UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q

x☑QUARTERLY REPORT UNDERPURSUANT TO SECTION 13 or 15 (d)OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2015

or
For the quarterly period ended March 31, 2015
☐ 
oTRANSITION REPORT UNDERPURSUANT TO SECTION 13 or 15 (d)OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
For the transition period from ___ to ___

Commission File Number 000-26460
AMERI Holdings, Inc.
(Exact name of registrant as specified in its charter)
 
SPATIALIZER AUDIO LABORATORIES, INC.
(Name of registrant in its charter)
DELAWAREDelaware 95-4484725
(State or other jurisdiction of incorporation or organization)incorporation) (I.R.S. Employer Identification Number)No.)

100 Canal Pointe Building
Princeton, New Jersey
 
53 Forest Avenue, First Floor, Old Greenwich, Connecticut 0687008540
(Address of principal executive offices) (Zip Code)
(203) 489-9500
(Issuer’s telephone number, including area code)  
(Former name, former address and former fiscal year, if changed since last report.)

(732) 243-9250
Registrant's telephone number, including area code

Former Address: 100, Menlo Park Drive, Suite 316, Edison, New Jersey 08837
(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 twelve12 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 ninety90 days. ☒ YES  NOYes ☑  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
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"large accelerated filer,” “accelerated filer”" "accelerated filer," and “smaller"smaller reporting company”company" in Rule 12b-2 of the Exchange Act.Act (Check one):.

Large accelerated filer o
☐
Accelerated filer o
☐
Non-accelerated filer o
(Do not check if a smaller reporting company)
☐
Smaller reporting company x☑

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

State theThe number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 15,409,999 shares of Common Stock $0.01 of the Registrant, par value $.01 per share, outstanding as of May 8, 2015.August 13, 2015 was 11,639,066.






 
AMERI HOLDINGS, INC.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2015
 
SPATIALIZER AUDIO LABORATORIES, INC.
Quarterly Report on Form 10-Q
For the Three Months Ended March 31, 2015
INDEX

PART I. FINANCIAL INFORMATION2
  
Item 1.Unaudited Financial Statements2
   
 Page
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Unaudited Condensed Consolidated Balance Sheets as of June 30, 2015 and March 31, 2015 and December 31, 20142015
  23
 
Unaudited Condensed Consolidated Statements of OperationsComprehensive Income (Loss) for the Three Months Ended March 31,June 30, 2015 and March 31, 201434
 
Unaudited Condensed Consolidated Statements of Cash Flows for the Threethree Months Ended March 31,June 30, 2015 and March 31, 201445
 
Notes to Unaudited Condensed Consolidated Financial Statements5-76
  
Item 2.2 - Management's Discussion and Analysis of Financial Condition and Results of Operations8-9
   
Business Overview14
Results for the Three Months Ended June 30, 2015, Compared to Results for the Three Months Ended June 30, 201414
Liquidity and Capital Resources17
Acquisitions, Earnout Payments and Commitments18
Off Balance Sheet Arrangements, Contractual Obligations and Contingent Liabilities and Commitments18
Critical Accounting Policies and Estimates18
Recent Accounting Pronouncements19
Risk Factors19
Special Note Regarding Forward-Looking Statements19
Item 3.3 - Quantitative and Qualitative Disclosures About Market Risk920
Item 4 - Controls and Procedures 20 
Evaluation of Disclosure Controls and Procedures21
Changes in Controls and Procedures21
PART II - OTHER INFORMATION   
Item 4.1 - Legal ProceedingsRisk Controls and Procedures9
   
PART II. OTHER INFORMATION21  
Item 1A - Risk Factors21
Item 1.Legal Proceedings10
Item 1a.Risk Factors10
Item 2.2 - Unregistered Sales of Equity Securities and Use of Proceeds10
 21
Item 3.3 - Defaults Uponupon Senior Securities10
 21
Item 4.4 - Mine Safety Disclosures10
 21
Item 5.5 - Other Information10
 21
Item 6.6 - Exhibits1122
  
Signatures12
 23  
Exhibits13

- 1 -

 
- 2 -




PART I.I – FINANCIAL INFORMATION

Item 1.   Financial Statements

 ITEM 1. FINANCIAL STATEMENTS
 AMERI HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

SPATIALIZER AUDIO LABORATORIES, INC.
UNAUDITED BALANCE SHEETS
  
March 31,
2015
  
December 31,
2014
 
ASSETS 
     
Current Assets:    
Cash and Cash Equivalents $3,898  $5,085 
         
Total Current Assets  3,898   5,085 
         
Total Assets $3,898  $5,085 
         
LIABILITIES AND STOCKHOLDERS' DEFICIT 
         
Current Liabilities:        
Accounts Payable and Accrued Liabilities $10,344  $8,956 
         
Total Current Liabilities  10,344   8,956 
         
Commitments and Contingencies        
         
Stockholders' Equity (Deficit):        
Preferred shares, $.01 par value, 1,000,000 shares authorized, none issued and outstanding  --   -- 
Common shares, $.01 par value, 300,000,000 shares authorized, 15,409,999 shares issued and outstanding  154,099   154,099 
Additional Paid-In Capital  47,268,208   47,268,208 
Accumulated Deficit  (47,428,753)  (47,426,178)
         
Total Stockholders' Deficit  (6,446)  (3,871)
         
Total Liabilities and Stockholders' Deficit $3,898  $5,085 
The accompanying notes are an integral part of these statements.
  
June 30,
2015
  March 31, 2015 
  (unaudited)   
Assets
 
     
Current assets:    
Cash and cash equivalents $4,377,590  $825,621 
Accounts receivable  4,683,596   2,981,574 
Other current assets  266,747   180,622 
Total current assets  9,327,933   3,987,817 
         
Investments  -   340,000 
         
Fixed assets - net  30,221   29,906 
         
Intangible assets - net  1,072,165   100,000 
         
Security deposit  6,250   3,750 
         
Total assets $10,436,569  $4,461,473 
         
Liabilities and Stockholders' Equity
 
         
Long Term liabilities:        
Convertible notes $5,000,000  $- 
Current liabilities:
Accounts payable  3,426,992   2,936,608 
Other current liabilities  442,524   146,791 
Taxes payable  448,643   405,218 
Total liabilities  9,318,159   3,488,617 
         
Stockholders' equity:        
Preferred stock, $0.01 par value; 1,000,000 authorised, none issued and outstanding  -   - 
Common stock, $0.01 par value; 100,000,000 shares authorized,        
11,639,066 and 9,992,828 issued and outstanding as at June 30, 2015        
and March 31, 2015, respectively  116,390   99,928 
Additional paid-in capital  53,131   35,072 
Retained earnings  948,825   837,856 
Total stockholders' equity  1,118,346   972,856 
         
Total liabilities and stockholders' equity $10,436,569  $4,461,473 
 
- 2 -

 
 SPATIALIZER AUDIO LABORATORIES, INC.
UNAUDITED STATEMENTS OF OPERATIONS
  Three Months Ended March 31, 
  2015  2014 
Operating Expenses :    
General and Administrative $2,300  $7,584 
         
Operating Loss  (2,300)  (7,584)
         
Loss Before Income Taxes  (2,300)  (7,584)
Income Taxes  275   283 
         
Net Loss $(2,575) $(7,867)
Basic and Diluted Loss Per Share $(0.00) $(0.00)
Weighted Average Shares Outstanding – Basic and Diluted  15,409,999   14,901,647 
The accompanyingSee notes are an integral part of theseto the unaudited condensed consolidated financial statements.
 
- 3 -






AMERI HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
 

SPATIALIZER AUDIO LABORATORIES, INC.
   
Three months Period
ended June 30,
 
  2015  2014 
     
Net revenue $3,930,938  $3,993,326 
         
Cost of revenue  2,948,275   2,913,348 
         
Gross profit  982,663   1,079,978 
         
Operating expenses:        
         
Selling, general and administration expenses  489,719   504,805 
Merger and acquisition cost  304,924   - 
         
Operating income before other income / (expenses):  188,020   575,173 
         
Interest expense  (25,542)  - 
         
Depreciation and amortization  (8,048)  (8,572)
         
Interest income  28   - 
         
Net income before income tax  154,458   566,601 
Income tax expense  (43,489)  (158,236)
         
Net and comprehensive income for the period $110,969  $408,365 
Basic income (loss) per share  0.01   0.04 
Diluted income (loss) per share  0.01   0.04 
Basic weighted average number of shares  11,055,189   9,992,828 
Diluted weighted average number of shares  16,666,101   9,992,828 
UNAUDITED STATEMENTS OF CASH FLOWS
  Three Months Ended March 31, 
  2015  2014 
Cash Flows from Operating Activities:    
Net Loss $(2,575) $(7,867)
Adjustments to reconcile net loss to net cash used in operating activities:        
Net Change in Assets and Liabilities:        
Accounts Payable and Accrued Liabilities  1,388   (19,912)
Net Cash Used In Operating Activities  (1,187)  (27,779)
         
Cash Flows from Financing Activities:        
Issuance of Common Stock  -   50,000 
Net Cash Provided from Financing Activities  -   50,000 
         
Increase (decrease) in Cash and Cash Equivalents  (1,187)  22,221 
         
Cash and Cash Equivalents, Beginning of Period  5,085   249 
Cash and Cash Equivalents, End of Period $3,898  $22,470 
Supplemental Disclosure of Cash Flow Information:        
Cash paid during the period for:        
Interest $-  $- 
Income Taxes  275   1,732 
The accompanyingSee notes are an integral part of theseto the unaudited condensed consolidated financial statements.
 
- 4 -

AMERI HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
     
Three months
ended June 30,
 
  2015  2014 
     
Cash flows from operating activities:    
Net income $110,969  $408,365 
Adjustment to reconcile net income to net cash provided by        
(used in) operating activities        
Depreciation and amortization  8,048   8,572 
Changes in assets and liabilities:        
(Increase) decrease in:        
Accounts receivable  (1,702,022)  (637,391)
Other current assets  (86,125)  (341,686)
Security deposit  (2,500)  (3,750)
Increase (decrease) in:        
Accounts payable and accrued expenses  490,384   353,399 
Other current liabilities  295,733   286,906 
Taxes payable  43,425   158,235 
Net cash provided by (used in) operating activities  (842,024)  232,650 
         
Cash flows from investing activities:        
Purchase of fixed assets  (2,113)  (35,296)
Increase in intangibles  (978,415)  (125,000)
Investments  340,000   - 
Net cash provided by (used in) investing activities  (640,528)  (160,296)
         
Cash flows from financing activities:        
Proceeds from issue of convertible note  5,000,000   - 
Issuance of capital  34,521   125,000 
Net cash provided by financing activities  5,034,521   125,000 
         
Net increase (decrease) in cash and cash equivalents  3,551,969   197,354 
Cash at the beginning of the year  825,621   374,706 
Cash at the end of the year $4,377,590  $572,060 
         
Supplementary disclosure of cash flows information        
Cash paid during the period for:        
Interest $542  $- 
Income taxes  -   26,405 
Issuance of restricted stock awards $2,039   - 



See notes to the unaudited condensed consolidated financial statements.
- 5 -

 
SPATIALIZER AUDIO LABORATORIES, INC.

AMERI HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
1.ORGANIZATION:

OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESAMERI HOLDINGS, Inc. ("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.

NatureIn this Quarterly Report on Form 10-Q (the "Form 10-Q"), we use the terms "AMERI," "AMERI HOLDINGS," "we," "our Company," "the Company," "our" and "us" to refer to AMERI HOLDINGS, Inc. and its wholly-owned subsidiaries, which are described in on the Current Report Form 8-K as filed with the Securities and Exchange Commission (the "SEC") on June 1, 2015 (the "June 2015 Form 8-K").
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 Inc. (dba Ameri100), a Delaware corporation ("Ameri & Partners") (the "Merger").  As a result of Operations
the Merger, Ameri & Partners became our wholly-owned subsidiary with Ameri & Partners' former stockholders acquiring a majority of the outstanding shares of our common stock.  The Merger was consummated under Delaware law, pursuant to an Agreement of Merger and Plan of Reorganization, dated as of May 26, 2015 (the "Merger Agreement").  Immediately prior to the closing of the Merger, we changed our corporate name to AMERI Holdings, Inc. from our previous name Spatializer Audio Laboratories, Inc.  (the "Company")Our trading symbol on the OTCQB marketplace was incorporated underchanged to "AMRH" from "SPZR."
As a result of the laws of Delaware in 1994.  Until 2007, the Company wasMerger, we are now a developer, licensor and marketer of next generation technologies fortechnology-management solutions firm.  We have built products and services to assist Global 2000 companies by architecting and delivering the consumer electronics, personal computing, entertainmentbest 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 cellular telephone markets. The principalmedium size companies.  Through acquisitions, we have built deep consulting expertise in business of the Company was closed down in 2007,process management and the Company has no further operating activitiesenterprise resource planning particularly surrounding SAP software and is now a shell company.technology.

Going Concern
2.BASIS OF PRESENTATION:

The accompanying unaudited condensed consolidated financial statements have been prepared assumingby AMERI pursuant to the Company will continue as a going concern. The Company has concluded that it should look for acquisitions or identify a merger partner.  There can be no assurances that the Company will be successful in completing such a transaction or be able to maintain sufficient liquidity over a period of time that will allow it to carry out these actions, in which case the Company might be forced to liquidate or seek protection under the Federal bankruptcy statutes, or both.

The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverabilityrules and classification of assets or the amounts and classifications of liabilities that may result from the possible inabilityregulations of the Company to continue as a going concern.

The Company is quoted on the OTCQB of the OTC Marketplace under the symbol "SPZR".

Basis of presentation
The accompanying unauditedSEC regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial informationof America have been omitted pursuant to those rules and with instructionsregulations, although we believe that the disclosures made are adequate to Form 10-Q. Accordingly they do not include all ofensure the information and footnotes required by accounting principles generally acceptedpresented is not misleading.

The accompanying unaudited condensed consolidated financial statements reflect all adjustments (which were of a normal, recurring nature) that, in the United States for complete financial statements. In the opinion of management, all adjustments consideredare necessary for a fair presentation have been included. Operatingto present fairly our financial position, results of operations and cash flows as of and for the interim periodperiods 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 audited financial statements and notes thereto included in June 2015 Form 8-K.

- 6 -




AMERI HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


The results of operations for the three months ended March 31,June 30, 2015 are not necessarily indicative of the results that mayto 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.

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

3.BUSINESS COMBINATIONS:

Acquisition of Linear Logic Corporation: On April 1, 2015, the Company acquired all of the assets and liabilities of Linear Logics Corp. (referred to as "Linear" and "Linear Logics"), pursuant to the terms of a Share Purchase Agreement (the "Linear Acquisition"). Headquartered in Glen Mills, Philadelphia, Linear Logics Corporation is a leading provider of Supply Chain Management Solutions. Linear Logics was started by professionals with several decades of combined experience in Manufacturing, Planning, Logistics, and System Integration.  The unique capability of bridging the gap between the business process and the use of appropriate technology has been a driver to extract value from the customer Supply chain. Linear Logics is a SAP partner and has co-developed solutions for Sales and Operations Planning and Demand Management using SAP technology.

The Company determined the total allocable purchase price consideration to be $1.05 million. Purchase consideration is broken down into three parts namely, 1/3 cash, 1/3 stock, and 1/3 earn out. Out of the purchase consideration, $1 million was agreed to be paid in three instalments, 34% of which was paid at the time of signing the agreement, 33% was paid in May 2015 and final 33% to be paid in Jan 2016.
An earnout agreement was entered into in connection with the Linear Acquisition under which the former Linear shareholders are eligible to receive additional contingent consideration. Earnout consideration to be paid, if any, to Linear will be based upon the achievement of certain performance measures (and is not impacted by continued employment status) over two consecutive twelve-month earnout periods, concluding on April 1, 2017.
In connection with the Linear Acquisition, the Company made certain estimates related to the fair value of assets acquired, liabilities assumed, contingent earnout consideration and identified intangibles.

The Company performed a fair value allocation of the purchase price among assets, liabilities and identified intangible assets. The allocation of the purchase price was as follows:
   
  Total 
  (In Thousands) 
Accounts receivable $140,101 
Cash and cash equivalents  317,970 
Rent Deposits  2,500 
Accounts payable and accrued expenses  (219,968)
Products  814,522 
     
Total purchase price $1,055,125 

The Linear Acquisition was accounted for as a purchase transaction, and accordingly, the results of operations, commencing April 1, 2015, are included in the Company's accompanying consolidated statement of income.

- 7 -




AMERI HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


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 ("VSOE") 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 three- or six-month periods ended June 30, 2015 or 2014.
- 8 -




AMERI HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



5.SHARE-BASED COMPENSATION:

On April 20, 2015, our Board and the holder of a majority of our outstanding shares of common stock approved the adoption of our 2015 Equity Incentive Award 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 ("SARs"), 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. None of the shares were allocated during the period ended 30, June 2015.

6.INCOME TAXES:

The Company recorded a tax provision (benefit) of $43 thousand and $158 thousand for the three month periods ended June 30, 2015 and 2014, respectively. The reported tax provision (benefit) for the three month periods ended June 30, 2015 and 2014 are based upon an estimated annual effective tax rate of 28% and 28%, respectively. The effective tax rates 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 realizability 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.

As of both June 30, 2015 and March 31, 2015, no deferred tax asset valuation allowance balance was recorded.

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 June 30, 2015, 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 June 30, 2016. We remain subject to examination until the statute of limitations expires for each respective tax jurisdiction.


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 $6,250 and $6,250 during the three month periods ended June 30, 2015 and 2014, respectively. This amortization expense relates to customer lists, which expire through 2019.
- 9 -



AMERI HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Estimated annual amortization expense (including amortization expense associated with capitalized software costs) for the current year and the following four years ending March 31, is as follows:
  
Amortization
Expense
  (In Thousands)
 
 2016$25
 2017$25
 2018$25
 2019$18
  
As part of the Linear acquisition, the company acquired two products namely, Simple APO and IBP. The product was valued on the basis of the expected cash flow that will generated over its useful life. An amount of $814,522 has been recognised under Intangible assets. The acquired products are undergoing further enhancements and hence has not been subjected to amortization. The amortization for the products will commence once it is ready for use.
Apart from this, the company had its own product namely, Langer Index for which we are designing an App. Cost incurred for building the App during the period ended June 30, 2015 was $ 163,893.
8.ACCRUED EXPENSES AND OTHER LIABILITIES:

Accrued expense and other liabilities as of June 30, 2015 consisted of the following:
   
  
June 30,
2015
 
   
Accrued bonuses $18,000 
Audit Fee Payable  7,500 
Accrued payroll related liabilities  7,024 
Other accrued expenses  55,000 
Acquisition Instalment Payable330,000
     
Total $442,524 
     
- 10 -



AMERI HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
9.FAIR VALUE MEASUREMENT:

We utilize the following valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.
Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value.

A financial asset or liability's classification within the hierarchy is determined based upon the lowest level input that is significant to the fair value measurement.

As of June 30, 2015 our financial assets and liabilities required to be measured on a recurring basis were our money market investments.

The following table represents the Company's fair value hierarchy for its financial assets and liabilities required to be measured on a recurring basis:
     
 Basis of Fair Value Measurements 
 Balance 
Quoted Prices
in Active Markets
for Identical Items
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
 (In Thousands) 
Balance at June 30, 2015:    
Financial assets:    
Money market investment $93  $93  $—  $— 
                 
Total financial assets $93  $93  $—  $— 
                 
No financial instruments were transferred into or out of Level 3 classification during the three month periods ended June 30, 2015 and 2014.
- 11 -



AMERI HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


10.   NET INCOME (LOSS) PER SHARE

A reconciliation of net income and weighted average shares used in computing basic and diluted net income per share is as follows:
     
  
Three Months Ended
June 30,
 
  2015  2014 
  (In Thousands, Except Per Share Data) 
     
Basic net income (loss) per share:    
Net income (loss) applicable to common shares $111  $408 
         
Weighted average common shares outstanding  11,055   9,992 
         
Basic net income (loss) per share of common stock $0.01  $0.04 
         
         
Diluted net income (loss) per share:        
Net income (loss) applicable to common shares $111  $408 
         
Weighted average common shares outstanding  11,055   9,992 
Dilutive effects of convertible debt, stock options and warrants  5,611   - 
         
Weighted average common shares, assuming dilutive effect of stock options  16,666   9,992 
         
Diluted net income (loss) per share of common stock $0.01  $0.04 
         

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 June 30, 2015, there were approximately one hundred thousand share-based awards outstanding, respectively, under the Company's equity plans. Following the closing of the Merger and the Private Placement, the Board approved the grant of stock options to purchase a total of 100,000 shares of our restricted stock units, consisting of initial grants of stock options to purchase 25,000 shares of restricted stock units to each of the four independent directors. The stock options vest on the first anniversary of the grant date and are exercisable at $2.00 per share, which is in excess of the intrinsic common stock price per share in the Private Placement.
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AMERI HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



11.   COMMITMENTS AND CONTINGENCIES

Operating Lease

The Company's principal facility is located in Princeton, New Jersey. The Company also leases office space in various locations with expiration dates between 2015 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 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 $10,812 and $3,312 for the three months ended June 30, 2015 and 2014.The increase is due to additional office spaces that was added due to acquisition of Linear Logics Corp.

The Company has entered into an operating lease for its office facility expiring through July 2017. The future minimum rental payments under these lease agreements are as follows:
 Years ending March 31,      (In Thousands)
   
2016 $60 
2017  60 
2018  20 
   Total $140 










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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.

 Business Overview

AMERI is a strategic consulting firm that brings a synergistic blend of specialty services to drive transformational change that (1) improves process, (2) reduces costs and (3) increases revenue. Our solutions are tailored to the C-level executives in the upper mid-market and Global 2000.

We deliver our services across a broad range of industries. We work onsite/offshore with our clients, providing a full spectrum of services in the following areas: classic consulting and product-based consulting, primarily in enterprise performance management / Business Intelligence ("EPM/BI") and enterprise resource planning ("ERP").
The Company's business strategy is to seek to enhance the growth and profitability of its operations through organic growth and selective acquisitions of targets which it believes could increase stockholder value.

Our Services

Ameri has an expertise is an array of solutions/services for our clients:

·Demand Management
·Enterprise Architecture
·Predictive Analytics
·Enterprise Mobility
·Lean Enterprise Architecture Partner
·Sales and Operations Planning
·Supply Chain Management
·Business Process Management
·HANA Competency 
·Technology and Support

AMERI has the proven expertise to plan, deliver and manage integration services that improve performance and maximize business results.

We focus on deploying new systems and unlocking the value of the existing corporate assets. This expertise enables us to bring complex technologies and systems together while minimizing risk, leveraging our clients' technology investments and delivering tailored solutions.
Our consultants are expected to travel and to be onsite with the customer to provide the highest level of service and support in all of these endeavors. We provide varying degrees of customer project assistance and will incorporate customer resources for technology transfer or cost optimization purposes. Independent teams and proper project process and delineation provide conflict-free transition points among all key service offerings as well as independent entry points.
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Factors Influencing Our Results of Operations

Revenue . The Company derives its service revenue from time and materials-based contracts and fixed-price contracts. Time and materials-based contracts represented 72.23% and 37.46% of service revenue for the three month periods ended June 30, 2015 and 2014, respectively. Revenue under time and materials contracts is recognized as services are rendered and performed at contractually agreed upon rates. Fixed-price contracts represented 27.77% and 62.5% of service revenue for the three month periods ended June 30, 2015 and 2014, respectively. Revenue pursuant to fixed-price contracts is recognized under the proportional performance method of accounting.

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 (or be less than) our original estimate, as a result of an increase (or decrease) 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.

We continue to expand our sales across each of our service offerings and have a number of engagements in the pipeline that will provide us with a healthy revenue increase visibility entering the third quarter of 2015.

Operating Expenses. The largest portion of our operating expenses consists of cash compensation and benefits associated with our project consulting personnel and related expenses. Project personnel expenses also consist of payroll costs and related benefits associated with our professional staff. Other related expenses include travel, subcontracting costs, third-party vendor payments and non-billable expenses associated with the delivery of services to our customers. We consider the relationship between project personnel expenses and service revenue to be an important measure of our operating performance. The relationship between project personnel expenses and service revenue is driven largely by the chargeability of our consultant base, the prices we charge our customers and the non-billable costs associated with securing new customer engagements and developing new service offerings. The remainder of our recurring operating expense is composed of expenses associated with the development of our business and the support of our customer-serving professionals, such as professional development and recruiting, marketing and sales, and management and administrative support. Professional development and recruiting expenses consist primarily of recruiting and training content development and delivery costs. Marketing and sales expenses consist primarily of the costs associated with the development and maintenance of our marketing materials and programs. Management and administrative support expenses consist primarily of the costs associated with operations, including finance, information systems, human resources, facilities (including the rent of office space) and other administrative support for project personnel.

We regularly review our fees for services, professional compensation and overhead costs to ensure that our services and compensation are competitive within the industry and that our overhead costs are balanced with our revenue levels. In addition, we monitor the progress of customer projects with customer senior management. We manage the activities of our professionals by closely monitoring engagement schedules and staffing requirements

Company Performance Measurement Systems and Metrics . The Company's management monitors and assesses its operating performance by evaluating key metrics and indicators on an ongoing basis.
Results for the Three Months Ended June 30, 2015, Compared to Results for the Three Months Ended June 30, 2014

The financial information that follows has been rounded in order to simplify its presentation. The amounts and percentages below have been calculated using the detailed financial information contained in the unaudited condensed consolidated financial statements, the notes thereto, and the other financial data included in this Quarterly Report on Form 10-Q.

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The following table sets forth the percentage of total revenue of items included in our unaudited condensed consolidated statements of operations:
     
  
Three Months Ended
June 30,
 
  2015  2014 
Revenue:    
Projects revenue  42.03%  61.61%
Professional & Enterprise Services revenue  57.97%  38.39%
         
Total revenue  100.0%  100.0%
         
Cost of revenue:        
Consulting Services Paid  75.00%  72.96%
         
Total cost of revenue  75.00%  72.96%
         
Gross profit  25.00%  27.04%
         
Operating expenses:        
Selling, general and administrative  12.46%  12.95%
Direct acquisition  7.76%  —%
         
Total operating expenses  20.22%  12.95%
         
Operating income (loss)  4.77%  14.40%
         
Other expense (income), net  0.85%  0.21%
         
Income (loss) before income taxes  3.92%  14.18%
Income tax (benefit) provision  1.10%  1.36%
         
Net income (loss)  2.82%  12.82%
 
Revenue. Total revenue decreased marginally by $62,388, to $3.93 million during the three-month period ended June 30, 2015, compared to total revenue of $3.99 million in the three-month period ended June 30, 2014.

The number of customers the Company served during the three-month period ended June 30, 2015 totalled to 12, as compared to 7 customers during the three-month period ended June 30, 2014. During the quarter ended June 30, 2015, we secured first-time engagements with a total of 2 new customers. Acquisition of Linear has brought in 3 new customers to serve during the quarter ended June 30, 2015.
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Cost of Revenue. Cost of revenue primarily consists of consulting charges paid. Cost of revenue increased by a marginal percentage due to the increase in consulting services paid year over year.
Gross Profit. During the three-month period ended June 30, 2015, total gross profit decreased by $97,315, to $0.98 million compared to gross profit of $1.07 million in the three-month period ended June 30, 2014.

Selling, General and Administrative ("SG&A") Expenses. As a percentage of total revenue, SG&A expenses were 12.46% and 12.95% during the three-month periods ended June 30, 2015 and June 30, 2014 respectively.

Direct Acquisition Costs.  During the quarter ended June 30, 2015, the Company was reverse merged into a public shell Company and the cost of reverse merger amounted to $ 304,924. Incurred expenses included
advisory and legal fees directly associated with completion of the reverse merger. No such costs were incurred by the Company during the corresponding period in 2014.

Depreciation and Amortization Expense . Depreciation and amortization expense for the quarter ended June 30, 2015 was $ 8,048 as against $ 8,572 as depreciation expenses for the quarter ended June 30, 2014. Amortization expense for the quarter ended June 30, 2015 and June 30, 2014 remained at $ 6250 towards the amortization of the value of customer list acquired from Winhire.

Operating Income . Operating income was $187,865 in the quarter June 30, 2015, compared to operating income of $575,173 in the comparative 2014 quarterly period.
The 2015 second quarter and year-to-date decrease in operating metrics are primarily attributable to the increase in acquisition expenses as compared to the year ending2014.

Income Tax Provision. We recorded a provision (benefit) for income taxes of $43,489 and $158,236 during the three -month periods ended June 30, 2015 and June 30, 2014 respectively. Our periodic income tax provision amounts are derived based upon an estimated annual effective income tax rate, inclusive of federal and state income taxes.

Net Income. We generated net income of $ 110,969 and $ 408,365 during the three- month periods ended June 30, 2015 and June 30, 2014 respectively.

Liquidity and Capital Resources

The following table summarizes our cash flow activities for the periods indicated:
   
 
Three Months Ended
June 30,
 
 2015 2014 
 (In Thousands) 
Cash flows provided by (used in):  
Operating activities $(842,024) $232,650.650 
Investing activities  (640,528)  (160,296)
Financing activities  5,034,521   125,000 
         
Total cash provided by (used in) the period $3,551,969  $197,354555 
         
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Cash flow from operating activities is driven by collections of fees for our consulting services. Cash used in operations predominantly relates to employee compensation and payments to third-party service providers. Accrued payroll and related liabilities fluctuate from period to period based on the timing of our normal payroll cycle and the timing of variable compensation payments.

Accounts payable and accrued expenses are most significantly impacted by the timing of payments required to be made to third-party service providers.

Net cash used in investing activities was $640,548 during the three-month period ended June 30, 2015, compared to net cash used in investing activities of $160,296 in the three-month period ended June 30, 2014. Cash used in investing activities in the three-month periods ended June 30, 2015 consisted of the Linear Acquisition and, to a lesser extent, the purchases of equipment. Cash used in investing activities in the three-month periods ended June 30, 2014 included the purchases of equipment and acquisition of Winhire Inc.

All capital expenditures are discretionary as the Company currently has no long-term commitments for capital expenditures.

Net cash provided by financing activities was $5,034,521 in the three-month period ended June 30, 2015, compared to net cash provided by financing activities of $ 125,000 in the three-month period ended June 30, 2014.

Acquisitions:

Acquisition of Linear: As more fully described in "Item 1 – Financial Statements – Notes to the Unaudited Condensed Consolidated Financial Statements – Note 3", included elsewhere herein, an earnout agreement was entered into in connection with the Linear Acquisition under which Linear is eligible to receive additional contingent consideration. Contingent earnout consideration to be paid, if any, to Linear will be based upon the achievement of certain performance measures over three consecutive quarter earnout periods, concluding on December 31, 2015.

For further information, refer to the financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2014.Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

 Critical Accounting Policies and Estimates
The preparation of
We prepare our unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requiresof America. As such, we are required to make certain estimates, judgments and assumptions that management makewe believe are reasonable based upon the information available. These estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.periods presented. We reaffirm the critical accounting policies and estimates as reported in our June 2015 Form 8-K, which was filed with the Securities and Exchange Commission on June 1, 2015. Additionally, we have added the following critical accounting policies and estimates during the first half of 2015:

Cash Equivalents
ForPurchase Price Allocation. We allocate the purposespurchase 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 statementsitems, including accounts receivable, property and equipment, other intangible assets, certain accrued liabilities and other reserves require a degree of cash flows,management judgment. Certain estimates may change as additional information becomes available. Goodwill is assigned at the Company considers all highly liquid cash investments that mature in three months or less when purchased, to be cash equivalents. Cash equivalents are stated at cost, which approximates fair value.

Stock Options
Compensation cost relating to stock-based payments, including grantsenterprise level and is deductible for tax purposes for certain types of employee stock options, is recognized in financial statements based onacquisitions. Management finalizes the fair valuepurchase price allocation within the defined measurement period of the equity instruments issued on the grant date.  The Company recognized the fair value of stock-based compensation awardsacquisition date as compensation expense in its statement of operations on a straight line basis, over the vesting period.certain initial accounting estimates are resolved.
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SPATIALIZER AUDIO LABORATORIES, INCValuation of Contingent Earnout Consideration.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
March 31, 2015 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 earnout criteria. Any changes in the estimated fair value of contingent consideration may have a material impact on our operating results.

Income Taxes
Income taxes are provided under the asset and liability method and reflect the net tax effects of temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. The Company establishes valuation allowances when the realization of specific deferred tax assets is subject to significant uncertainty. The Company records no tax benefits on its operating losses, as the losses will have to be carried forward and realization of any benefit is uncertain. Recent Accounting Pronouncements

Earnings Per Share
Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Since the Company generated net losses in each of the periods presented, outstanding stock options would have been anti-dilutive and were not considered in these calculations.

Fair Value of Financial Instruments
The carrying values of the Company's current assets and liabilities approximated fair value due to their short maturity or nature.

Recently Issued Accounting Pronouncements
In AugustMay 2014, the Financial Accounting Standards Board ("FASB")(FASB) issued Accounting Standards Update ("ASU")No. 2014-09,  Revenue from Contracts with Customers (Topic 606) (ASU 2014-09). ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new guidance is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016; early adoption is not permitted. Entities have the option of using either a full retrospective or a modified approach to adopt the guidance. This update could impact the timing and amounts of revenue recognized. The Company is currently evaluating the effect that implementation of this update will have on its consolidated financial position and results of operations upon adoption.

In August 2014, FASB issued Accounting Standards Update No. 2014-15, " Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern " (ASU 2014-15), which providesto provide guidance under U.S. GAAP abouton management's responsibility to evaluatein evaluating whether there is substantial doubt about an entity'sa company's ability to continue as a going concern and to provide related footnote disclosures. In doing so, the amendments should reduce diversity in the timing and content of footnote disclosures. The ASU is effective for2014-15 applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Earlythereafter, with early adoption is permitted. The adoption of ASU No. 2014-15 is not expected to have a significantmaterial impact on our financial position, results of operations or cash flows.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the Company's financial statements in this Quarterly Report on Form 10-Q and related disclosures.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.
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2. INCOME TAXES

At March 31,The forward-looking statements included in this Form 10-Q and referred to elsewhere are related to future events or our strategies or future financial performance, including statements concerning our 2015 outlook, future revenue and growth, customer spending outlook, general economic trends, IT service demand, future revenue and revenue mix, utilization, new service offerings, significant customers, competitive and strategic initiatives, growth plans, potential stock repurchases, future results, tax consequences and liquidity needs. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "believe," "anticipate," "anticipated," "expectation," "continued," "future," "forward," "potential," "estimate," "estimated," "forecast," "project," "encourage," "opportunity," "goal," "objective," "could," "expect," "expected," "intend," "plan," "planned," or the Company had net operatingnegative 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 carry-forwardsof one or more key executives and/or employees; (3) changes in industry trends, such as a decline in the demand for Federal income tax purposesEnterprise 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 be availableimpact our accounting assumptions; (9) inability to offset future Federal taxable income, if any. These net operating loss carry forwards are subjectrecruit and retain professionals with the high level of information technology skills and experience needed to an annual limitation and utilization of these loss carryforwards is subjectprovide our services; (10) failure to further limitation as a result of changeexpand outsourcing services to generate additional revenue; (11) any changes in ownership of the Company as defined by Federal tax law. Management believes these loss-carryforwards will likely not be fully realized.

The Company's income tax returns remain subject to examination for the years 2011 through 2014 for federal and state purposes.


3. STOCK OPTION PLAN

There are no outstanding stock options as of March 31, 2015.
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SPATIALIZER AUDIO LABORATORIES, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
March 31, 2015



4. STOCKHOLDERS' EQUITY

On January 15, 2014, the Company issued 3,267,974 shares of common stock to Lone Star Value Investors, LP, an entity controlled byor otherwise that would result in a former director and officerlimitation of the Company, for cash proceeds of $50,000.  The proceeds of this issuance are used to assist in fundingnet operating loss carry forward under applicable tax laws; (12) the Company's operating expenses.


 5. SUBSEQUENT EVENTS

On April 17, 2015, the Company issued a Promissory Note (the "Note") in the principal amount of $50,000 to Lone Star Value Investors, LP. Under the termsfailure of the Note, interest on the outstanding principal amount accrues at a rate of 10% per annum,marketplace to embrace advisory and all amounts outstanding under this Note are dueproduct-based consulting services; and payable on or before April 30, 2020. The Company intends to use the proceeds for legal and operating expenses.

 On April 20, 2015, the Board of Directors of the Company was granted discretionary authority to implement a reverse stock split of the outstanding shares of common stock on the basis of one post-reverse split share for up to every 18 pre-reverse split shares to occur as soon as practicable, with the exact time of the reverse stock split and the exchange ratio of the reverse split to be determined by the Board of Directors of the Company.  A proposed 1-for-18 reverse stock split of the outstanding shares of common stock would reduce the outstanding shares of common stock from 15,409,999 shares to approximately 875,000 shares.

The Board of Directors was also granted discretionary authority to file a Certificate of Amendment of the Certificate of Incorporation that will decrease the authorized number of shares of the Company's common stock to 100,000,000 shares. The Board was also granted discretionary authority to file a Certificate of Amendment of the Certificate of Incorporation that will change the name of the Company to AMERI Holdings, Inc. Further the Board of Directors was granted discretionary authority to adopt the 2015 Equity Incentive Award Plan (the "Plan") and granted discretionary authority to the executive officers to implement and administer the Plan.


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SPATIALIZER AUDIO LABORATORIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
March 31, 2015
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
FORWARD-LOOKING STATEMENTS

This Management's Discussion and Analysis and other parts of this report contain forward-looking(13) changes in our utilization levels. In evaluating these statements, that involve risks and uncertainties, as well as current expectations and assumptions. From time to time, the Companyyou should specifically consider various factors described above. These factors may publish forward-looking statements, including those that are contained in this report, relating to such matters as anticipated financial performance, business prospects, technological developments, new products, research and development activities and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause the Company'sour actual results and experience to differ materially from those contemplated, projected, anticipated, planned or budgeted in any such forward-looking statements.

Although we believe that the anticipated results or other expectations expressed in the Company's forward-looking statements. The risks and uncertainties that may affect the operations, performance, development and results of the Company's business include, butstatements are not limited to, its ability to maintain sufficient working capital, adverse changes in the economy, the ability to attract and maintain key personnel, its ability to identify or complete an acceptable merger or acquisition, andreasonable, we cannot guarantee future results, related to acquisition, mergerlevels of activity, performance, growth, earnings per share or investment activities. The Company's actual results could differ materially from those anticipated in these forward-looking statements, including those set forth elsewhere in this report. The Companyachievements. 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 suchof the forward-looking statements.

CRITICAL ACCOUNTING POLICIES AND COMMENTS RELATED TO OPERATIONS

This discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in after the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

There have been no material changes or developments in the Company's evaluation of the accounting estimates and the underlying assumptions or methodologies that it believes to be Critical Accounting Policies and Estimates as disclosed in its Form 10-K for the year ended December 31, 2014.

Management's Discussion included in the Form 10-K for the year ended December 31, 2014 includes discussion of various factors and items related to the Company's results of operations and liquidity. There have been no other significant changes in most of the factors discussed in the Form 10-K other than those indicated within the section "Subsequent Events" within Item 1 above. Many of the items discussed in the Form 10-K are relevant to 2015 operations; thus the readerdate of this report should read Management's Discussion included in Form 10-K for the year ended December 31, 2014 and Informational Statements filed in May 2015.
RESULTS OF OPERATIONS

Revenues
Revenues for the three months ended March 31, 2015 were zero, since all operations were discontinued as of September 30, 2007.

General and Administrative
General and administrative expenses for the three months ended March 31, 2015 and March 31, 2014 were $2,300 and $7,584, respectively.  The decrease is due10-Q to decreased legal fees.
- 8 -
conform such statements to actual results.



SPATIALIZER AUDIO LABORATORIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
March 31, 2015

LIQUIDITY AND CAPITAL RESOURCES

The Company has undertaken steps to reduce its expenses and improve the Company's liquidity, including the previous sale and discontinuance of all operations.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. However, the Company currently has no operating activities. There can be no assurances that the Company will be able to successfully complete a merger or acquisition or be able to maintain sufficient liquidity to continue to seek a merger or acquisition, in which case the Company might be forced to liquidate or seek protection under the Federal bankruptcy statutes, or both.

Net cash used by operating activities during the three months ended March 31, 2015 was $1,187 compared to $27,779 in the comparable period of 2014. The decrease was due to a decrease in accounts payable and accrued liabilities during the quarterly period ended March 31, 2014 and a decrease in the net loss in 2015 as compared to 2014.


 ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 3.   Quantitative
The impact of inflation and Qualitative Disclosures About Market Riskchanging prices has not been material on revenue or income from continuing operations during the three- or six-month periods ended June 30, 2015 and 2014.


Not applicable.
 ITEM 4.CONTROLS AND PROCEDURES

 Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, which we have designed to ensure that material information related to the Company, including our consolidated subsidiaries, is properly identified and evaluated on a regular basis and disclosed in accordance with all applicable laws and regulations. The Chairman, President and Chief Executive Officer and the Chief Financial Officer of AMERI HOLDINGS, Inc. (its principal executive officer and principal financial officer, respectively) have concluded, based on their evaluations of the Company's disclosure controls and procedures as of the end of the period covered by this report, that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company's management as appropriate to allow timely decisions regarding required disclosure.
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Item 4.   Risk
 Changes in Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures.  The Principal Executive Officer and Principal Financial Officer evaluated the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to the Principal Executive Officer and Principal Financial Officer to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

(b) Changes in Internal Control over Financial Reporting. There were no changes in the Company's internal controls over financial reporting, known to the Principal Executive Officer and Principal Financial Officer,that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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SPATIALIZER AUDIO LABORATORIES, INC.
OTHER INFORMATION
March 31, 2015
PART II - OTHER INFORMATION


There were no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. It should be noted that a change in the Company's certifying account occurred upon the close of the Merger and was originally disclosed within Item 4.01 of the June 2015 Form 8-K

 PART II – OTHER INFORMATION
Item 1. Legal Proceedings

None.
 ITEM 1.LEGAL PROCEEDINGS
 

There were no legal proceedings against the Company during the three-month period ended June 30, 2015.
Item 1a. Risk Factors
 ITEM 1A.RISK FACTORS

In additionevaluating us and our common stock, we urge you to carefully consider the risks and other information set forth in this Quarterly Report stockholders should carefully consideron Form 10-Q, as well as the risk factors discusseddisclosed in Item 1A, Risk Factors,2.1 of our Annualthe Current Report on Form 10-K8-K for, which we filed with the year ended December 31, 2014, which could materially affect our business, financial condition or future results.SEC on June 1, 2015. The risks and uncertainties described under "Risks Related to Our Common Stock" and "Risks Relating to Our Business and Industry" within the June 2015 8-K have not materially changed. Any of the risks discussed in our Annualthis Quarterly Report on Form 10-K are not10-Q or any of the only risks facingdisclosed in Item 2.1 of the Company. Additional risks and uncertainties not currently known to usJune 2015 Form 8-K under "Risk Factors" or that we currently deem to be immaterial, also maycould materially and adversely affect our business,results of operations or financial condition and/or operating results.condition. The risks and uncertainties described under "Risks Related to Our Common Stock" and "Risks Relating to Our Business and Industry" disclosed in Item 2.1 of the June 2015 Form 8-K as well as the "Special Note Regarding Forward-Looking Statements" contained within this quarterly report should be given special close attention. Investors should be aware of certain risks, uncertainties and assumptions in our business.


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.As previously disclosed on the Current Report within the June 2015 Form 8-K, filed with the SEC on June 1, 2015, on May 26, 2015, we completed a "reverse merger" transaction (the "Merger").  In connection with the Merger, the Company issued certain unregistered securities in an exempt private placement, as further described in Item 3.02 of the June 2015 Form 8-K.

Concurrently with the closing of the Merger, we issued a 5% Unsecured Convertible Note due May 26, 2017, in the principal amount of $5,000,000, together with a warrant ("The Warrant") to purchase shares of our common stock, in a private placement to Lone Star Value Investors, LP ("Lone Star Value") pursuant to the terms of a Securities Purchase Agreement, dated as of May 26, 2015.

The Warrant gives Lone Star Value the right to purchase up to 2,777,777 shares of common stock (equivalent to 100% warrant coverage in respect of the shares underlying the Convertible Note) at an exercise price equal to $1.80 per share.  The Warrant may be exercised on a cashless-exercise basis, meaning that, upon exercise, the holder would make no cash payment to us, and would receive a number of shares of our common stock having an aggregate value equal to the excess of the then-current market price of the shares issuable upon exercise of the Warrant over the exercise price of the Warrant.  The Warrant will expire on May 26, 2020.
 
We received gross proceeds from the private placement of $5,000,000.  No placement agent or other financial intermediary was engaged or compensated in connection with the Private Placement.
The Convertible Note and Warrant (and their underlying shares of common stock) issued in the Private Placement were exempt from registration under Section 4(a)(2) of the Securities Act as a sale by an issuer not involving a public offering.  None of the Convertible Note or Warrant, or shares of our common stock underlying the Convertible Note and Warrant, were registered under the Securities Act, or the securities laws of any state, and were offered and sold in reliance on the exemption from registration afforded by Section 4(a)(2) and corresponding provisions of state securities laws, which exempts transactions by an issuer not involving any public offering.  Such securities may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements and certificates evidencing such shares contain a legend stating the same.


Item 3. Defaults Upon Senior Securities
ITEM 3.DEFAULTS UPON SENIOR SECURITIES

None.
 

Item 4. Mine Safety Disclosures
ITEM 4.MINE SAFETY DISCLOSURES

Not applicable.
 

Item 5. Other Information
 ITEM 5.OTHER INFORMATION

On April 17, 2015, the Company issued a Promissory Note (the "Note") in the principal amount of $50,000 to Lone Star Value Investors, LP. Under the terms of the Note, interest on the outstanding principal amount accrues at a rate of 10% per annum, and all amounts outstanding under this Note are due and payable on or before April 30, 2020. The Company intends to use the proceeds for legal and operating expenses.

 On April 20, 2015, the Board of Directors of the Company was granted discretionary authority to implement a reverse stock split of the outstanding shares of common stock on the basis of one post-reverse split share for up to every 18 pre-reverse split shares to occur as soon as practicable, with the exact time of the reverse stock split and the exchange ratio of the reverse split to be determined by the Board of Directors of the Company.  A proposed 1-for-18 reverse stock split of the outstanding shares of common stock would reduce the outstanding shares of common stock from 15,409,999 shares to approximately 875,000 shares.

None.
The Board of Directors was also granted discretionary authority to file a Certificate of Amendment of the Certificate of Incorporation that will decrease the authorized number of shares of the Company's common stock to 100,000,000 shares. The Board was also granted discretionary authority to file a Certificate of Amendment of the Certificate of Incorporation that will change the name of the Company to AMERI Holdings, Inc. Further the Board of Directors was granted discretionary authority to adopt the 2015 Equity Incentive Award Plan (the "Plan") and granted discretionary authority to the executive officers to implement and administer the Plan.
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Many of the items discussed in the Schedule 14C are relevant to shareholder's ownership and rights; thus the reader of this report should fully read the information contained within the Schedule 14C filed on May 6, 2015.
ITEM 6.EXHIBITS
 
Item  6.
Exhibits:
The following exhibits are filed as part of this report:

31.1Exhibit Number CEO Description
2.1Agreement of Merger and Plan of Reorganization, dated as of May 26, 2015, among Spatializer Audio Laboratories, Inc., Ameri100 Acquisition, Inc. and Ameri & Partners Inc. (filed as Exhibit 2.1 to AMERI Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on May 26, 2015 and incorporated herein by reference).
3.1Certificate of Amendment  of 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 May 26, 2015 and incorporated herein by reference)
3.2By-laws of AMERI Holdings, Inc. (incorporated by reference to the company's Registration Statement on Form S-1, Registration No. 33-90532, effective August 21, 1995).
4.1Form 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)
4.2Form 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)
10.1Securities Purchase Agreement, dated as of May 26, 2015, by and between AMERI Holdings, Inc. and Lone Star Value Investors, LP. (filed as Exhibit 10.1 to AMERI Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on June 1, 2015 and incorporated herein by reference)
10.2Registration Rights Agreement, dated as of May 26, 2015, by and between AMERI Holdings, Inc. and Lone Star Value Investors, LP. (filed as Exhibit 10.2 to AMERI Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on June 1, 2015 and incorporated herein by reference)
10.3Stock Purchase Agreement by and between AMERI Holdings, Inc. and the shareholders of Ameri Consulting Service Private Limited. (filed as Exhibit 10.3 to AMERI Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on June 1, 2015 and incorporated herein by reference)
10.4Employment Agreement, dated as of May 26, 2015, between Giri Devanur and AMERI Holdings, Inc. (filed as Exhibit 10.4 to AMERI Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on June 1, 2015 and incorporated herein by reference)
10.5Employment Agreement, dated as of May 26, 2015, between Srinidhi "Dev" Devanur and AMERI Holdings, Inc. (filed as Exhibit 10.5 to AMERI Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on June 1, 2015 and incorporated herein by reference)
10.6Form of Indemnification Agreement. (filed as Exhibit 10.6 to AMERI Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on June 1, 2015 and incorporated herein by reference)
10.7Form of Option Grant Letter. (filed as Exhibit 10.7 to AMERI Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on June 1, 2015 and incorporated herein by reference)
10.82015 Equity Incentive Award Plan. (filed as Exhibit 10.8 to AMERI Holdings, Inc.'s Current Report on Form 8-K filed with the SEC on June 1, 2015 and incorporated herein by reference)
31.01Certification Pursuant to RuleRules 13a-14(a)/ and 15d-14(a) ofunder the Securities Exchange Act of 1934, as Amended.Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
   
31.231.02 CFO Certification Pursuant to RuleRules 13a-14(a)/ and 15d-14(a) ofunder the Securities Exchange Act of 1934, as Amended.Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
   
32.132.01* CEO Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
   
32.2101** CFO Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.Interactive Data Files.
_________________

 *Furnished herewith.
 
101**InteractiveIn accordance with Rule 406T of Regulation S-T, these interactive data files pursuantare 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 Rule 405 of Regulation S-T: (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Cash Flows and (iv) the Notes to Consolidated Financial Statements, tagged as blocks of text and in detail (XBRL).liability under those sections.

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SIGNATURES

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

  
SPATIALIZER AUDIO LABORATORIES, INC.
(Registrant)
May 14, 2015 
/s/ Kyle Hartley
  Kyle Hartley
  President and Chief Executive Officer
/s/ Kyle Hartley
Kyle Hartley
Chief Financial Officer




.
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INDEX TO EXHIBITS

Exhibit No.DescriptionAMERI HOLDINGS, INC.
   
31.1Date: August 14 2015 CEO Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as Amended.s/ Giri Devanur
Giri Devanur
President and Chief Executive Officer
( Principal Executive Officer )
   
31.2Date: August 14, 2015 CFO Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as Amended.s/ Brunda Jagannath
   
32.1 CEO Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.Brunda Jagannath
   
32.2 CFO Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Cash Flows
VP Finance
( Principal Financial and (iv) the Notes to Consolidated Financial Statements, tagged as blocks of text and in detail (XBRL).Accounting Officer )
 
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
 

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