Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 03, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | AMERI Holdings, Inc. | |
Entity Central Index Key | 890,821 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 14,608,017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 1,812,600 | $ 1,379,887 |
Accounts receivable | 9,590,446 | 8,059,910 |
Investments | 82,908 | 82,908 |
Other current assets | 866,505 | 542,237 |
Total current assets | 12,352,459 | 10,064,942 |
Other assets: | ||
Property and equipment, net | 113,505 | 100,241 |
Intangible assets, net | 11,845,910 | 8,764,704 |
Acquired goodwill | 21,879,572 | 17,089,076 |
Deferred income tax assets, net | 3,488,960 | 3,488,960 |
Total other assets | 37,327,947 | 29,442,981 |
Total assets | 49,680,406 | 39,507,923 |
Current liabilities: | ||
Line of credit | 3,956,494 | 3,088,890 |
Accounts payable | 4,468,533 | 5,130,817 |
Other accrued expenses | 3,147,210 | 2,165,088 |
Bank Term Loan | 399,996 | 405,376 |
Consideration payable - Cash | 4,199,238 | 1,854,397 |
Consideration payable - Equity | 596,763 | 64,384 |
Dividend Payable | 499,965 | 0 |
Total current liabilities | 17,268,199 | 12,708,952 |
Long term liabilities: | ||
Convertible notes | 1,250,000 | 0 |
Bank Term Loan - Net of Current Portion | 1,023,474 | 1,536,191 |
Consideration payable - Cash | 3,375,000 | 2,711,717 |
Consideration payable - Equity | 11,993,723 | 10,887,360 |
Total Long-term Liabilities | 17,642,197 | 15,135,268 |
Total liabilities | 34,910,396 | 27,844,220 |
Stockholders' equity: | ||
Preferred stock, $0.01 par value; 1,000,000 authorized, 363,611 issued and outstanding as of March 31, 2017, and as of December 31, 2016 | 3,636 | 3,636 |
Common stock, $0.01 par value; 100,000,000 shares authorized, 14,579,417 and 13,885,972 issued and outstanding as of March 31, 2017 and December 31, 2016 respectively. | 145,794 | 138,860 |
Additional paid-in capital | 19,850,002 | 15,358,839 |
Accumulated deficit | (5,226,646) | (3,833,588) |
Accumulated other comprehensive income (loss) | 740 | (7,426) |
Non-Controlling Interest | (3,516) | 3,382 |
Total stockholders' equity | 14,770,010 | 11,663,703 |
Total liabilities and stockholders' equity | $ 49,680,406 | $ 39,507,923 |
UNAUDITED CONDENSED CONSOLIDAT3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 363,611 | 363,611 |
Preferred stock, shares outstanding (in shares) | 363,611 | 363,611 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 14,579,417 | 13,885,972 |
Common stock, shares outstanding (in shares) | 14,579,417 | 13,885,972 |
UNAUDITED CONDENSED CONSOLIDAT4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) [Abstract] | ||
Net revenue | $ 12,340,927 | $ 7,012,964 |
Cost of revenue | 9,039,577 | 5,365,561 |
Gross profit | 3,301,350 | 1,647,403 |
Operating expenses: | ||
Selling and marketing | 332,310 | 31,350 |
General and administration | 2,701,145 | 2,110,336 |
Acquisition related expenses | 209,344 | 375,405 |
Depreciation and amortization | 689,100 | 111,628 |
Operating expenses | 3,931,899 | 2,628,719 |
Operating income (loss): | (630,549) | (981,316) |
Interest expense | (90,806) | (113,746) |
Interest income/other income | 0 | 2,005 |
Other expense | (4,149) | (2,304) |
Total other income (expenses) | (94,955) | (114,045) |
Income (loss) before income taxes | (725,504) | (1,095,361) |
Income tax benefit (provision) | (2,020) | |
Net income (loss) after tax | (725,504) | (1,097,381) |
Dividend on Preference Shares | (499,965) | 0 |
Net income (loss) attributable to the Company | (1,225,469) | (1,097,381) |
Non-Controlling Interest | 3,516 | 0 |
Foreign exchange translation adjustment | 5,335 | (62,890) |
Net income (loss) | $ (1,216,618) | $ (1,160,271) |
Basic income (loss) per share attributable to the Company (in dollars per share) | $ (0.09) | $ (0.09) |
Diluted income (loss) per share attributable to the Company (in dollars per share) | $ (0.09) | $ (0.09) |
Basic weighted average number of shares (in shares) | 14,094,536 | 11,874,361 |
Diluted weighted average number of shares (in shares) | 14,094,536 | 11,874,361 |
UNAUDITED CONDENSED CONSOLIDAT5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flow from operating activities | ||
Net income/(loss) | $ (1,216,618) | $ (1,160,271) |
Adjustment to reconcile income/(loss) to net cash used in operating activities | ||
Depreciation and amortization | 689,100 | 111,628 |
Provision for Preference dividend | 499,965 | 0 |
Stock, option, restricted stock unit and warrant expense | 566,427 | 101,677 |
Foreign exchange translation adjustment | 5,335 | (62,890) |
Increase (decrease) in: | ||
Accounts receivable | (1,530,536) | (57,216) |
Other current assets | (324,267) | 24,983 |
Increase (decrease) in: | ||
Accounts payable and accrued expenses | 472,661 | 1,195,226 |
Net cash provided by (used in) operating activities | (837,933) | 153,137 |
Cash flow from investing activities | ||
Acquisition of intangible and fixed assets | (10,493) | (131,580) |
Acquisition consideration payable | (311,470) | (1,718,777) |
Investments | 0 | 82,908 |
Net cash used in investing activities | (321,963) | (1,767,449) |
Cash flow from financing activities | ||
Proceeds from bank and convertible notes | 1,599,507 | 241,451 |
Non-Controlling Interests | (6,898) | 0 |
Net cash provided by financing activities | 1,592,609 | 241,451 |
Net increase (decrease) in cash and cash equivalents | 432,713 | (1,372,861) |
Cash and cash equivalents as at beginning of the period | 1,379,887 | 1,878,034 |
Cash at the end of the period | $ 1,812,600 | $ 505,173 |
ORGANIZATION
ORGANIZATION | 3 Months Ended |
Mar. 31, 2017 | |
ORGANIZATION [Abstract] | |
ORGANIZATION | NOTE 1. ORGANIZATION: AMERI Holdings, Inc. is a fast-growing technology services company which provides SAP cloud, digital and enterprise services to clients worldwide. Headquartered in Princeton, New Jersey Ameri100 has offices in New York, Atlanta, Dallas, Phoenix, Kansas City, Folsom, and Toronto. The Company additionally has global delivery centers in India. With its bespoke engagement model, Ameri100 delivers transformational value to its clients across industry verticals. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2017 | |
BASIS OF PRESENTATION [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 disclosure notes 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. Our comprehensive income (loss) consists of net income (loss) plus or minus any periodic currency translation adjustments. The Company's year-end is December 31. Ameri and Partners Inc, the Company's wholly-owned operating subsidiary that was the accounting acquirer in connection with the Company's May 2015 reverse merger, changed its fiscal year end from March 31 to December 31 pursuant to the merger, so that all of the Company's subsidiaries' year-ends are consistent with the year-end of the Company. During first quarter of 2016, the Company erroneously classified approximately $1.5 million of expenses as general and administrative expenses which should have been classified as cost of revenue. The Company has corrected this error in the current filing. The reclassification did not change the Company’s net income or loss for the period reported. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 3 Months Ended |
Mar. 31, 2017 | |
BUSINESS COMBINATIONS [Abstract] | |
BUSINESS COMBINATIONS | NOTE 3. BUSINESS COMBINATIONS: Acquisition of Bellsoft, Inc. On November 20, 2015, we completed the acquisition of Bellsoft, Inc., 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. Following the acquisition, the name of Bellsoft, Inc. was changed to Ameri100 Georgia Inc. (“Ameri Georgia”). Ameri Georgia has operations in the United States, Canada and India. For financial accounting purposes, we recognized September 1, 2015 as the effective date of the acquisition. The total consideration for the acquisition of Ameri Georgia was $9,910,817, consisting of: (a) A cash payment in the amount of $3,000,000, which was paid at closing; (b) 235,295 shares of our common stock issued at closing; (c) $250,000 quarterly cash payments paid on the last day of each calendar quarter of 2016; (d) A $1,000,000 cash reimbursement paid 5 days following closing to compensate Ameri Georgia for a portion of its approximate cash balance as of September 1, 2015; (e) Approximately $2,910,817 paid within 30 days of closing in connection with the excess of Ameri Georgia’s accounts receivable over its accounts payable as of September 1, 2015; and (f) Earn-out payments of approximately $500,000 a year for 2016 and 2017, if earned through the achievement of annual revenue and earnings before interest taxes, depreciation and amortization (“EBITDA”) targets specified in the purchase agreement, subject to downward or upward adjustment depending on actual results. The earn-out for 2016 was 30% higher than the previously agreed targets, resulting in a higher than anticipated earn-out payment, and the excess of the 2016 earn-out payment over what was planned was made as an adjustment to our income statement. The valuation of Ameri Georgia was made on the basis of its projected revenues. The accounting acquisition date for Ameri Georgia was determined on the basis of the date when the Company acquired control of Ameri Georgia, in accordance with FASB codification ASU 805-10-25-6 for business combinations. That ASU provides that the date on which the acquirer obtains control of the acquiree generally is the date on which the acquirer legally transfers the consideration, acquires the assets, and assumes the liabilities of the acquiree—the closing date. However, the acquirer might obtain control on a date that is either earlier or later than the closing date. For example, the acquisition date precedes the closing date if a written agreement provides that the acquirer obtains control of the acquiree on a date before the closing date. An acquirer shall consider all pertinent facts and circumstances in identifying the acquisition date. The term sheet and the Share Purchase Agreement that were entered into by the Company and Ameri Georgia contained agreements by the parties that the Company acquired control of Ameri Georgia's accounts payable, accounts receivable and business decisions as of September 1, 2015. In addition, on that date, the Company became responsible for performance of Ameri Georgia's existing contracts. Accordingly, the Company has recognized September 1, 2015 as the accounting acquisition date. The total purchase price of $9,910,817 Acquisition of Bigtech Software Private Limited On June 23, 2016, we entered into a definitive agreement to purchase Bigtech Software Private Limited ("Bigtech") The acquisition of Bigtech was effective as of July 1, 2016, and the total (a) A cash payment in the amount of $340,000 which was due within 90 days of closing and was paid on September 22, 2016; (b) Warrants for the purchase of 51,000 shares of our common stock, with such warrants exercisable for two years; and (c) $255,000, which may become payable in cash earn-outs to the sellers of Bigtech, if Bigtech achieves certain pre-determined Revenue and EBITDA targets in 2017 and 2018. Bigtech’s financial results are included in our condensed consolidated financial results starting July 1, 2016. The Bigtech acquisition did not constitute a significant acquisition for the Company. The valuation of Bigtech was made on the basis of its projected revenues. The total purchase price of $850,000 was allocated to intangibles of $595,000, taking into consideration projected revenue from the acquired list of Bigtech customers over a period of three years, and goodwill. The excess of total purchase price over the intangibles allocation has been allocated to goodwill. The Bigtech acquisition did not constitute a significant acquisition for the Company. Acquisition of Virtuoso On July 22, 2016, we, through wholly-owned acquisition subsidiaries, acquired all of the outstanding membership interests of Virtuoso, L.L.C. ("Virtuoso") he sole member of Virtuoso (the "Sole Member") The total purchase price paid to the Sole Member for the acquisition of Virtuoso was $1,831,881consisting 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) 101,250 shares of our common stock at closing; and (c) Earn-out payments in cash and stock of $450,000 and approximately $560,807, respectively, to be paid, if earned, in 2017, 2018 and 2019. The valuation of Virtuoso was made on the basis of its projected revenues. The Virtuoso earn-out payment for 2016 amounted to $64,736 in cash and 12,408 shares of common stock. The total purchase price of $1,831,881 Acquisition of DC&M On July 29, 2016, we acquired 100% of the membership interests of DC&M Partners, L.L.C. ("DCM") a SAP-certified software partner, having launched its SAP reporting, extraction and distribution tool called “IRIS”. DCM services clients in diverse industries, including retail, apparel/footwear, third-party logistics providers, chemicals, consumer goods, energy, high-tech electronics, media/entertainment and aerospace. The aggregate purchase price for the acquisition of DCM was $15,816,000 consisting of: (a) A cash payment in the amount of $3,000,000 at closing; (b) 1,600,000 shares of our common stock, which are to be issued on July 29, 2018 or upon a change of control of our 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. The total purchase price of $15,816,000 Payment of the DCM earn-out for 2016 was due on April 10, 2017 but has not yet been paid. We are currently in discussions with the former members of DCM regarding the timing and amount of the earn-out payment. The valuation of DCM was made on the basis of its projected revenues. Acquisition of ATCG On March 10, 2017, we acquired 100% of the shares of ATCG Technology Solutions, Inc. ("ATCG"), a Delaware corporation, pursuant to the terms of a Share Purchase Agreement among the Company, ATCG, all of the stockholders of ATCG (the "Stockholders"), and the Stockholders' representative. ATCG provides U.S. domestic, offshore and onsite SAP consulting services and has its main office in Folsom, California. ATCG specializes in providing SAP Hybris, SAP Success Factors and business intelligence services. The aggregate purchase price for the acquisition of ATCG of $8,784,533, consisting of: (a) 576,923 shares of our common stock; (b) Unsecured promissory notes issued to ATCG's selling Stockholders for the aggregate amount of $3,750,000 (which notes bear interest at a rate of 6% per annum with a payment schedule of 50% on December 31, 2017 and 50% on June 30, 2018); (c) Earn-out payments in shares of our common stock (up to an aggregate value of $1,200,000 worth of shares) to be paid, if earned, in each of 2018 and 2019; and (d) An additional cash payment of $55,687 for cash that was left in ATCG at closing. The total purchase price of $8,784,533 ATCG's financial statements will be filed by amendment of the Current Report on Form 8-K filed on March 13, 2017 to disclose the closing of the acquisition. The Company has $20,164,724, in total towards consideration payable including contingent consideration payable for its acquisitions, consisting of $7,574,238 in cash obligations and $12,590,486 worth of common stock to be issued (assuming a per share price of $6.51). Out of $20,164,724, $5,743,724 is towards contingent consideration payable on earn outs. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2017 | |
REVENUE RECOGNITION [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 generally fall into two categories: (1) time-and-materials contracts and (2) fixed-price contracts. 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 or fixed-price (or a periodic retainer-based) contract, the Company recognizes revenue in accordance with its evaluation of the deliverables in each contract. If the deliverables represent separate units of accounting, the Company then measures and allocates the consideration from the arrangement to the separate units, based on vendor specific objective evidence of the value for each deliverable. The revenue under time and materials contracts is recognized as services are rendered and performed at contractually agreed upon rates. Revenue pursuant to fixed-price contracts is recognized under the proportional performance method of accounting. We routinely evaluate whether revenue and profitability should be recognized in the current period. We estimate the proportional performance on our fixed-price contracts on a monthly basis utilizing hours incurred to date as a percentage of total estimated hours to complete the project. This method is used because reasonably dependable estimates of costs and revenue earned can be made, based on historical experience and milestones identified in any particular contract. If we do not have a sufficient basis to measure progress toward completion, revenue is recognized upon completion of performance, subject to any warranty provisions or other project management assessments as to the status of work performed. Estimates of total project costs are continuously monitored during the term of an engagement. There are situations where the number of hours to complete projects may exceed our original estimate, as a result of an increase in project scope, unforeseen events that arise, or the inability of the client or the delivery team to fulfill their responsibilities. Accordingly, recorded revenues and costs are subject to revision throughout the life of a project based on current information and historical trends. Such revisions may result in increases or decreases to revenue and income and are reflected in the consolidated financial statements in the periods in which they are first identified. If our initial estimates of the resources required or the scope of work to be performed on a contract are inaccurate, or we do not manage the project properly within the planned time period, a provision for estimated losses on incomplete projects may be made. Any known or probable losses on projects are charged to operations in the period in which such losses are determined. A formal project review process takes place quarterly, although projects are continuously evaluated throughout the period. Management reviews the estimated total direct costs on each contract to determine if the estimated amounts are accurate, and estimates are adjusted as needed in the period identified. No losses were recognized on contracts during the period ended March 31, 2017. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2017 | |
SHARE-BASED COMPENSATION [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") The Plan allows for the issuance of up to 2,000,000 shares of our common stock for award grants. The Plan provides equity-based compensation through the grant of cash-based awards, nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and other stock-based awards. We believe that an adequate reserve of shares available for issuance under the Plan is necessary to enable us to attract, motivate and retain key employees and directors and to provide an additional incentive for such individuals through stock ownership and other rights that promote and recognize the financial success and growth of our Company. During the three months ended March 31, 2017, we granted 60,000 options to employees. As of March 31, 2017, aggregate grants under the Plan total to 1,614,898 shares of our common stock, of which 1,024,029 were granted as options, 590,869 were granted as restricted stock units. Share based compensation expense for the period ended March 31, 2017 was $502,254. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2017 | |
INTANGIBLE ASSETS [Abstract] | |
INTANGIBLE ASSETS | NOTE 6. INTANGIBLE ASSETS: We amortize our intangible assets that have finite lives using the straight-line method. Amortization expense was $667,296 during the three months ended March 31, 2017. This amortization expense relates to customer lists and products capitalized on our balance sheet, which expire through 2020. As of March 31, 2017, and December 31, 2016, capitalized intangible assets were as follows: March 31, 2017 December 31, 2016 Capitalized intangible assets $ 12,513,206 $ 10,074,546 Accumulated amortization 667,296 1,309,842 Total intangible assets $ 11,845,910 $ 8,764,704 Our amortization schedule is as follows: Years ending December 31, Amount 2017 $ 2,258,388 2018 2,955,873 2019 2,727,968 2020 2,652,000 2021 1,251,681 Total $ 11,845,910 The Company has its own software products, namely Simple APO, Langer Index and IBP. Total costs incurred for developing these products during the three months ended March 31, 2017 was $0 and have been capitalized and are being amortized over the useful life of the software products. The Company's intangible assets consists of the customer lists acquired from the Company's acquisition of WinHire Inc, Ameri Georgia, DCM, Virtuoso, Bigtech and ATCG. The products acquired from the acquisition of Linear Logics. Corp. and the amount spent on improving those products are also categorized as intangible assets and are being amortized over the useful life of those products. |
GOODWILL
GOODWILL | 3 Months Ended |
Mar. 31, 2017 | |
GOODWILL [Abstract] | |
GOODWILL | NOTE 7. GOODWILL: Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in businesses combinations. Goodwill was comprised of the following amounts: March 31, 2017 December 31, 2016 Virtuoso $ 939,881 $ 939,881 DCM 10,416,000 10,416,000 Bigtech 292,808 314,555 Ameri Consulting Service Pvt. Ltd. 1,948,118 1,948,118 Ameri Georgia 3,470,522 3,470,522 ATCG 4,812,243 - Total $ 21,879,572 $ 17,089,076 As per Company policy, goodwill impairment tests will be conducted on an annual basis and any impairment will be reflected in the Company’s statements of operations. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 3 Months Ended |
Mar. 31, 2017 | |
EARNINGS (LOSS) PER SHARE [Abstract] | |
EARNINGS (LOSS) PER SHARE | NOTE 8. EARNINGS (LOSS) PER SHARE: Three Months Ended March 31, 2017 2016 Net income (loss) attributable to the Company $ (1,225,469 ) $ (1,097,381 ) Weighted average common shares outstanding 14,094,536 11,874,361 Basic net income (loss) per share of common stock $ (0.09 ) $ (0.09 ) Diluted net income (loss) per share of common stock $ (0.09 ) $ (0.09 ) Due to the Company's net loss, potential dilutive shares were not included in the calculation of diluted earnings per share for the periods ended March 31, 2017 and March 31 2016, as they would have an antidilutive effect. |
OTHER ITEMS
OTHER ITEMS | 3 Months Ended |
Mar. 31, 2017 | |
OTHER ITEMS [Abstract] | |
OTHER ITEMS | NOTE 9. OTHER ITEMS: On January 27, 2017, the Company issued 33,333 shares of its common stock to its legal counsel, Olshan Frome Wolosky LLP ("Olshan"), in exchange for the cancellation of a portion of accrued and unpaid legal fees owed by the Company to Olshan. The Company is yet to make the dividend payment on its Series A Preferred Stock that was payable on March 31, 2017. The Company will pay the sole holder of the Series A Preferred Stock, the accrued dividend in-kind (common stock of AMRH) pursuant to the terms of the Certificate of Designation contemporaneously with the filing of the Quarterly Report of Form 10-Q for the quarter ended March 31, 2017. |
BANK DEBT
BANK DEBT | 3 Months Ended |
Mar. 31, 2017 | |
BANK DEBT [Abstract] | |
BANK DEBT | NOTE 10. BANK DEBT: 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, Inc., 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 DCM, Virtuoso and ATCG as borrowers under the Loan Agreement following their respective acquisition. Under the Loan Agreement, the Borrowers can 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 between the Company, its wholly-owned subsidiary Bellsoft, Inc. (Ameri Georgia) and Federal National Payables, Inc. The maturity of the loans under the Loan Agreement are as follows: Revolving Loan Maturity Date: July 1, 2019; provided, however, that the Revolving Loan Maturity Date will extend and renew automatically for successive one-year terms on each anniversary of the initial Revolving Loan Maturity Date (each an "Anniversary Date") thereafter, unless not less than sixty (60) days prior to any such Anniversary Date, written notice of non-renewal is given by either party to the other, in which case the Revolving Loan Maturity Date will be such next Anniversary Date. Term Loan Maturity Date: The earliest of (a) the date following acceleration of the Term Loan and/or the Revolving Loans; (b) the Revolving Loan Maturity Date; or (c) July 1, 2019. 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, and the Loan Agreement is secured by substantially all of the Borrowers’ assets. The principal amount of the Term Loan will be repaid as follows: (i) equal consecutive monthly installments in the amount of $33,333.33 each, paid on the first day of each calendar month and (ii) one final payment of the entire remaining principal balance, together with all accrued unpaid interest on the Term Loan maturity date. To date, the Company is not in conformance with the financial covenants contained in its Loan Agreement with Sterling National Bank. The Company received a waiver from Sterling National Bank for its non-compliance with the Loan Agreement through March 31, 2017 in exchange for the payment of a fee of $5,000. The Company is currently negotiating a waiver with Sterling National Bank to waive the Company's compliance with the Loan Agreement during the second quarter of 2017 in exchange for the payment of an additional fee that is to be determined. The Company does not expect to be in compliance with the terms of the Loan Agreement following the conclusion of the terms of the waivers granted by Sterling National Bank. The Company is continuing to work with Sterling National Bank to address its non-compliance. Interest paid during the period ended March 31, 2017 amounted to $79,933 Principal repaid on the term loan during the period ended March 31, 2017 was $100,000.The short term and long term loan outstanding balances on the term loan as of March 31, 2017 is $399,996 and $1,023,474 respectively. The revolving line of credit outstanding balance as of March 31, 2017 was $2,440,971. Bigtech, which was acquired as of July 1, 2016, had a term loan of $17,637 and a line of credit for $373,040 as of March 31, 2017. The Bigtech line of credit is with an Indian bank, HDFC Bank Limited and was entered into on June 3, 2015 for Bigtech’s working capital requirements. The line of credit is for up to $416,667 with an interest rate of 11.85% per annum and maturity in June 2020. The Bigtech term loan accrues interest at the rate of 10.30% per annum and matures in 2020. Both the term loan and the line of credit were already in place when the Company acquired Bigtech. Interest paid during the period ended March 31,2017 amounted to $10,873 for the term loan and line of credit held by Bigtech. |
CONVERTIBLE NOTES
CONVERTIBLE NOTES | 3 Months Ended |
Mar. 31, 2017 | |
CONVERTIBLE NOTES [Abstract] | |
CONVERTIBLE NOTES | NOTE 11. CONVERTIBLE NOTES: On March 7, 2017, we completed the sale and issuance of 8% Convertible Unsecured Promissory Notes (the “2017 Notes”)for aggregate proceeds to us of $1,250,000 from four accredited investors, including one of the Company's directors, Dhruwa N. Rai. The 2017 Notes were issued pursuant to Securities Purchase Agreements between the Company and each investor. The 2017 Notes bear interest at 8% per annum until maturity in March 2020, with interest being paid annually on the first, second and third anniversaries of the issuance of the 2017 Notes beginning in March 2018. From and after an event of default and for so long as the event of default is continuing, the 2017 Notes will bear default interest at the rate of 10% per annum. The 2017 Notes can be prepaid by us at any time without penalty. The 2017 Notes are convertible into shares of our common stock at a conversion price of (i) in the event that any registration statement for the public offering of common stock filed by the Company with the SEC in connection with an uplisting to a national stock exchange is declared effective by the SEC on or prior to December 31, 2017, such price per share that is equal to 68% of the price per share of common stock offered and sold pursuant to such registration statement, or (ii) if no such registration statement is declared effective by December 31, 2017, such price per share that is equal to the weighted average closing price per share of the Company's common stock for the 20 trading days immediately preceding December 31, 2017, subject to adjustment under certain circumstances. The 2017 Notes rank junior to our secured credit facility with Sterling National Bank. The 2017 Notes also include certain negative covenants including, without the investors' approval, restrictions on dividends and other restricted payments and reclassification of its stock. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2017 | |
COMMITMENTS AND CONTINGENCIES [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 2020. 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 $62,878 and $26,222 for the three months ended March 31, 2017 and 2016, respectively. The increase during the comparative periods is due to the addition of office space through the acquisition of DCM, Virtuoso, Bigtech and ATCG. |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
INTANGIBLE ASSETS [Abstract] | |
Capitalized Intangible Assets | As of March 31, 2017, and December 31, 2016, capitalized intangible assets were as follows: March 31, 2017 December 31, 2016 Capitalized intangible assets $ 12,513,206 $ 10,074,546 Accumulated amortization 667,296 1,309,842 Total intangible assets $ 11,845,910 $ 8,764,704 |
Summary of Amortization | Our amortization schedule is as follows: Years ending December 31, Amount 2017 $ 2,258,388 2018 2,955,873 2019 2,727,968 2020 2,652,000 2021 1,251,681 Total $ 11,845,910 |
GOODWILL (Tables)
GOODWILL (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
GOODWILL [Abstract] | |
Goodwill | Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in businesses combinations. Goodwill was comprised of the following amounts: March 31, 2017 December 31, 2016 Virtuoso $ 939,881 $ 939,881 DCM 10,416,000 10,416,000 Bigtech 292,808 314,555 Ameri Consulting Service Pvt. Ltd. 1,948,118 1,948,118 Ameri Georgia 3,470,522 3,470,522 ATCG 4,812,243 - Total $ 21,879,572 $ 17,089,076 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
EARNINGS (LOSS) PER SHARE [Abstract] | |
Reconciliation of Net Income and Weighted Average Shares Used in Computing Basic and Diluted Net Income per Share | Three Months Ended March 31, 2017 2016 Net income (loss) attributable to the Company $ (1,225,469 ) $ (1,097,381 ) Weighted average common shares outstanding 14,094,536 11,874,361 Basic net income (loss) per share of common stock $ (0.09 ) $ (0.09 ) Diluted net income (loss) per share of common stock $ (0.09 ) $ (0.09 ) |
ORGANIZATION (Details)
ORGANIZATION (Details) | 3 Months Ended |
Mar. 31, 2017Subsidiary | |
ORGANIZATION [Abstract] | |
Number of subsidiaries | 12 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Cost of Revenue | $ 9,039,577 | $ 5,365,561 |
Restatement Adjustment [Member] | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Cost of Revenue | $ 1,500,000 |
BUSINESS COMBINATIONS (Details)
BUSINESS COMBINATIONS (Details) | Mar. 10, 2017USD ($)shares | Oct. 21, 2016USD ($) | Sep. 22, 2016USD ($) | Jul. 29, 2016USD ($)shares | Jul. 22, 2016USD ($)shares | Jul. 01, 2016USD ($)shares | Nov. 20, 2015USD ($)consultantshares | Sep. 01, 2015USD ($) | Mar. 31, 2017USD ($)$ / shares | Mar. 31, 2016USD ($) |
Business Acquisition [Line Items] | ||||||||||
Earn-out payments to be paid | $ 20,164,724 | |||||||||
Acquisition payments in 2016 | $ 311,470 | $ 1,718,777 | ||||||||
Price per share (in dollars per share) | $ / shares | $ 6.51 | |||||||||
Cash [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Earn-out payments to be paid | $ 7,574,238 | |||||||||
Stock [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Earn-out payments to be paid | 12,590,486 | |||||||||
Earn-out [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Earn-out payments to be paid | $ 5,743,724 | |||||||||
Bellsoft, Inc [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of consultants | consultant | 175 | |||||||||
Consideration of acquisition | $ 9,910,817 | |||||||||
Business acquisition, cash payment at closing | $ 3,000,000 | |||||||||
Common stock, shares issued at closing (in shares) | shares | 235,295 | |||||||||
Quarterly cash payments to be paid on the last day of each calendar quarter of 2016 | $ 250,000 | |||||||||
Business acquisition, net working capital | $ 4,600,000 | |||||||||
Business acquisition, cash reimbursement | $ 1,000,000 | |||||||||
Excess of accounts receivable over its accounts payable | $ 2,910,817 | |||||||||
Business acquisition, percentage of earn-out payments | 30.00% | |||||||||
Earn-out payments to be paid | $ 500,000 | |||||||||
Capitalized intangible asset | $ 1,800,000 | |||||||||
Period of capitalized intangible asset | 3 years | |||||||||
Bigtech Software Private Limited [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration of acquisition | $ 850,000 | |||||||||
Business acquisition, cash payment at closing | $ 340,000 | |||||||||
Warrants purchase (in shares) | shares | 51,000 | |||||||||
Warrants purchase period | 2 years | |||||||||
Commission to be paid in cash | $ 255,000 | |||||||||
Capitalized intangible asset | $ 595,000 | |||||||||
Period of capitalized intangible asset | 3 years | |||||||||
Virtuoso [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration of acquisition | $ 1,831,881 | |||||||||
Business acquisition, cash payment at closing | $ 675,000 | |||||||||
Common stock, shares issued at closing (in shares) | shares | 101,250 | |||||||||
Acquisition payments in 2016 | $ 64,736 | |||||||||
Stock earn-out payments to be paid (in shares) | shares | 12,408 | |||||||||
Capitalized intangible asset | $ 900,000 | |||||||||
Period of capitalized intangible asset | 3 years | |||||||||
Virtuoso [Member] | Cash [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Earn-out payments to be paid | 450,000 | |||||||||
Virtuoso [Member] | Stock [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Earn-out payments to be paid | $ 560,807 | |||||||||
DC&M [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration of acquisition | $ 15,816,000 | |||||||||
Business acquisition, cash payment at closing | $ 3,000,000 | |||||||||
Common stock, shares issued at closing (in shares) | shares | 1,600,000 | |||||||||
Membership interest acquired | 100.00% | |||||||||
Capitalized intangible asset | $ 5,400,000 | |||||||||
Period of capitalized intangible asset | 3 years | |||||||||
DC&M [Member] | Cash [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Earn-out payments to be paid | $ 1,500,000 | |||||||||
ATCG [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration of acquisition | $ 8,784,533 | |||||||||
Business acquisition, cash payment at closing | $ 55,687 | |||||||||
Common stock, shares issued at closing (in shares) | shares | 576,923 | |||||||||
Membership interest acquired | 100.00% | |||||||||
Unsecured promissory notes, percentage of interest rate | 6.00% | |||||||||
Percentage of repayments of unsecured debt on December 31, 2017 | 50.00% | |||||||||
Percentage of repayments of unsecured debt on June 30, 2018 | 50.00% | |||||||||
Capitalized intangible asset | $ 3,750,000 | |||||||||
Period of capitalized intangible asset | 3 years | |||||||||
ATCG [Member] | Stock [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Earn-out payments to be paid | $ 1,200,000 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) | 3 Months Ended |
Mar. 31, 2017USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share based compensation expense | $ | $ 502,254 |
2015 Equity Incentive Award Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized for issuance under the equity incentive plan (in shares) | 2,000,000 |
Number of options granted for purchase (in shares) | 1,614,898 |
2015 Equity Incentive Award Plan [Member] | Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of options granted for purchase (in shares) | 1,024,029 |
2015 Equity Incentive Award Plan [Member] | Restricted Stock Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of options granted for purchase (in shares) | 590,869 |
2015 Equity Incentive Award Plan [Member] | Employees [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of options granted for purchase (in shares) | 60,000 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
INTANGIBLE ASSETS [Abstract] | ||
Amortization expense | $ 667,296 | |
Capitalized Intangible Assets [Abstract] | ||
Capitalized intangible assets | 12,513,206 | $ 10,074,546 |
Accumulated amortization | 667,296 | 1,309,842 |
Total intangible assets | 11,845,910 | $ 8,764,704 |
Amortization Expense for Intangible Assets [Abstract] | ||
2,017 | 2,258,388 | |
2,018 | 2,955,873 | |
2,019 | 2,727,968 | |
2,020 | 2,652,000 | |
2,021 | 1,251,681 | |
Total | 11,845,910 | |
Total costs incurred for developing products | $ 0 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Goodwill [Line Items] | ||
Goodwill | $ 21,879,572 | $ 17,089,076 |
Virtuoso [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 939,881 | 939,881 |
DCM [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 10,416,000 | 10,416,000 |
Bigtech [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 292,808 | 314,555 |
Ameri Consulting Service Pvt. Ltd [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 1,948,118 | 1,948,118 |
Ameri Georgia [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 3,470,522 | 3,470,522 |
ATCG [Member] | ||
Goodwill [Line Items] | ||
Goodwill | $ 4,812,243 | $ 0 |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Basic net income (loss) per share [Abstract] | ||
Net income (loss) attributable to the Company | $ (1,225,469) | $ (1,097,381) |
Weighted average common shares outstanding (in shares) | 14,094,536 | 11,874,361 |
Basic net income (loss) per share of common stock (in dollars per share) | $ (0.09) | $ (0.09) |
Diluted net income (loss) per share of common stock (in dollars per share) | $ (0.09) | $ (0.09) |
OTHER ITEMS (Details)
OTHER ITEMS (Details) | Jan. 27, 2017shares |
OTHER ITEMS [Abstract] | |
Share issued for professional service (in shares) | 33,333 |
BANK DEBT (Details)
BANK DEBT (Details) - USD ($) | Jul. 01, 2016 | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 10,000,000 | ||
Capital expenditure amount limit | $ 150,000 | ||
Coverage ratio | 2.00 to 1.00 | ||
Payment of fees | $ 5,000 | ||
Short term loan outstanding | 399,996 | $ 405,376 | |
long term loan outstanding | 1,023,474 | $ 1,536,191 | |
Bigtech [Member] | |||
Debt Instrument [Line Items] | |||
Line of credit facility maximum borrowing capacity | $ 416,667 | ||
Line of credit facility interest rate | 11.85% | ||
Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 2,000,000 | ||
Consecutive monthly installment payment | $ 33,333.33 | ||
Interest paid | 79,933 | ||
Principal repayment | 100,000 | ||
Short term loan outstanding | 399,996 | ||
long term loan outstanding | 1,023,474 | ||
Term Loan [Member] | Bigtech [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding balance | $ 17,637 | ||
Accrued interest percentage on debt instrument | 10.30% | ||
Interest paid | $ 10,873 | ||
Term Loan [Member] | Wall Street Journal Prime Rate [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate per annum | 3.75% | ||
Revolving Loans [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 8,000,000 | ||
Maturity date | Jul. 1, 2019 | ||
Term of loan agreement renew on each anniversary | 1 year | ||
Revolving Loans [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Period for renewing the loan agreement | 60 days | ||
Revolving Loans [Member] | Wall Street Journal Prime Rate [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate per annum | 2.00% | ||
Letter of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 200,000 | ||
Interest rate per annum | 3.75% | ||
Letter of Credit [Member] | Wall Street Journal Prime Rate [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate per annum | 3.25% | ||
Line of Credit [Member] | Bigtech [Member] | |||
Debt Instrument [Line Items] | |||
Maturity date | Jun. 30, 2020 | ||
Outstanding balance | $ 373,040 | ||
Interest paid | 10,873 | ||
Revolving Line of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding balance | $ 2,400,971 |
CONVERTIBLE NOTES (Details)
CONVERTIBLE NOTES (Details) - 8% Convertible Unsecured Promissory Notes [Member] | Mar. 07, 2017USD ($)Investor | Mar. 31, 2017 |
Debt Instrument [Line Items] | ||
Stated interest rate | 8.00% | |
Proceeds from sale of convertible note payable | $ | $ 1,250,000 | |
Number of accredited investors | Investor | 4 | |
Maturity date | Mar. 31, 2020 | |
Interest rate in case of default | 10.00% | |
Conversion price percentage | 68.00% | |
Number of trading days | 20 days |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | ||
Rent expense | $ 62,878 | $ 26,222 |