,816,000
)
        
Fixed assets
    
129,343
      
4,907
      
134,250
           -      
134,250
  
                                             
Intangible assets-net
    
2,975,617
      
-
      
2,975,617
    
2
    
5,400,000
      
8,375,617
  
                                             
Other assets
    
-
      
1,263
      
1,263
           -      
1,263
  
                                             
Goodwill
    
3,820,032
      
-
      
3,820,032
    
2
    
7,959,347
      
11,779,379
  
                                             
TOTAL ASSETS
  
$
15,143,446
    
$
5,804,164
    
$
20,947,610
        
$
13,359,347
    
$
34,306,957
  
                                             
LIABILITIES AND STOCKHOLDER'S EQUITY
                              
                                             
Current liabilities:
                                            
Accounts payable
  
$
3,220,206
    
$
2,750,030
    
$
5,970,236
         $ -    
$
5,970,236
  
Line of credit
    
1,407,369
      
-
      
1,407,369
           -      
1,407,369
  
Other accruals and current liabilities
    
1,417,098
      
597,481
      
2,014,579
           -      
2,014,579
  
Taxes payable
    
-
      
-
      
-
           -      
-
  
Consideration payable
    
1,186,609
      
-
      
1,186,609
    
1
    
15,816,000
      
17,002,609
  
Total current liabilities
    
7,231,282
      
3,347,511
      
10,578,793
          
15,816,000
      
26,394,793
  
                                             
Long-term liabilities
                                            
Convertible notes
    
5,000,000
              
5,000,000
           -      
5,000,000
  
Long term acquisition consideration
    
500,000
              
500,000
           -      
500,000
  
Total current and long-term liabilities
    
12,731,282
      
3,347,511
      
16,078,793
          
15,816,000
      
31,894,793
  
                                             
Stockholder's equity:
                                            
Preferred shares
    
-
      
-
      
-
           -      
-
  
Common stock
    
134,854
      
-
      
134,854
           -      
134,854
  
                                             
Additonal paid-in capital
    
5,700,286
      
(2,514,560
)
    
3,185,726
    
2
    
2,514,560
      
5,700,286
  
Retained earnings
    
(3,422,976
)
    
4,971,213
      
1,548,237
    
2
    
(4,971,213
)
    
(3,422,976
)
Total stockholder's equity
    
2,412,164
      
2,456,653
      
4,868,817
          
(2,456,653
)
    
2,412,164
  
                                             
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY
  
$
15,143,446
    
$
5,804,164
    
$
20,947,610
        
$
13,359,347
    
$
34,306,957
  
 

 


Exhibit 99.3 -- Page 2
 
 
 
 
 
 
                    
         
 Ameri
Holdings,
Inc.
    
DC&M
Partners,
L.L.C.
            
    Pro Forma Adjustments                    
                           
                           
   
1  
Investment in subsidiary
  
          15,816,000
                
     
Consideration payable
      
          15,816,000
            
                           
     
To record investment for DC&M.  Consideration payable of $5,400,000 and issuance of 1,600,000 shares on July 29, 2018 at $6.51 per share as of June 30, 2016.
     
   
2   
Investment in subsidiary
      
          15,816,000
            
     
Additional Paid in Capital
      
            2,514,560
            
     
Retained earnings
  
            4,971,213
                
     
Intangible assets
  
            5,400,000
                
     
Goodwill
  
            7,959,347
      
            
        
 
 
 


Exhibit 99.3 -- Page 3
 
 
 
 
 
 
Unaudited Pro Forma Combined Statement of Operations
  
For the Year Ended December 31, 2015
  
                     
    
Ameri Holdings, Inc.
    
DC&M Partners, L.L.C.
    
Combined Historical
    
Pro Forma Adjustments
    
Pro Forma Combined
  
Revenue
  
$
15,976,422
    
$
17,865,584
    
$
33,842,006
     $ -    
$
33,842,006
  
Cost of revenue
    
10,225,424
      
14,518,816
      
24,744,240
       -      
24,744,240
  
Gross profit
    
5,750,998
      
3,346,768
      
9,097,766
      
-
      
9,097,766
  
Operating expenses:
                             -          
Selling, general and administrative
    
5,807,760
      
2,182,795
      
7,990,555
       -      
7,990,555
  
Nonrecurring expenses
    
1,655,962
      
-
      
1,655,962
       -      
1,655,962
  
                                         
Income before other income / (expenses)
    
(1,712,724
)
    
1,163,973
      
(548,751
)
    
-
      
(548,751
)
                                         
Net interest expense
    
238,371
      
146
      
238,517
       -      
238,517
  
Other income (expense)
    
(89,818
)
    
9,000
      
(80,818
)
     -      
(80,818
)
Depreciation and amortization
    
157,941
      
-
      
157,941
       -      
157,941
  
                                         
Net income before income tax
    
(2,019,218
)
    
1,173,119
      
(864,391
)
    
-
      
(864,391
)
Provision for income taxes
    
128,460
      
(87,180
)
    
41,280
       -      
41,280
  
                                         
Income (loss) from continuing operations
    
(1,890,758
)
    
1,085,939
      
(823,111
)
    
-
      
(823,111
)
                                         
Unrealized foreign currency translation income
    
-
      
-
      
-
       -      
-
  
                                         
Net and comprehensive income for the period
  
$
(1,890,758
)
  
$
1,085,939
    
$
(823,111
)
  
$
-
    
$
(823,111
)
                                         
Net income (loss) per common share from continuing operations:
                  
                                         
Basic
  
$
(0.17
)
   $   -    
$
(0.07
)
   $   -    
$
(0.07
)
Diluted
  
$
(0.16
)
   $   -    
$
(0.06
)
   $   -    
$
(0.06
)
                                         
Weight average common share outstanding:
                                        
Basic
    
11,043,434
       -      
11,043,434
       -      
11,043,434
  
Diluted
    
11,874,361
      
1,600,000
      
13,474,361
       -      
13,474,361
  
 
 

 
Exhibit 99.3 -- Page 4




 
AMERI HOLDINGS, INC.
  
Unaudited Pro Forma Combined Statement of Operations
  
For the six month period ended June 30, 2016
  
 
    
Ameri Holdings, Inc.
    
DC&M Partners, L.L.C.
    
Combined Historical
    
Pro Forma Adjustments
    
Pro Forma Combined
  
Revenue
  
$
13,699,902
    
$
10,601,951
    
$
24,301,853
     $ -    
$
24,301,853
  
Cost of revenue
    
10,926,845
      
8,475,405
      
19,402,250
        -      
19,402,250
  
Gross profit
    
2,773,057
      
2,126,546
      
4,899,603
      
-
      
4,899,603
  
Operating expenses:
                                        
Selling, general and administrative
    
3,862,779
      
1,077,433
      
4,940,212
       -      
4,940,212
  
Nonrecurring expenditure
    
615,220
      
-
      
615,220
        -      
615,220
  
                                         
Income before other income / (expenses)
    
(1,704,942
)
    
1,049,113
      
(655,829
)
      
-
      
(655,829
)
                                           
Net Interest expense
    
(384,007
)
    
(310
)
    
(384,317
)
        -      
(384,317
)
Other income (expense)
    
(2,414
)
    
-
      
(2,414
)
        -      
(2,414
)
Depreciation and amortization
    
(213,013
)
    
-
      
(213,013
)
        -      
(213,013
)
Income Tax Expense
      -      
(65,775
)
    
(65,775
)
        -      
(65,775
)
                                           
Net income before income tax
    
(2,304,376
)
    
983,028
      
(1,321,348
)
      
-
      
(1,321,348
)
Provision for income taxes
    
-
      
-
      
-
                
-
  
                                           
Income (loss) from continuing operations
    
(2,304,376
)
    
983,028
      
(1,321,348
)
      
-
      
(1,321,348
)
                                           
Unrealized foreign currency translation income
    
(65,698
)
    
-
      
(65,698
)
        -      
(65,698
)
                                           
Net and comprehensive income for the period
  
$
(2,370,074
)
  
$
983,028
    
$
(1,387,046
)
    
$
-
    
$
(1,387,046
)
                                           
Net income (loss) per common share from continuing operations:
                                          
                                           
Basic
  
$
(0.20
)
   $   -    
$
(0.11
)
     $   -    
$
(0.11
)
Diluted
  
$
(0.14
)
   $   -    
$
(0.07
)
     $   -    
$
(0.07
)
                                           
Weight average common share outstanding:
                                          
Basic
    
11,493,097
        -      
11,493,097
          -      
11,493,097
  
Diluted
    
16,240,410
      
1,600,000
      
17,840,410
  1        -      
17,840,410
  
 
 
Pro Forma Adjustments
 
(1)  To effect shares that will be issued upon acquisition and elimination of DC&M Partners, L.L.C. members equity accounts.



Exhibit 99.3 -- Page 5





Note 1 — Basis of presentation
 
The unaudited pro forma condensed combined financial statements are based on Ameri Holdings, Inc. (the "Company") and DC&M Partners, L.L.C. ("DC&M) historical consolidated financial statements as adjusted to give effect to the acquisition of DC&M by the Company. The unaudited pro forma combined statements of operations for the six-month period ended June 30, 2016 and the 12 months ended December 31, 2015 give effect to the DC&M acquisition as if it had occurred on January 1, 2015. The unaudited pro forma combined balance sheet as of June 30, 2016 gives effect to the DC&M acquisition as if it had occurred on June 30, 2016.

 
Note 2 — Preliminary purchase price allocation

On July 29, 2016, the Company acquired DC&M for total consideration of approximately $15.816 million. The unaudited pro forma condensed combined financial information includes various assumptions, including those related to the preliminary purchase price allocation of the assets acquired and liabilities assumed of DC&M based on management's best estimates of fair value. The final purchase price allocation may vary based on final appraisals, valuations and analyses of the fair value of the acquired assets and assumed liabilities. Accordingly, the pro forma adjustments are preliminary and have been made solely for illustrative purposes.
 
The following table shows the preliminary allocation of the purchase price for DC&M as of June 30, 2016 to the acquired identifiable assets, liabilities assumed and pro forma goodwill:
 
   
June 30,
2016
  
Total purchase price
  
$
15,816,000
  
 
        
Cash and cash equivalents
    
2,564,108
  
Accounts receivable
    
3,206,166
  
Deposit and other expense
    
22,263
  
Other - Customer Lists
    
5,400,000
  
Total identifiable assets
    
11,192,537
  
 
        
Accounts payable and accrued expenses
    
2,743,310
  
Taxes Payable
    
-
  
Other payable
    
592,538
  
Total liabilities assumed
    
3,335,848
  
 
        
Net assets acquired
    
7,856,689
  
 
        
Total pro forma goodwill
  
$
7,959,311
  


Exhibit 99.3 -- Page 6




Note 3 — Pro forma adjustments
 
The pro forma adjustments are based on our preliminary estimates and assumptions that are subject to change. The following adjustments have been reflected in the unaudited pro forma condensed combined financial information:
 
Adjustments to the pro forma condensed combined balance sheet:
 
(1) Reflect the investment in a subsidiary and the payment of the purchase price; and
 
(2) Reflect the preliminary estimate of goodwill, which represents the excess of the purchase price over the fair value of DC&M's identifiable assets acquired and liabilities assumed as shown in Note 2.

 
 
 
 
 
 
Exhibit 99.3 -- Page 7