10-Q

 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 September 30, 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 $0.01 per share, outstanding as of November 14, 2016 was 13,885,972. 

AMERI HOLDINGS, INC.

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2016

 INDEX

	Page
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Unaudited Condensed Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015		3
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2016 and 2015		4
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 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		13
Item 3 - Quantitative and Qualitative Disclosures About Market Risk		19
Item 4 - Controls and Procedures		19
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings		21
Item 1A - Risk Factors		21
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds		21
Item 3 - Defaults upon Senior Securities		21
Item 4 - Mine Safety Disclosures		21
Item 5 - Other Information		21
Item 6 – Exhibits		22
Signatures		23

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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 September 30, 2016 and 2015 and for the three-month and nine-month periods ended September 30, 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 and nine-month periods ended September 30, 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

	September 30, 2016			December 31, 2015
Assets
Cash and cash equivalents	$	2,913,834		$	1,878,034
Accounts receivable		7,724,860			4,872,082
Investments		-			82,908
Other current assets		629,640			343,809
Total current assets		11,268,334			7,176,833
Other assets
Property and equipment, net		115,355			73,066
Intangible assets, net		9,359,571			3,114,513
Acquired goodwill		17,379,031			3,470,522
Total other assets		26,853,957			6,658,101
Total assets	$	38,122,291		$	13,834,934
Liabilities and stockholders' equity
Current liabilities
Accounts payable	$	4,906,959		$	2,597,385
Other accrued expenses		1,345,561			1,093,814
Consideration payable		3,225,093			3,649,267
Short-term notes		4,137,143			1,235,935
Total current liabilities		13,614,756			8,576,401
Long-term liabilities
Convertible notes		5,000,000			5,000,000
Long-term notes		1,566,671			-
Long-term consideration payable		13,188,260			-
Total long-term liabilities		19,754,931			5,000,000
Total liabilities		33,369,687			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, 13,885,972 and 11,639,066 issued and outstanding as of September 30, 2016 and December 31, 2015, respectively		138,861			118,743
Additional paid-in capital		10,042,992			1,192,692
Accumulated other comprehensive income (loss)		(287,722	)		-
Accumulated deficit		(5,141,527	)		(1,052,902	)
Total stockholders' equity		4,752,604			258,533
Total liabilities and stockholders' equity	$	38,122,291		$	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 September 30, 2016			Three Months Ended September 30, 2015			Nine Months Ended September 30, 2016			Nine Months Ended September 30, 2015
Net revenue	$	10,058,558		$	4,463,125		$	23,758,460		$	12,678,813
Cost of services		8,361,960			3,023,208			19,288,805			9,137,563
Gross profit		1,696,598			1,439,917			4,469,655			3,541,250
Operating expenses
Selling and marketing		137,024			-			401,487			-
General and administration		1,326,327			1,497,396			4,924,644			2,020,835
Nonrecurring expenditures		1,015,558			248,911			1,630,778			553,835
Depreciation and amortization		509,376			9,375			722,390			25,690
Operating expenses		2,988,285			1,755,682			7,679,299			2,600,360
Operating income (loss)		(1,291,687	)		(315,765	)		(3,209,644	)		940,890
Interest expense		(290,423	)		(62,113	)		(674,683	)		(87,655	)
Interest income/other income		2,205			54			44			82
Other expense/loss		(197,723	)		-			(197,723	)		-
Income before income taxes		(1,777,628	)		(377,824	)		(4,082,006	)		853,317
Tax benefit / (provision)		-			128,460			-			84,971
Foreign exchange translation		59,079			89,818			(6,619	)		89,818
Net income (loss)	$	(1,718,549	)	$	(159,546	)	$	(4,088,625	)	$	1,028,106
Net and comprehensive income (loss) for the period	$	(1,718,549	)	$	(159,546	)	$	(4,088,625	)	$	1,028,106
Basic income (loss) per share	$	(0.13	)	$	(0.02	)	$	(0.32	)	$	0.10
Diluted income (loss) per share	$	(0.13	)	$	(0.02	)	$	(0.32	)	$	0.10
Basic weighted average number of shares		13,653,586			9,992,828			12,794,149			9,992,828
Diluted weighted average number of shares		13,653,586			9,992,828			12,794,149			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

	Nine Months Ended September 30, 2016			Nine Months Ended September 30, 2015
Cash flow from operating activities
Net income/(loss)	$	(4,088,625	)	$	1,028,106
Adjustment to reconcile net income/(loss) to net cash used in operating activities
Depreciation		722,390			25,690
Stock, option, restricted stock unit and warrant expense		945,959			-
Changes in assets and liabilities
Increase (decrease) in:
Accounts receivable		(2,852,778	)		(7,221,074	)
Security deposits					(16,837	)
Other current assets		(285,831	)		(278,512	)
Increase (decrease) in:
Accounts payable and accrued expenses		2,561,321			555,782
Other current liabilities		-			1,670,333
Taxes payable		-			(84,971	)
Net cash used in operating activities		(2,997,564	)		(4,321,483	)
Cash flow from investing activities
Purchase of intangible and fixed assets		3,261,617			(3,131,972	)
Goodwill		-			(3,470,522	)
Acquisition consideration payable		(8,779,040	)		9,200,000
Investments		82,908			-
Net cash provided by (used in) investing activities		(5,434,515	)		2,597,506
Cash flow from financing activities
Net proceeds from debt issuance		2,501,212			5,000,000
Net proceeds from term loan		1,966,667			-
Increase in line of credit		-			250,000
Additional stock issued		5,000,000			159,521
Net cash provided by financing activities		9,467,879			5,409,521
Net change in cash and cash equivalents		1,035,800			3,685,544
Cash and cash equivalents as at beginning of the period		1,878,034			1,381,058
Cash at the end of the period	$	2,913,834		$	5,066,602

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 unaudited 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 unaudited 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 unaudited condensed consolidated financial statements. These financial statements should be read in conjunction with the unaudited financial statements and notes thereto.

The results of operations for the three and nine months ended September 30, 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.

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AMERI HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 recognized September 1, 2015 as the effective date of the acquisition.  The consideration payable for the acquisition of Bellsoft includes:

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 earn-out to be paid from $400,000 to $500,000 a year for each of 2016 and 2017.

As of September 30, 2016, cash earn-out payments of $500,000 for each of 2016 and 2017 and an aggregate of $306,609 in respect of the 2016 quarterly cash payments remain due to Bellsoft's former shareholders.

Entry into Agreement to Acquire Bigtech Software Private Limited. 

On June 23, 2016, the Company entered into a definitive agreement to purchase Bigtech Software Private Limited ("Bigtech"), a pure-play SAP services company providing a complete range of SAP services including turnkey implementations, application management, training and basis ABAP support. Bigtech has been in operation since 2000. Based in Bangalore, India, Bigtech offers SAP services to bring effectiveness in business operations to companies of all sizes and verticals. At the end of June 2016, the Ministry of External Affairs (India) completed the initial validation process for the Bigtech. As of September 30, 2016, the transaction is pending final approval from the Ministry of External Affairs (India). The consideration to be paid for the acquisition of Bigtech is:

1. $340,000, to be paid on September 22, 2016, which was within 90 days of closing;

2. Warrants for the purchase of 51,000 shares of the Company's common stock, with such warrants exercisable for two years from the date of closing; and

3. $255,000, which may become payable in cash as a commission to the sellers of Bigtech if Bigtech achieves certain revenue targets within the two years following closing.

The initial acquisition consideration of $340,000 was paid to the former owners of Bigtech on September 22, 2016 and Bigtech's financial results are included in our unaudited condensed consolidated financial results starting July 1, 2016.

Acquisition of Virtuoso

On July 22, 2015, the Company, through its wholly-owned subsidiaries, acquired all of the outstanding membership interests of Virtuoso, L.L.C. ("Virtuoso"), a Kansas limited liability company, pursuant to the terms of an Agreement of Merger and Plan of Reorganization, by and among the Company, Virtuoso Acquisition Inc., Ameri100 Virtuoso Inc., Virtuoso and the sole member of Virtuoso (the "Sole Member").  Virtuoso is an SAP consulting firm specialized in providing services on SAP S/4 HANA finance, enterprise mobility and cloud migration and is based in Leawood, Kansas. In connection with the merger, Virtuoso's name was changed to Ameri100 Virtuoso Inc.

The purchase price paid to the Sole Member for the acquisition of Virtuoso consisted of: (a) a cash payment in the amount of $675,000 which was due within 90 days of closing and was paid on October 21, 2016, (b) $659,138 or 101,250 shares of the Company's common stock at closing at a market price of $6.51 on July 22, 2016 , and (c) earn-out payments in cash and stock of $225,000 and approximately $280,744, respectively, to be paid, if earned, in 2016, 2017 and 2018.

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AMERI HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Acquisition of DC&M

On July 29, 2016, the Company acquired 100% of the membership interests of DC&M Partners, L.L.C. ("DCM"), an Arizona limited liability company, pursuant to the terms of a Membership Interest Purchase Agreement among the Company, DCM, all of the members of DCM, Giri Devanur and Srinidhi "Dev" Devanur. DCM is a provider of information technology development, consulting and management services and is located in Chandler, Arizona.

The purchase price for the acquisition of DCM consisted of: (a) a cash payment in the amount of $3,000,000 at closing, (b) 1,600,000 shares of the Company's common stock, which are to be issued on July 29, 2018 or upon a change of control of the Company (whichever occurs earlier), and (c) earn-out payments of $1,500,000 payable in cash each year to be paid, if earned, in 2017 and 2018. Consideration payable for DC&M for the earn out to be paid is $3 million in cash and amounts to be paid in stock for DC&M is $10.416 million as of September 30, 2016.

NOTE 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 September 30, 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 nine months ended September 30, 2016, we granted our directors and employees options to purchase 970,700 shares of our common stock and restricted stock units for 590,869 shares of our common stock.  As of September 30, 2016, aggregate grants under the Plan total 1,661,569 shares of our common stock.

NOTE 6. INCOME TAXES:

The Company recorded a tax benefit (provision) of $0 and $84,971 for the nine months ended September 30, 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 September 30, 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 $705,046 and $18,750 during the nine months ended September 30, 2016 and 2015, respectively. This amortization expense relates to customer lists, which expire through 2020.

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AMERI HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company has its own software products, namely Simple APO, Langer Index, and IBP.  Total costs incurred for developing these products during the nine months ended September 30, 2016 was $55,104 and have an expected useful life of two years.

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.

As of September 30, 2016, and December 31, 2015, capitalized intangible assets were as follows:

	September 30, 2016			December 31, 2015
Capitalized intangible assets		$	9,533,867		$	3,279,263
Accumulated amortization			174,296			164,750
Total intangible assets		$	9,359,571		$	3,114,513

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:

	Nine Months Ended
	September 30,
	2016				2015
	(in thousands, except per share data)
Basic net income (loss) per share:
Net income (loss) applicable to common shares		$	(0.32	)	$	0.10
Weighted average and common shares outstanding			12,794,149			9,992,828
Basic net income (loss) per share of common stock		$	(0.32	)	$	0.10
Diluted net income (loss) per share:
Net income (loss) applicable to common shares		$	(0.32	)	$	0.10
Weighted average and common shares outstanding			12,794,149			9,992,828
Dilutive effects of convertible debt, stock options and warrants			-			-
Weighted average common shares, assuming dilutive effect of stock options			12,794,149			9,992,828
Diluted net income (loss) per share of common stock		$	(0.32	)	$	0.10

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 September 30, 2016, there were approximately options to purchase 1,070,700 shares of the Company's common stock and restricted stock units for 590,869 shares of the Company's common stock, resulting in share-based awards for a total of 1,661,569 shares of our common stock, outstanding under the Plan leaving 338,431share-based units available under the Plan. During the nine months ended September 30, 2016, we granted our directors and employees options to purchase 970,700 shares of our common stock and restricted stock units for 590,869 shares of our common stock.  As of September 30, 2016, aggregate grants under the Plan total 1,661,569 shares of our common stock.

Due to the Company's net loss, potential dilutive shares were not included in the calculation of diluted EPS on September 30, 2016, as it will have an antidilutive effect.

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AMERI HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9. OPTIONS:

As of September 30, 2016, and September 30, 2015, the Company had issued and outstanding options to purchase 1,070,700 and 0 shares of our common stock, respectively.

On September 8, 2016, the Company issued options to employees related to acquisitions to purchase 215,200 shares of our common stock. These option grants vest over 3 years at an exercise price of $6.51 and expires on September 8, 2021. The options are valued using the Black-Scholes pricing model. Significant assumptions used in the valuation include expected term of 4 years, expected volatility of 50%, date of issue risk free interest rate of 0.57%, and expected dividend yield of 0%. The value on the grant date of the options was $546,318 and the option expense for September 30, 2016 and 2015 was determined to be $3,704 and $0, respectively. As of September 30, 2016, no options have been exercised.

	Number of Shares			Weighted Avg. Exercise Price
Options outstanding at December 31, 2015		150,000			2.67
Granted		975,700		$	6.79
Exercised		-			-
Cancelled / Expired		(55,000	)		4.19
Outstanding at September 30, 2016		1,070,700		$	6.34

As of September 30, 2016, and September 30, 2015 the outstanding options had a weighted average remaining term and intrinsic value of 4.56 and 0 years and $500,000 and $0, respectively.

Outstanding and Exercisable Options

Average Exercise Price			Number of Shares		RemainingAverageContractualLife (in years)		ExercisePricetimesnumber of Shares			WeightedAverageExercise Price			Intrinsic Value
	$	2.00		100,000		3.65		$	200,000		$	2.00		$	500,000

NOTE 10. WARRANTS:

There was no warrant activity prior to May 26, 2015. Below is a table summarizing the Company's outstanding warrants for the quarter ended September 30, 2016:

					Weighted Avg.
	Number of		Weighted Avg.		Remaining		Intrinsic
	Shares		Exercise Price		Term		Value
Outstanding at December 31, 2015		2,777,777		1.80		4.41	$	13,333,330
Granted		1,007,000		6.00		—		—
Exercised		1,111,111		1.80		—		—
Outstanding at September 30, 2016		2,673,666		1.8		3.66	$	15,444,440

For the nine months ended September 30, 2016 and September 30, 2015, the Company incurred $1,590 and $0 warrants based expense.

NOTE 11. RESTRICTED STOCK UNITS:

As of September 30, 2016 and 2015, there were restricted stock units outstanding of 590,869 and 83,189, respectively. As of September 30, 2016 and 2015 there were restricted stock units vested of 83,189 and 0, respectively.

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AMERI HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12. 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 $125,883 and $10,812 for the nine months ended September 30, 2016 and September 30, 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 DCM, Virtuoso and Bigtech.

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	$	26
2017		60
2018		20
Total	$	106

NOTE 13. LOAN AGREEMENT WITH STERLING NATIONAL BANK:

On July 1, 2016, the Company entered into that certain Loan and Security Agreement (the "Loan Agreement"), with its wholly-owned subsidiaries Ameri and Partners Inc and Bellsoft, as borrowers (the "Borrowers"), the Company and its wholly-owned subsidiaries Linear Logics Corp. and Winhire Inc serving as guarantors, the Company's Chief Executive Officer, Giri Devanur, serving as a validity guarantor, and Sterling National Bank, N.A. (as lender and as agent, "Sterling"). The Company joined DC&M and Virtuoso as borrowers under the Loan Agreement following their respective acquisition.

Under the Loan Agreement, the Borrowers are able to borrow up to an aggregate of $10 million, which includes up to $8 million in principal for revolving loans (the "Revolving Loans") for general working capital purposes, up to $2 million in principal pursuant to a term loan (the "Term Loan") for the purpose of a permitted business acquisition and up to $200,000 for letters of credit.  A portion of the proceeds of the Loan Agreement were also used to repay the November 20, 2015 credit facility that was entered into among the Company, its wholly-owned subsidiary Bellsoft and Federal National Payables, Inc.

The Loan Agreement has a term of three years, which will automatically renew unless a written notice of termination is given by the Borrowers or Sterling to the other at least 60 days prior to the end of the original or any renewed term.

Our outstanding balance with Sterling National Bank for the Term Loan and Revolving Loans was $1,966,667 and $3,338,106, respectively, as of September 30, 2016.

NOTE 14. SUBSEQUENT EVENTS:

There were no material subsequent events after September 30, 2016 through the date of this periodic report on Form 10-Q.

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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 had been a shell company until May of 2015.  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 (doing business as 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.  Since the Merger, we have been an active holding company 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.

We continue to explore strategic alternatives to improve the market position and profitability of our product and service offerings in the marketplace, generate additional liquidity for the Company, and enhance our valuation. We expect to pursue our goals during the next twelve months principally through organic growth and through other strategic alternatives. Some of these alternatives have included, and could continue to include, selective acquisitions.  The Company has obtained financing and additional capital from the sale of equity and incurrence of indebtedness in the past, and continues to consider capital raising and financing from the sale of various types of equity and incurrence of indebtedness to provide capital for our business plans and operations in the future.  The Company has also provided, and may from time to time in the future provide, information to interested parties.

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Result of Operations

Results of Operations for the Three Months Ended September 30, 2016 Compared to the Three Months Ended September 30, 2015

	Three Months Ended September 30,			Three Months Ended September 30,
	2016			2015
Net Revenue	$	10,058,558		$	4,463,125
Cost of revenue		8,361,960			3,023,208
Gross profit	$	1,696,598		$	1,439,917
Operating expenses
Selling and Marketing	$	137,024		$	-
General and administrative		1,326,327			1,497,396
Nonrecurring expenditures		1,015,558			248,911
Depreciation and amortization		509,376			9,375
Operating expenses	$	2,988,285		$	1,755,682
Income from operations		(1,291,687	)		(315,765	)
Interest expense	$	(290,423	)	$	(62,113	)
Interest income		2,205			54
Other income/(expense)		-			-
Loss on the sale of fixed asset		(197,723	)		-
Tax benefit/(provision)		-			128,460
Foreign exchange translation		59,079			89,818
Net income	$	(1,718,549	)	$	(159,546	)

Revenues

Revenues for the three months ended September 30, 2016 increased $5,595 million or 125.4% from the three months ended September 30, 2015.  The increase in revenue is directly attributable to our acquisition of DCM, Virtuoso and Bigtech.

Gross margin

Our gross margin percentage (gross margin as percentage of revenues) was 16.9% for the three months ended September 30, 2016 as compared to 32.3% for the three months ended September 30, 2015 as a result of lower margins for professional services in 2016 than the project revenues for 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.  Also included is the non-cash expense for stock based compensation.

SG&A for the three months ended September 30, 2016 decreased to $1,463,352 from $1,497,396 and for the three months ended September 30, 2015. The decrease is attributable to optimization of costs across locations.

Nonrecurring expenses

Nonrecurring expenditures of $1,015,558 were incurred during the three months ended September 30, 2016 and were primarily costs and expenses that are unlikely to occur again in the normal course of business. These expenditures included an increase in the previously calculated earn-out estimate, restructuring costs and legal fees.

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Depreciation and amortization costs

Depreciation and amortization expense amounted to $509,376 for the three months ended September 30, 2016, as compared to $9,375 for the period ended September 30, 2015.  The increase in depreciation and amortization costs was primarily due to the addition of assets and the acquisition of DCM, Virtuoso and Bigtech customer lists and we began to amortize the product expense capitalized earlier.

Operating income

Our operating income percentage was (12.8)% for the three months ended September 30, 2016, as compared to (7.1)% for the three months ended September 30, 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 September 30, 2016 and the three-month period ended September 30, 2015, amounted to $-0- and $128,460, respectively and declined as a result of our first and second quarter losses.

Result of Operations

Results of Operations for the Nine Months Ended September 30, 2016 Compared to the Nine Months Ended September 30, 2015

	Nine Months Ended September 30, 2016		Nine Months Ended September 30, 2015
Net Revenue	$	23,758,460	$	12,678,813
Cost of revenue		19,288,805		9,137,563
Gross profit	$	4,469,655	$	3,541,250
Operating expenses
Selling and Marketing	$	401,487	$	-
General and administrative		4,924,644		2,020,835
Nonrecurring expenditures		1,630,778		553,835
Depreciation and amortization		722,390		25,690
Operating expenses	$	7,679,299	$	2,600,360
Income from operations		(3,209,644)		940,890
Interest expense	$	(674,683)	$	(87,655)
Interest income		44		82
Other income/(expense)		-		-
Loss on the sale of fixed asset		(197,723)
Tax benefit/(provision)		-		84,971
Foreign exchange translation		(6,619)		89,818
Net income	$	(4,088,625)	$	1,028,106

Revenues

Revenues for the nine months ended September 30, 2016 increased from $12,678,813 to $23,758,460, or 87.4%, for the nine months ended September 30, 2015.  The increase in revenue is directly attributable to our acquisitions of Virtuoso, DC&M and Bigtech.

Gross margin

Our gross margin was $4.47 million, or 18.8%, for the nine months ended September 30, 2016 as compared to $3.5 million, or 27.9%, for the nine months ended September 30, 2015 and is a result of increased margins from acquired entities.

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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.  Also included is the non-cash expense for stock based compensation.

SG&A for the nine months ended September 30, 2016 increased to $5,326,131 from $2,020,835 and for the nine months ended September 30, 2015. The increase in SG&A is directly attributable to our acquisitions of Virtuoso and DC&M and increased corporate overhead.

Nonrecurring expenses

Nonrecurring expenditures of $1,630,778 and $553,835 occurred during the nine months ended September 30, 2016 and 2015 and were primarily costs and expenses that are unlikely to occur again in the normal course of business. These expenditures included an increase in the debt financing costs, restructuring costs and legal fees.

Depreciation and amortization costs

Depreciation and amortization expense amounted to $722,390 for the nine months ended September 30, 2016, as compared to $25,690 for the nine-month period ended September 30, 2015. The increase in depreciation and amortization costs was primarily due to the addition of assets and the acquisitions of DCM, Virtuoso and Bigtech customer lists.

Operating income

Our operating income percentage was (13.5)% for the nine months ended September 30, 2016, as compared to 7.4% for the nine months ended September 30, 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 nine months ended September 30, 2016 and nine months ended September 30, 2015, amounted to approximately 0 and $84,971, respectively.

Liquidity and Capital Resources

Our cash position was $2,913,834 as of September 30, 2016 as compared to $1,878,034 as of December 31, 2015, a change of $1,035,800 primarily as a result of financing activities, including the sale of our common stock of $3 million, the partial exercise of an outstanding warrant of $2 million, net proceeds from a term loan of $1.967 million and net funding from asset based loans of $2.5 million.  

On July 1, 2016, the Company entered into the Loan Agreement, with its wholly-owned subsidiaries Ameri and Partners Inc and Bellsoft, as borrowers, the Company and its wholly-owned subsidiaries Linear Logics Corp. and Winhire Inc serving as guarantors, the Company's Chief Executive Officer, Giri Devanur, serving as a validity guarantor, and Sterling National Bank, N.A. (as lender and as agent). The Company joined DC&M and Virtuoso as borrowers under the Loan Agreement following their respective acquisition.

Under the Loan Agreement, the Borrowers are able to borrow up to an aggregate of $10 million, which includes up to $8 million in principal for revolving loans for general working capital purposes, up to $2 million in principal pursuant to a term loan for the purpose of a permitted business acquisition and up to $200,000 for letters of credit.  A portion of the proceeds of the Loan Agreement were also used to repay the November 20, 2015 credit facility that was entered into among the Company, its wholly-owned subsidiary Bellsoft and Federal National Payables, Inc.

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The Loan Agreement has a term of three years, which will automatically renew unless a written notice of termination is given by the Borrowers or Sterling to the other at least 60 days prior to the end of the original or any renewed term.  Our outstanding balance with Sterling National Bank for the Term Loan and Revolving Loans was $1,966,667 and $3,338,106, respectively, as of September 30, 2016.

Cash used by operating activities was $(2,997,564) during the nine months ended September 30, 2016 and was primarily a result of remittances towards accounts receivables and increased accounts payables. Cash used in investing activities was $(5,434,515) during the nine months ended September 30, 2016 was primarily due to acquisitions and assets purchased for the purpose of providing future revenues.  Cash provided by financing activities was $9,467,879 during the nine months ended September 30, 2016 and was attributable to additional stock issuancesand proceeds from asset based loans and the Term Loan.

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 September 30, 2016 and September 30, 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 2016 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 September 30, 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 not 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, but have been corrected. There have been changes in our internal controls over financial reporting to resolve certain internal control inadequacies, due to the privately held nature of acquired subsidiaries that were corrected that occurred during the period covered by this report that have not materially affected, or are not 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 September 30, 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 September 30, 2016, our internal control over financial reporting was not effective in providing reasonable assurance, due to certain internal control inadequacies, due to the privately held nature of acquired subsidiaries that were corrected, 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 changes to correct certain internal control inadequacies, due to the privately held nature of acquired subsidiaries 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 not materially affected, or are not 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 Annual Report on Form 10-KT.

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

The issuance of shares of common stock to the Sole Member of Virtuoso was previously disclosed on our Current Report on Form 8-K, filed with the SEC on July 27, 2016 and was made 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 the Sole Member did not involve a public offering, and was 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 November 9, 2016, the Compensation Committee of the Board approved an increase in the base salary of our President and Chief Executive Officer, Giri Devanur, to $220,000 per year, effective as of November 14, 2016.  The Compensation Committee also approved Mr. Devanur's eligibility to earn a bonus of up to 50% of his annual base salary, as determined in the discretion of the Compensation Committee upon Mr. Devanur's satisfaction of criteria to be determined by the Compensation Committee.

..

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ITEM 6.EXHIBITS

Exhibit Number	Description
2.1	Agreement of Merger and Plan of Reorganization, dated as of July 22, 2016, by and among AMERI Holdings, Inc., Virtuoso Acquisition Inc., Ameri100 Virtuoso Inc., Virtuoso, L.L.C. and the sole member of Virtuoso, L.L.C. (filed as Exhibit 10.1 to AMERI Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on July 27, 2016 and incorporated herein by reference).
2.2	Membership Interest Purchase Agreement, dated as of July 29, 2016, by and among AMERI Holdings, Inc., DC&M Partners, L.L.C., all of the members of DCM, Giri Devanur and Srinidhi "Dev" Devanur (filed as Exhibit 10.1 to AMERI Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on August 1, 2016 and incorporated herein by reference).
3.1	Amended and Restated Certificate of Incorporation of Ameri Holdings, Inc. (filed as Exhibit 3.1 to AMERI Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on June 23, 2016 and incorporated herein by reference).
3.2	Amended and Restated Bylaws of Ameri Holdings, Inc. (filed as Exhibit 3.2 to AMERI Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on June 23, 2016 and incorporated herein by reference).
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 (filed as Exhibit 4.3 to AMERI Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the SEC on May 16, 2016 and incorporated herein by reference).
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 (filed as Exhibit 4.4 to AMERI Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the SEC on May 16, 2016 and incorporated herein by reference).
10.1	Loan and Security Agreement, dated as of July 1, 2016, by and among Ameri and Partners Inc, BellSoft, Inc., Ameri Holdings, Inc., Linear Logics, Corp., Winhire Inc, Giri Devanur, the lenders which become a party to the Loan and Security Agreement, and Sterling National Bank, N.A. (a lender and as agent for the lenders) (filed as Exhibit 10.1 to AMERI Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on July 7, 2016 and incorporated herein by reference).
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.

- 22 -

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: November 14, 2016	/s/ Giri Devanur
	Giri Devanur
	President and Chief Executive Officer (Principal Executive Officer)
Date: November 14, 2016	/s/ Edward O'Donnell
	Edward O'Donnell
	Chief Financial Officer (Principal Financial and Accounting Officer)

- 23 -

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Giri Devanur, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of AMERI HOLDINGS, Inc. (the "Company");

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and

5. The Company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the Audit Committee of the Company's Board of Directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.

Date: November 14, 2016	/s/ Giri Devanur
	Giri Devanur
	President and Chief Executive Officer ( Principal Executive Officer )

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Edward O'Donnell, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of AMERI HOLDINGS, Inc. (the "Company");

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and

5. The Company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the Audit Committee of the Company's Board of Directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.

Date: November 14, 2016	/s/ Edward O'Donnell
	Edward O'Donnell
	Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350, as adopted), Giri Devanur, the President and Chief Executive Officer of AMERI HOLDINGS, Inc. (the "Company"), and Edward O'Donnell, the Chief Financial Officer of the Company, each hereby certifies that, to the best of his or her knowledge:

The Company's Quarterly Report on Form 10-Q for the period ended June 30, 2016, to which this Certification is attached as Exhibit 32 (the "Periodic Report"), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2016	/s/ Giri Devanur
	Giri Devanur
	President and Chief Executive Officer ( Principal Executive Officer )
Date: November 14, 2016	/s/ Edward O'Donnell
	Edward O'Donnell
	Chief Financial Officer (Principal Financial and Accounting Officer)

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signatures that appear in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 14, 2016
Document And Entity Information
Entity Registrant Name	AMERI Holdings, Inc.
Entity Central Index Key	0000890821
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		13,885,972
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2016

XML

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Current Assets:
Cash and Cash Equivalents	$ 2,913,834	$ 1,878,034
Accounts receivable	7,724,860	4,872,082
Investments		82,908
Other Current Assets	629,640	343,809
Total Current Assets	11,268,334	7,176,833
Other assets:
Property and equipment, net	115,355	73,066
Intangible assets - net	9,359,571	3,114,513
Acquired goodwill	17,379,031	3,470,522
Total other assets	26,853,957	6,658,101
Total Assets	38,122,291	13,834,934
Current Liabilities:
Accounts payable	4,906,959	2,597,385
Other accrued expenses	1,345,561	1,093,814
Consideration payable	3,225,093	3,649,267
Short term notes	4,137,143	1,235,935
Total Current Liabilities	13,614,756	8,576,401
Long-term liabilities:
Convertible notes	5,000,000	5,000,000
Long-term notes	1,566,671
Long term consideration payable	13,188,260
Total long term liabilities	19,754,931	5,000,000
Total liabilities	33,369,687	13,576,401
Stockholders' Equity:
Preferred shares, $.01 par value, 1,000,000 shares authorized, none issued and outstanding
Common shares, $.01 par value, ; 100,000,000 shares authorized, 13,885,972 and 11,639,066 issued and outstanding as of September 30, 2016 and December 31, 2015, respectively	138,861	118,743
Additional Paid-In Capital	10,042,992	1,192,692
Accumulated other comprehensive income (loss)	(287,722)
Retained earnings	(5,141,527)	(1,052,902)
Total stockholders' equity	4,752,604	258,533
Total liabilities and stockholders' equity	$ 38,122,291	$ 13,834,934

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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Preferred stock, authorized shares	1,000,000	1,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Preferred stock, par value	$ 0.01	$ 0.01
Common stock, par value	$ 0.01	$ 0.01
Common stock, authorized shares	100,000,000	100,000,000
Common stock, issued shares	13,485,472	11,639,066
Common stock, outstanding shares	13,485,472	11,639,066

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Statement [Abstract]
Net revenue	$ 10,058,558	$ 4,463,125	$ 23,758,460	$ 12,678,813
Cost of revenue	8,361,960	3,023,208	19,288,805	9,137,563
Gross profit	1,696,598	1,439,917	4,469,655	3,541,250
Operating expenses:
Selling and marketing	137,024		401,487
General and administration	1,326,327	1,497,396	4,924,644	2,020,835
Nonrecurring expenditures	1,015,558	248,911	1,630,778	553,835
Depreciation and amortization	509,376	9,375	722,390	25,690
Operating expenses	2,988,285	1,755,682	7,679,299	2,600,360
Operating income (loss):	(1,291,687)	(315,765)	(3,209,644)	940,890
Interest expense	(290,423)	(62,113)	(674,683)	(87,655)
Interest income/other income	2,205	54	44	82
Other expense	(197,723)		(197,723)
Income before income taxes	(1,777,628)	(377,824)	(4,082,006)	853,317
Tax provision		128,460		84,971
Foreign exchange translation	59,079	89,818	(6,619)	89,818
Net income (loss)	(1,718,549)	(159,546)	(4,088,625)	1,028,106
Net and comprehensive income (loss) for the period	$ (1,718,549)	$ (159,546)	$ (4,088,625)	$ 1,028,106
Basic income (loss) per share	$ (0.13)	$ (0.02)	$ (0.32)	$ 0.10
Diluted income (loss) per share	$ (0.13)	$ (0.02)	$ (0.32)	$ 0.10
Basic weighted average number of shares	13,653,586	9,992,828	12,794,149	9,992,828
Diluted weighted average number of shares	13,653,586	9,992,828	12,794,149	9,992,828

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net income	$ (4,088,625)	$ 1,028,106
Adjustment to reconcile net income to net cash provided by (used in) operating activities
Depreciation	722,390	25,690
Stock, option, restricted stock unit and warrant expense	945,959
(Increase) decrease in:
Accounts receivable	(2,852,778)	(7,221,074)
Security deposits		(16,837)
Other current assets	(285,831)	(278,512)
Increase (decrease) in:
Accounts payable and accrued expenses	2,561,321	555,782
Other current liabilities		1,670,333
Taxes payable		(84,971)
Net cash provided by operating activities	(2,997,564)	(4,321,483)
Cash flows from investing activities:
Purchase of and intangible and fixed assets	3,261,617	(3,131,972)
Goodwill		(3,470,522)
Acquisition consideration payable	(8,779,040)	9,200,000
Investments	82,908
Net cash used in investing activities	(5,434,515)	2,597,506
Cash flows from financing activities:
Net proceeds from debt issuance	2,501,212	5,000,000
Net proceeds from term loan	1,966,667
Increase in line of credit		250,000
Additional stock issued	5,000,000	159,521
Net cash provided by financing activities	9,467,879	5,409,521
Net increase in cash and cash equivalents	1,035,800	3,685,544
Cash and cash equivalents as at beginning of the period	1,878,034	1,381,058
Cash at the end of the period	$ 2,913,834	$ 5,066,602

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1 ORGANIZATION

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION

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.

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2 BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

NOTE 2. BASIS OF PRESENTATION:

The accompanying unaudited 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 unaudited 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 unaudited condensed consolidated financial statements. These financial statements should be read in conjunction with the unaudited financial statements and notes thereto.

The results of operations for the three and nine months ended September 30, 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.

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3 BUSINESS COMBINATIONS

9 Months Ended

Sep. 30, 2016

Business Combinations [Abstract]

BUSINESS COMBINATIONS

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 recognized September 1, 2015 as the effective date of the acquisition.  The consideration payable for the acquisition of Bellsoft includes:

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 earn-out to be paid from $400,000 to $500,000 a year for each of 2016 and 2017.

As of September 30, 2016, cash earn-out payments of $500,000 for each of 2016 and 2017 and an aggregate of $306,609 in respect of the 2016 quarterly cash payments remain due to Bellsoft's former shareholders.

Entry into Agreement to Acquire Bigtech Software Private Limited. 

On June 23, 2016, the Company entered into a definitive agreement to purchase Bigtech Software Private Limited ("Bigtech"), a pure-play SAP services company providing a complete range of SAP services including turnkey implementations, application management, training and basis ABAP support. Bigtech has been in operation since 2000. Based in Bangalore, India, Bigtech offers SAP services to bring effectiveness in business operations to companies of all sizes and verticals. At the end of June 2016, the Ministry of External Affairs (India) completed the initial validation process for the Bigtech. As of September 30, 2016, the transaction is pending final approval from the Ministry of External Affairs (India). The consideration to be paid for the acquisition of Bigtech is:

1.	$340,000, to be paid on September 22, 2016, which was within 90 days of closing;
2.	Warrants for the purchase of 51,000 shares of the Company's common stock, with such warrants exercisable for two years from the date of closing; and

3. $255,000, which may become payable in cash as a commission to the sellers of Bigtech if Bigtech achieves certain revenue targets within the two years following closing.

The initial acquisition consideration of $340,000 was paid to the owners Bigtech on September 22, 2016 and included in our consolidation effective July 1^st 2016.

 Acquisition of Virtuoso

On July 22, 2015, the Company, through its wholly-owned subsidiaries, acquired all of the outstanding membership interests of Virtuoso, L.L.C. ("Virtuoso"), a Kansas limited liability company, pursuant to the terms of an Agreement of Merger and Plan of Reorganization, by and among the Company, Virtuoso Acquisition Inc., Ameri100 Virtuoso Inc., Virtuoso and the sole member of Virtuoso (the "Sole Member").  Virtuoso is an SAP consulting firm specialized in providing services on SAP S/4 HANA finance, enterprise mobility and cloud migration and is based in Leawood, Kansas. In connection with the merger, Virtuoso's name was changed to Ameri100 Virtuoso Inc.

The purchase price paid to the Sole Member for the acquisition of Virtuoso consisted of: (a) a cash payment in the amount of $675,000 which was due within 90 days of closing and was paid on October 21, 2016, (b) $659,138 or 101,250 shares of the Company's common stock at closing at a market price of $6.51 on July 22, 2016 , and (c) earn-out payments in cash and stock of $225,000 and approximately $280,744 to be paid, if earned, in 2016, 2017 and 2018.

Acquisition of DC&M

On July 29, 2016, the Company acquired 100% of the membership interests of DC&M Partners, L.L.C. ("DCM"), an Arizona limited liability company, pursuant to the terms of a Membership Interest Purchase Agreement among the Company, DCM, all of the members of DCM, Giri Devanur and Srinidhi "Dev" Devanur. DCM is a provider of information technology development, consulting and management services and is located in Chandler, Arizona.

The purchase price for the acquisition of DCM consisted of: (a) a cash payment in the amount of $3,000,000 at closing, (b) 1,600,000 shares of the Company's common stock, which are to be issued on July 29, 2018 or upon a change of control of the Company (whichever occurs earlier), and (c) earn-out payments of $1,500,000 payable in cash each year to be paid, if earned, in 2017 and 2018. Consideration payable for DC&M for the earn out to be paid is $3 million in cash and amounts to be paid in stock for DC&M is $10.416 million as of September 30, 2016.

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4 REVENUE RECOGNITION

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

REVENUE RECOGNITION

NOTE 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 September 30, 2016.

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5 SHARE-BASED COMPENSATION:

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

SHARE-BASED COMPENSATION:

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 nine months ended September 30, 2016, we granted our directors and employees options to purchase 970,700 shares of our common stock and restricted stock units for 590,869 shares of our common stock, resulting in aggregate grants under the Plan for 1,661,569 shares of our common stock.

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6 INCOME TAXES

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

INCOME TAXES

NOTE 6. INCOME TAXES:

The Company recorded a tax benefit (provision) of $0 and $84,971 for the nine months ended September 30, 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 September 30, 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

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7 INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

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 $686,296 and $18,750 during the nine months ended September 30, 2016 and 2015, respectively. This amortization expense relates to customer lists, which expire through 2020.

The Company has its own software products, namely Simple APO, Langer Index, and IBP.  Total costs incurred for developing these products during the nine months ended September 30, 2016 was $55,104 and have an expected useful life of two years.

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.

As of September 30, 2016, and December 31, 2015, capitalized intangible assets were as follows:

	September 30, 2016			December 31, 2015
Capitalized intangible assets		$	9,533,867		$	3,279,263
Accumulated amortization			174,296			164,750
Total intangible assets		$	9,359,571		$	3,114,513

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8 NET INCOME (LOSS) PER SHARE

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

NET INCOME (LOSS) PER SHARE

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: 

	Nine Months Ended
	September 30,
	2016				2015
	(in thousands, except per share data)
Basic net income (loss) per share:
Net income (loss) applicable to common shares		$	(0.32	)	$	0.10
Weighted average and common shares outstanding			12,794,149			9,992,828
Basic net income (loss) per share of common stock		$	(0.32	)	$	0.10
Diluted net income (loss) per share:
Net income (loss) applicable to common shares		$	(0.32	)	$	0.10
Weighted average and common shares outstanding			12,794,149			9,992,828
Dilutive effects of convertible debt, stock options and warrants			-			-
Weighted average common shares, assuming dilutive effect of stock options			12,794,149			9,992,828
Diluted net income (loss) per share of common stock		$	(0.32	)	$	0.10

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 September 30, 2016, there were approximately options to purchase 1,070,700 shares of the Company's common stock and restricted stock units for 590,869 shares of the Company's common stock, resulting in share-based awards for a total of 1,661,569 shares of our common stock, outstanding under the Plan leaving 338,431share-based units available under the Plan. During the nine months ended September 30, 2016, we granted our directors and employees options to purchase 970,700 shares of our common stock and restricted stock units for 590,869 shares of our common stock, resulting in aggregate grants under the Plan for 1,661,569 shares of our common stock.

Due to the Company's net loss, potential dilutive shares were not included in the calculation of diluted EPS on September 30, 2016, as it will have an antidilutive effect.

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9 OPTIONS

9 Months Ended

Sep. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

OPTIONS

NOTE 9. OPTIONS:

As of September 30, 2016, and September 30, 2015, the Company had issued and outstanding options to purchase 1,070,700 and 0 shares of our common stock, respectively.

On September 8, 2016, the Company issued options to employees related to acquisitions to purchase 215,200 shares of our common stock. These option grants vest over 3 years at an exercise price of $6.51 and expires on September 8, 2021. The options are valued using the Black-Scholes pricing model. Significant assumptions used in the valuation include expected term of 4 years, expected volatility of 50%, date of issue risk free interest rate of 0.57%, and expected dividend yield of 0%. The value on the grant date of the options was $546,318 and the option expense for September 30, 2016 and 2015 was determined to be $3,704 and $0, respectively. As of September 30, 2016, no options have been exercised.

	Number of Shares			Weighted Avg. Exercise Price
Options outstanding at December 31, 2015		150,000			2.67
Granted		975,700		$	6.79
Exercised		-			-
Cancelled / Expired		(55,000	)		4.19
Outstanding at September 30, 2016		1,070,700		$	6.34

As of September 30, 2016, and September 30, 2015 the outstanding options had a weighted average remaining term and intrinsic value of 4.56 and 0 years and $500,000 and $0, respectively.

Outstanding and Exercisable Options

Average Exercise Price			Number of Shares		Remaining Average Contractual Life (in years)		Exercise Price times number of Shares			Weighted Average Exercise Price			Intrinsic Value
	$	2.00		100,000		3.65		$	200,000		$	2.00		$	500,000

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11 RESTRICTED STOCK UNITS

9 Months Ended

Sep. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

RESTRICTED STOCK UNITS:

NOTE 11. RESTRICTED STOCK UNITS:

As of September 30, 2016 and 2015, there were restricted stock units outstanding of 590,869 and 83,189, respectively. As of September 30, 2016 and 2015 there were restricted stock units vested of 83,189 and 0, respectively.

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12 COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 12. 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 $125,883 and $10,812 for the nine months ended September 30, 2016 and September 30, 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 DCM, Virtuoso and Bigtech.

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	$	26
2017		60
2018		20
Total	$	106

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13 SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2016

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 13.SUBSEQUENT EVENTS:

Loan Agreement with Sterling National Bank

On July 1, 2016, the Company entered into that certain Loan and Security Agreement (the "Loan Agreement"), with its wholly-owned subsidiaries Ameri and Partners Inc and BellSoft. as borrowers (the "Borrowers"), the Company and its wholly-owned subsidiaries Linear Logics Corp. and Winhire Inc serving as guarantors (the "Guarantors"), the Company's Chief Executive Officer, Giri Devanur, serving as a validity guarantor, and Sterling National Bank, N.A. (as lender and as agent, "Sterling").

Under the Loan Agreement, the Borrowers are able to borrow up to an aggregate of $10 million, which includes up to $8 million in principal for revolving loans (the "Revolving Loans") for general working capital purposes, up to $2 million in principal pursuant to a term loan (the "Term Loan") for the purpose of a permitted business acquisition and up to $200,000 for letters of credit.  A portion of the proceeds of the Loan Agreement were also used to repay the November 20, 2015 credit facility that was entered \into among the Company, its wholly-owned subsidiary BellSoft and Federal National Payables, Inc.

The Loan Agreement has a term of three years, which will automatically renew unless a written notice of termination is given by the Borrowers or Sterling to the other at least 60 days prior to the end of the original or any renewed term.

Interest under the Loan Agreement is payable monthly in arrears and accrues as follows:

(a) in the case of Revolving Loans, a rate per annum equal to the sum of (i) the Wall Street Journal Prime Rate plus (ii) 2.00%;

(b) in the case of the Term Loan, a rate per annum equal to the sum of (i) the Wall Street Journal Prime Rate plus (ii) 3.75%; and

(c) in the case of other obligations of the Borrowers, a rate per annum equal to the sum of (i) the greater of (A) 3.25% or (B) Wall Street Journal Prime Rate plus (ii) 3.75%.

The Loan Agreement also requires the payment of certain fees, including, but not limited to letter of credit fees and an unused Revolving Loans fee.

The Loan Agreement contains financial and other covenant requirements, including, but not limited to, financial covenants that require the Borrowers to not permit capital expenditures above $150,000 in any fiscal year, maintain a fixed charge coverage ratio of not less than 2.00 to 1.00 and maintain certain debt to EBITDA ratios. The Loan Agreement also requires the Company and Borrowers to obtain Sterling's consent before making any permitted acquisitions.  The amounts borrowed by the Borrowers under the Loan Agreement are guaranteed by the Guarantors.  The Loan Agreement is secured by substantially all of the Borrowers' assets.  

Acquisition of Virtuoso

On July 22, 2015, the Company, through its wholly-owned subsidiaries, acquired all of the outstanding membership interests of Virtuoso, L.L.C. ("Virtuoso"), a Kansas limited liability company, pursuant to the terms of an Agreement of Merger and Plan of Reorganization (the "Merger Agreement"), by and among the Company, Virtuoso Acquisition Inc., Ameri100 Virtuoso Inc., Virtuoso and the sole member of Virtuoso (the "Sole Member").  Virtuoso is an SAP consulting firm specialized in providing services on SAP S/4 HANA finance, enterprise mobility and cloud migration and is based in Leawood, Kansas.

The purchase price paid to the Sole Member for the acquisition of Virtuoso consisted of: (a) a cash payment in the amount of $675,000 (due within 90 days of closing), (b) 101,250 shares of the Company's common stock at closing, and (c) earn-out payments to be paid, if earned, in 2017 and 2018.

Acquisition of DC&M

On July 29, 2016, the Company acquired 100% of the membership interests of DC&M Partners, L.L.C. ("DCM"), an Arizona limited liability company, pursuant to the terms of a Membership Interest Purchase Agreement (the "MIPA") among the Company, DCM, all of the members of DCM (the "Members"), Giri Devanur and Srinidhi "Dev" Devanur. DCM is a provider of information technology development, consulting and management services and is located in Chandler, Arizona.

The purchase price for the acquisition of DCM consisted of: (a) a cash payment in the amount of $3,000,000 at closing, (b) 1,600,000 shares of the Company's common stock (the "DCM Shares"), which are to be issued on July 29, 2018 or upon a change of control of the Company (whichever occurs earlier), and (c) earn-out payments to be paid, if earned, in 2017 and 2018.

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13 LOAN AGREEMENT WITH STERLING NATIONAL BANK

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

LOAN AGREEMENT WITH STERLING NATIONAL BANK

NOTE 13. LOAN AGREEMENT WITH STERLING NATIONAL BANK:

On July 1, 2016, the Company entered into that certain Loan and Security Agreement (the "Loan Agreement"), with its wholly-owned subsidiaries Ameri and Partners Inc and Bellsoft, as borrowers (the "Borrowers"), the Company and its wholly-owned subsidiaries Linear Logics Corp. and Winhire Inc serving as guarantors, the Company's Chief Executive Officer, Giri Devanur, serving as a validity guarantor, and Sterling National Bank, N.A. (as lender and as agent, "Sterling"). The Company joined DC&M and Virtuoso as borrowers under the Loan Agreement following their respective acquisition.

Under the Loan Agreement, the Borrowers are able to borrow up to an aggregate of $10 million, which includes up to $8 million in principal for revolving loans (the "Revolving Loans") for general working capital purposes, up to $2 million in principal pursuant to a term loan (the "Term Loan") for the purpose of a permitted business acquisition and up to $200,000 for letters of credit.  A portion of the proceeds of the Loan Agreement were also used to repay the November 20, 2015 credit facility that was entered into among the Company, its wholly-owned subsidiary Bellsoft and Federal National Payables, Inc.

The Loan Agreement has a term of three years, which will automatically renew unless a written notice of termination is given by the Borrowers or Sterling to the other at least 60 days prior to the end of the original or any renewed term.

Our outstanding balance with Sterling National Bank for the Term Loan and Revolving Loans was $1,966,667 and $3,338,106, respectively, as of September 30, 2016.

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7 INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Estimated annual amortization expense

	September 30, 2016			December 31, 2015
Capitalized intangible assets		$	9,533,867		$	3,279,263
Accumulated amortization			174,296			164,750
Total intangible assets		$	9,359,571		$	3,114,513

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8 NET INCOME (LOSS) PER SHARE (Tables)

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

A reconciliation of net income and weighted average shares used in computing basic and diluted net income

	Nine Months Ended
	September 30,
	2016				2015
	(in thousands, except per share data)
Basic net income (loss) per share:
Net income (loss) applicable to common shares		$	(0.32	)	$	0.10
Weighted average and common shares outstanding			12,794,149			9,992,828
Basic net income (loss) per share of common stock		$	(0.32	)	$	0.10
Diluted net income (loss) per share:
Net income (loss) applicable to common shares		$	(0.32	)	$	0.10
Weighted average and common shares outstanding			12,794,149			9,992,828
Dilutive effects of convertible debt, stock options and warrants			-			-
Weighted average common shares, assuming dilutive effect of stock options			12,794,149			9,992,828
Diluted net income (loss) per share of common stock		$	(0.32	)	$	0.10

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9 OPTIONS (Tables)

9 Months Ended

Sep. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Options

	Number of Shares			Weighted Avg. Exercise Price
Options outstanding at December 31, 2015		150,000			2.67
Granted		975,700		$	6.79
Exercised		-			-
Cancelled / Expired		(55,000	)		4.19
Outstanding at September 30, 2016		1,070,700		$	6.34

Outstanding and Exercisable Options

Average Exercise Price			Number of Shares		Remaining Average Contractual Life (in years)		Exercise Price times number of Shares			Weighted Average Exercise Price			Intrinsic Value
	$	2.00		100,000		3.65		$	200,000		$	2.00		$	500,000

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12 COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Future minimum rental payments under these lease agreements

Years ending December 31,	(In thousands)
2016	$	26
2017		60
2018		20
Total	$	106

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10 WARRANTS (Tables)

9 Months Ended

Sep. 30, 2016

Other Liabilities Disclosure [Abstract]

Outstanding warrants for the quarter ended

					Weighted Avg.
	Number of		Weighted Avg.		Remaining		Intrinsic
	Shares		Exercise Price		Term		Value
Outstanding at December 31, 2015		2,777,777		1.80		4.41	$	13,333,330
Granted		1,007,000		6.00		—		—
Exercised		1,111,111		1.80		—		—
Outstanding at September 30, 2016		2,673,666		1.8		3.66	$	15,444,440

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3 BUSINESS COMBINATIONS (Details Narrative)	9 Months Ended
	Sep. 30, 2016 USD ($) shares
Business Combinations [Abstract]
Cash payment at closing	$ 3,000,000
Shares of AMERI's common stock issued at closing | shares	235,295
Quarterly cash payments to be paid on the last day of each calendar quarter of 2016	$ 250,000
Cash reimbursement to be paid 5 days following closing	1,000,000
To be paid within 30 days of closing	2,500,000
Earn-out payments a year for 2016 and 2017	$ 500,000

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6 INCOME TAXES (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Tax Disclosure [Abstract]
Tax provision (benefit)		$ (128,460)		$ (84,971)

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7 INTANGIBLE ASSETS - Estimated annual amortization expense (Details)	Sep. 30, 2016 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Estimated amortization expense 2016	$ 388,000
Estimated amortization expense 2017	388,000
Estimated amortization expense 2018	388,000
Estimated amortization expense 2019	$ 363,000

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7 INTANGIBLE ASSETS (Details Narrative) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Capitalized intangible assets	$ 9,533,867	$ 3,279,263
Accumulated amortization	174,296	164,750
Total intangible assets	$ 9,359,571	$ 3,114,513

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5 SHARE-BASED COMPENSATION: (Details Narrative) - shares	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Accounting Policies [Abstract]
Restricted stock units to certain members of the Board of Directors	83,189	755,500

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8 NET INCOME (LOSS) PER SHARE - A reconciliation of basic and diluted net income (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Basic net income (loss) per share:
Net income (loss) applicable to common shares	$ (0.32)	$ 0.10
Weighted average common shares outstanding	12,794,149	9,992,828
Basic net income (loss) per share of common stock	$ (0.32)	$ 0.10
Diluted net income (loss) per share:
Net income (loss) applicable to common shares	$ (0.32)	$ 0.10
Weighted average common shares outstanding	12,794,149	9,992,828
Dilutive effects of convertible debt, stock options and warrants
Weighted average common shares, assuming dilutive effect of stock options	12,794,149	9,992,828
Diluted net income (loss) per share of common stock	$ (0.32)	$ 0.10

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8 NET INCOME (LOSS) PER SHARE (Details Narrative) - shares	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Accounting Policies [Abstract]
Share-based awards outstanding	1,446,369
Share-based awards available	553,631
Number of options granted for purchase to employees	83,189	755,500

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9 OPTIONS - Options (Details)	9 Months Ended
	Sep. 30, 2016 $ / shares shares
Shares
Outstanding, Beginning Balance	150,000
Granted	975,000
Exercised
Cancelled / Expired	55,000
Outstanding, Ending Balance	1,070,700
Weighted Average Exercise Price
Outstanding, Beginning Balance | $ / shares	$ 2.67
Granted | $ / shares	6.79
Exercised | $ / shares
Cancelled / Expired	4.19
Outstanding, Ending Balance | $ / shares	$ 6.79

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9 OPTIONS - Outstanding and Exercisable Options (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Average Exercise Price
Number of Shares Exercisable	100,000
Remaining Average Contractual Life (in years)	3 years 6 months 5 days
Exercise Price times number of Shares	$ 200,000
Weighted Average Exercise Price	$ 2
Intrinsic Value	$ 500,000
Expensed amount for options	$ 3,704	$ 0

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12 COMMITMENTS AND CONTINGENCIES - Future minimum rental payments (Details)	12 Months Ended
	Mar. 31, 2016 USD ($)
Years ending March 31,
2016	$ 26,000
2017	60,000
2018	20,000
Total	$ 106,000

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12 COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Accounting Policies [Abstract]
Rent expense	$ 125,883	$ 10,812

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11 RESTRICTED STOCK UNITS (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Number of restricted shares outstanding	$ 590,869	$ 83,189
Number of restricted stock units vested	83,189	0

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13 LOAN AGREEMENT WITH STERLING NATIONAL BANK (Details Narrative)	Sep. 30, 2016 USD ($)
Accounting Policies [Abstract]
Amount company can borrow	$ 10
Amount in pricipal for revolving loans	8
Term loan amount	13,188,260
Amount for letters of credit	$ 200,000