UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  May 26, 2015
 
AMERI Holdings, Inc.
(Exact name of registrant as specified in its charter)
     
Delaware
000-26460
95-4484725
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
     
100 Menlo Park Drive, Edison, New Jersey
08837
(Address of principal executive offices)
(Zip Code)

Registrant’s telephone number, including area code: (732) 243-9250
 
Spatializer Audio Laboratories, Inc.
53 Forest Avenue, First Floor, Old Greenwich, Connecticut 06870
(Former name or former address, if changed since last report.)
 
Copies to:
Olshan Frome Wolosky LLP
Park Avenue Tower
65 East 55 th Street
New York, New York 10022
Attention: Spencer G. Feldman, Esq.
Tel: (212) 451-2300
Email: sfeldman@olshanlaw.com
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 

 
CURRENT REPORT ON FORM 8-K
 
AMERI Holdings, Inc. (formerly Spatializer Audio Laboratories, Inc.)
 
MAY 26, 2015
 
TABL E OF CONTENTS
 
Page
 
     
     
     
     
     
     
     
     
 
 
 
Cautionary Language Regarding Forward-Looking Statements and Industry Data
 
This report contains “forward-looking statements” that involve risks and uncertainties, many of which are beyond our control.  Our actual results could differ materially and adversely from those anticipated in such forward-looking statements as a result of certain factors, including those set forth in this report.  Important factors that may cause actual results to differ from projections include, but are not limited to, for example:
 
 
·
adverse economic conditions,
 
 
·
inability to raise sufficient additional capital to operate our business,
 
 
·
unexpected costs, lower than expected sales and revenues, and operating defects,
 
 
·
adverse results of any legal proceedings,
 
 
·
the volatility of our operating results and financial condition,
 
 
·
inability to attract or retain qualified senior management personnel, and
 
 
·
other specific risks that may be referred to in this report.
 
All statements, other than statements of historical facts, included in this report regarding our strategy, future operations, financial position, estimated revenue or losses, projected costs, prospects and plans and objectives of management are forward-looking statements.  When used in this report, the words “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “plan” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words.  All forward-looking statements speak only as of the date of this report.  We undertake no obligation to update any forward-looking statements or other information contained herein, except as required by federal securities laws.  Stockholders and potential investors should not place undue reliance on these forward-looking statements.  Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements in this report are reasonable, we cannot assure stockholders and potential investors that these plans, intentions or expectations will be achieved.  We disclose important factors that could cause our actual results to differ materially from its expectations under “Risk Factors” and elsewhere in this report.  These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.
 
Information regarding market and industry statistics contained in this report is included based on information available to us that we believe is accurate.  It is generally based on academic and other publications that are not produced for purposes of securities offerings or economic analysis.  Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and the additional uncertainties accompanying any estimates of future market size, revenue and market acceptance of products and services.  We have no obligation to update forward-looking information to reflect actual results or changes in assumptions or other factors that could affect those statements, except as required by federal securities laws.  See “Risk Factors” for a more detailed discussion of uncertainties and risks that may have an impact on our future results.
 
 
Entry into a Material Definitive Agreement.
 
Overview
 
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 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”).  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 (the “Convertible Note”), together with a warrant to purchase shares of our common stock (the “Warrant”), in a private placement (the “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 “Securities Purchase Agreement”).  Prior to the Merger, Lone Star Value was our majority shareholder.  Lone Star Value has the right to designate three of our seven directors, as described below.
 
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.  Our trading symbol on the OTCQB marketplace was temporarily changed to “SPZRD” from “SPZR.”  This temporary trading symbol will be replaced by FINRA within 20 business days after the closing of the Merger with a symbol reflecting the new name of our company.  The corporate name change had been approved by our board of directors and the holder of a majority of our outstanding shares of common stock prior to the Merger.
 
As a result of the Merger, we are now a next generation technology-management solutions firm.  We have built products and services to assist Global 2000 companies by architecting and delivering the best technology solutions enabling customers to transform their business processes.  We have built a new method of measuring the effectiveness of technology deployments across large and medium size companies.  Through acquisitions, we have built deep consulting expertise in business process management and enterprise resource planning particularly surrounding SAP software and technology.
 
Merger Agreement
 
On May 26, 2015, we, our acquisition subsidiary and Ameri & Partners entered into the Merger Agreement.  On May 26, 2015, our acquisition subsidiary was merged with and into Ameri & Partners, with Ameri & Partners surviving as our wholly-owned subsidiary.  The Merger Agreement specified that each share of common stock of Ameri & Partners would be converted into our common stock.
 
On the closing date of the Merger, we issued 11,625,000 shares of common stock to holders of Ameri & Partners shares, representing 90% of the outstanding common stock following the completion of the Merger.  Following the Merger, all of our business operations will be conducted through our wholly-owned subsidiary Ameri & Partners.  Prior to the Merger, there were no material relationships between our company and Ameri & Partners, any of their respective affiliates, directors or officers, or any associates of their respective officers or directors.  Substantial ly all of our liabilities were settled and paid in full prior to the Merger.  The consideration exchanged in the Merger was determined as a result of arm’s-length negotiation among the parties.
 
Under the Merger Agreement, at the closing of the Merger, the number of members on our board of directors (the “Board”) was increased from two to four directors, and Jeffrey E. Eberwein and Giri Devanur were appointed to serve in the vacancies created by this expansion of the Board.  Upon compliance with Section 14(f) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 14f-1 under the Exchange Act, under the Merger Agreement, the number of directors on the Board will be increased to seven members, and Srinidhi “Dev” Devanur, Dr. Arthur M. Langer and Robert Rosenberg, former directors or advisory board members of Ameri & Partners, will be appointed to our Board, along with two additional directors designated by Lone Star Value, Dimitrios J. Angelis and Robert G. Pearse. In connection with the appointment of these directors, Kyle Hartley and Hannah M. Bible, our directors prior to the Merger, will resign as directors.  At the closing of the Merger, the Board appointed Jeffrey E. Eberwein as non-executive Chairman of the Board, Srinidhi “Dev” Devanur as Executive Vice Chairman of the Board, Giri Devanur as President and Chief Executive Officer, Srirangan “Ringo” Rajagopal as Executive Vice President - Client Relations, and Brunda Jagannath as Vice President - Finance, each of whom served in a similar position with Ameri & Partners (except for Mr. Eberwein).  At the same time, Kyle Hartley resigned as an officer.
 
 
Ameri India Agreements
 
As part of the transaction, we purchased 24.9% of the outstanding shares of common stock of Ameri Consulting Service Private Limited, a corporation organized under the laws of India which is owned by Giri Devanur and Srinidhi “Dev” Devanur (“Ameri India”), for aggregate consideration consisting of $1.00 and the consideration being furnished by us to the stockholders of Ameri & Partners under the Merger Agreement, pursuant to the terms of a Stock Purchase Agreement, dated as of May 26, 2015, by and between us and Messrs. Devanur (the “Ameri India Purchase Agreement”).  Subject to obtaining various regulatory approvals for foreign ownership required under India’s Foreign Exchange Management Act, we have agreed to purchase the remaining 75.1% of the outstanding shares of Ameri India for similar consideration.
 
Changes Resulting from the Merger
 
We intend to carry on Ameri & Partners’ business as our sole line of business.  Ameri & Partners counts itself among the global leaders in consulting and technology solutions, with headquarters in Edison, New Jersey and development offices in Prune and Bangalore, India.  We have relocated our principal executive offices to those of Ameri & Partners at 100 Menlo Park Drive, Edison, New Jersey 08837.  Our new telephone number is (732) 243-9250, our fax number is (732) 243-9254 and our website is located at www.ameri100.com.  The contents of Ameri & Partners’ website are not part of this report and should not be relied upon with respect thereto.
 
Pre-merger stockholders of our company will not be required to exchange their existing Spatializer Audio Laboratories, Inc. stock certificates for certificates of AMERI Holdings, Inc., since the OTC Markets Group will consider the existing stock certificates as constituting “good delivery” in securities transactions subsequent to the Merger.
 
Expansion of Board of Directors; Management
 
Under the Merger Agreement, at the closing of the Merger, the number of members on the Board was increased from two to four directors, and Jeffrey E. Eberwein and Giri Devanur were appointed to serve in the vacancies created by this expansion of the Board.  Upon compliance with Section 14(f) of the Exchange Act and Rule 14f-1 under the Exchange Act, under the Merger Agreement, the number of directors on the Board will be increased to seven members, and Srinidhi “Dev” Devanur, Dr. Arthur M. Langer and Robert Rosenberg, former directors or advisory board members of Ameri & Partners, will be appointed to our Board, along with two additional directors designated by Lone Star Value, Dimitrios J. Angelis and Robert G. Pearse.  In connection with the appointment of these directors, Kyle Hartley and Hannah M. Bible, our directors prior to the Merger, will resign as directors.  At the closing of the Merger, the Board appointed Jeffrey E. Eberwein as non-executive Chairman of the Board, Srinidhi “Dev” Devanur as executive Vice Chairman of the Board, Giri Devanur as President and Chief Executive Officer, Srirangan “Ringo” Rajagopal as Executive Vice President - Client Relations, and Brunda Jagannath as Vice President - Finance, each of whom served in a similar position with Ameri & Partners (except for Mr. Eberwein).  At the same time, Kyle Hartley resigned as an officer.
 
 
All directors hold office until the expiration of their respective term, in 2016, 2017 or 2018, at each year’s annual meeting of stockholders and the election and qualification of their successors.  Officers are elected annually by the Board and serve at the discretion of the Board.
 
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 common stock, consisting of initial grants of stock options to purchase 25,000 shares of common stock to each of Dimitrios J. Angelis, Dr. Arthur M. Langer, Robert G. Pearse and Robert Rosenberg.  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.
 
Accounting Treatment; Change of Control
 
The Merger is being accounted for as a “reverse merger,” since the former stockholders of Ameri & Partners own a majority of the outstanding shares of our common stock immediately following the Merger.  No arrangements or understandings exist among present or former controlling stockholders with respect to the election of members of our board of directors and, to our knowledge, no other arrangements exist that might result in a change of control in the future.  As a result of the issuance of the 11,625,000 shares of our common stock and the change in the majority of our directors, which will become effective upon compliance with Section 14(f) of the Exchange Act and Rule 14f-1 under the Exchange Act, a change in control occurred on the date of the consummation of the Merger.  Following the closing, we will continue to be a “smaller reporting company,” as defined under the Exchange Act.
 
Concurrent Private Placement
 
For the purpose of financing the ongoing business and operations of our company following the Merger, on May 26, 2015, we completed the Private Placement, issuing the Convertible Note in the principal amount of $5,000,000, together with the Warrant, pursuant to the terms of the Securities Purchase Agreement with Lone Star Value.  The Convertible Note is unsecured and will become due on May 26, 2017, the second anniversary of the issue date.  Prior to maturity, the Convertible Note will bear interest at 5% per annum, with interest being paid semiannually on the first day of each of the first and third calendar quarters.  From and after an event of default and for so long as the event of default is continuing, the Convertible Note will bear default interest at the rate of 10% per annum.  The Convertible Note can be prepaid by us at any time without penalty.
 
The Convertible Note is convertible into shares of our common stock at a conversion price of $1.80 per share, or an aggregate of 2,777,778 shares of common stock, subject to adjustment under certain circumstances.  The Convertible Note ranks senior to all of our other obligations, except for trade payables in the ordinary course of business, purchase money asset financing and any inventory or receivables-based credit facility that we may obtain in the future, provided that the amount of the credit facility does not exceed 50% of eligible inventory and 80% of eligible receivables.  The Convertible Note also includes certain negative covenants including, without Lone Star Value’s approval, restrictions on debt and security interests, mergers and the purchase and sale of assets, dividends and other restricted payments, and investments.
 
 
The Warrant issued in the Private Placement 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.  For additional information about the Private Placement, see Item 3.02 (Unregistered Sale of Equity Securities) of this current report on Form 8-K.
 
After the closing of the Merger and the Private Placement, we currently have outstanding 12,500,070 shares of common stock, as well as the Convertible Note, which is convertible into 2,777,778 shares of common stock, and the Warrant, which is exercisable into 2,777,777 shares of common stock at an exercise price of $1.80 per share.  We have also adopted the 2015 Equity Incentive Award Plan pursuant to which 2,000,000 shares of common stock through stock options and other awards may be granted.
 
Registration Rights Agreement
 
In accordance with the terms of the Private Placement, at the closing, we and Lone Star Value entered into a Registration Rights Agreement, dated as of May 26, 2015 (the “Registration Rights Agreement”), pursuant to which we agreed to file a registration statement with the U.S. Securities and Exchange Commission (the “SEC”), covering the resale of the shares of common stock into which the Convertible Note is convertible and for which the Warrant is exercisable within 60 days, if and upon the written request of Lone Star Value at any time on or before May 26, 2017.  We are obligated to maintain the effectiveness of the registration statement from its effective date until the later of (a) the date on which all registrable shares covered by the registration statement have been sold, or may be sold without volume or manner of sale restrictions under Rule 144 or (b) the second anniversary of the closing date.  We agreed to use our best efforts to have the registration statement declared effective by the SEC as soon as possible, but in any event within five days after the SEC notifies us that it will not review the registration statement or 60 days after we receive the first written comments on the registration statement from the SEC.  There are no monetary penalties if the registration statement is not filed or does not become effective on a timely basis.
 
Employment Agreements
 
We entered into employment agreements with Giri Devanur and Srinidhi “Dev” Devanur effective at the closing of the Merger.  The employment agreements appoint Giri Devanur as our President and Chief Executive Officer and Srinidhi “Dev” Devanur as our executive Vice Chairman of the Board for three years following the closing date.  The employment agreements provide that each executive will receive an annual salary of $120,000 and $120,000 per year, respectively, with a bonus for each of $50,000 per year, at the discretion of the Board.  The employment agreements incorporate the terms of our confidentiality and non-competition agreement, which contain covenants (a) restricting the executive from engaging in any activity competitive with our business during the term of the employment agreement and for a period of two years thereafter, (b) prohibiting the executive from disclosing confidential information regarding us at any time, and (c) soliciting our employees, customers and prospective customers during the term of the employment agreement and for a period of two years thereafter.
 
 
Please see Item 2.01 (Completion of Acquisition or Disposition of Assets) of this current report on Form 8-K for a description of these transactions and the material agreements entered into in connection therewith, which disclosure is incorporated herein by reference.
 
The foregoing information is a summary of the agreements involved in the transactions described above, is not complete, and is qualified in its entirety by reference to the full text of such agreements, a copy of which are attached as an exhibit to this current report on Form 8-K.  Readers should review such agreements for a complete understanding of the terms and conditions associated with the Merger and the Private Placement.
 
Ite m 2.01
Completion of Acquisition or Disposition of Assets.
 
The Merger Agreement
 
On May 26, 2015, we, our acquisition subsidiary and Ameri & Partners entered into the Merger Agreement.  On May 26, 2015, our acquisition subsidiary was merged with and into Ameri & Partners, with Ameri & Partners surviving as our wholly-owned subsidiary.  The Merger Agreement specified that each share of common stock of Ameri & Partners would be converted into our common stock.  Immediately following the completion of the Merger, we changed our corporate name to AMERI Holdings, Inc. from Spatializer Audio Laboratories, Inc.
 
On May 26, 2015, our Board determined that it was in the best interests of our company and our stockholders to enter into and perform the Merger Agreement.
 
Election of Board of Directors; Appointment of Officers
 
Under the Merger Agreement, at the closing of the Merger, the number of members on the Board was increased from two to four directors, and Jeffrey E. Eberwein and Giri Devanur were appointed to serve in the vacancies created by this expansion of the Board.  Upon compliance with Section 14(f) of the Exchange Act and Rule 14f-1 under the Exchange Act, under the Merger Agreement, the number of directors on the Board will be increased to seven members, and Srinidhi “Dev” Devanur, Dr. Arthur M. Langer and Dr. Robert Rosenberg, former directors or advisory board members of Ameri & Partners, will be appointed to our Board, along with two additional directors designated by Lone Star Value, Dimitrios J. Angelis and Robert G. Pearse.  In connection with the appointment of these directors, Kyle Hartley and Hannah M. Bible, our directors prior to the Merger, will resign as directors.  At the closing of the Merger, the Board appointed Jeffrey E. Eberwein as non-executive Chairman of the Board, Srinidhi “Dev” Devanur as Executive Vice Chairman of the Board, Giri Devanur as President and Chief Executive Officer, Srirangan “Ringo” Rajagopal as Executive Vice President - Client Relations, and Brunda Jagannath as Vice President - Finance, each of whom served in a similar position with Ameri & Partners (except for Mr. Eberwein).  At the same time, Kyle Hartley resigned as an officer.
 
Description of Business
 
References to “we,” “us” or “our” throughout this report refer to us and Ameri & Partners and its related companies together, unless the context indicates otherwise.
 
Overview of Ameri & Partners and Related Companies
 
Ameri & Partners counts itself among the global leaders in consulting and technology solutions, with international headquarters in Edison, New Jersey.  We provide solutions to clients’ business challenges by leveraging our technology and process capabilities to architect and implement technology that transform businesses across a variety of industries and enable our clients to successfully compete and stay ahead of the innovation curve.  As a Lean Enterprise Architecture Partner (“LEAP”), we help clients identify, design, implement, evaluate and configure their enterprise architecture throughout their organization.
 
 
We deliver a comprehensive range of solutions and services across multiple domains and industries including banking, financial services and insurance.  With our innovative solutions in enterprise architecture, enterprise resource planning (“ERP”), predictive analytics and enterprise mobility, we provide companies worldwide with strategic insights into their business which lead to a positive impact on their performance and profitability.  Our services include strategic consulting, operational leadership, and co-creation of customized solutions, including those in mobility, sustainability, big data and cloud computing.
 
Our aim is to develop enhanced business capabilities over time leveraging technology and giving the enterprise its competitive edge.  This requires investment in people, process and technologies with an expectation of attractive returns.  We have developed two proprietary methodologies to achieve our objectives: the LEAP Execution Model discussed above and the Relationship Engagement Execution Client Engagement Model (“R-E-E”).  Our LEAP model focuses on the core values of individuals and interactions over processes and tools, working software over comprehensive documentation, customer collaboration over contract negotiation and responding to change over following a plan.  Our R-E-E model emphasizes a single point of contact for complete program management, a global partner ecosystem with specialized service, technology, industry and geography focus and tailored engagements, a single point of accountability for project performance, continuous onsite as well as offshore, touch points and an up-to-date understanding of our clients’ evolving requirements.
 
Our line of products includes the Langer Index, developed by Dr. Arthur M. Langer and under exclusive license to us.  The Langer Index is an assessment system that helps define insights in businesses and create impactful transformations.  The primary goal of the Langer Index is to assess the IT readiness of a medium and large sized IT organization.  It helps in streamlining existing data collection, enabling fast, hassle-free mobile data collection.  The Langer Index provides sophisticated data analysis and visualization capabilities for business users and promotes the CIO team to build strategies and action plans to achieve strategic goals.  While most scorecards retain the traditional financial metrics that are backward looking, the Langer Index is a predictor of future success. 
 
Ameri & Partners was incorporated under the laws of the State of Delaware in November 2013.  Our principal executive offices are located at 100 Menlo Park Drive, Edison, New Jersey 08837.  We also have development offices in Prune and Bangalore, India.   We have relocated our principal executive offices to those of Ameri & Partners at 100 Menlo Park Drive, Edison, New Jersey 08837.  Our new telephone number is (732) 243-9250, our fax number is (732) 243-9254 and our website is located at www.ameri100.com.  The contents of Ameri & Partners’ website are not part of this report and should not be relied upon with respect thereto.
 
Industry Practices and Services
 
We offer a broad range of solutions designed to help clients address business challenges and enhance their ability to pursue growth opportunities.  The services and solutions we provide include Enterprise Architecture, Enterprise Resource Planning, Predictive Analytics and Enterprise Mobility.  Our products are delivered to our clients across our business segments in a standardized, high-quality manner through our R-E-E model .  We continually invest in the expansion of our service portfolio to anticipate and meet clients’ evolving needs and have developed strong capabilities in our focused industries.  Our business is organized and managed primarily around our two industry-oriented segments: (i) SAP Solutions for the manufacturing, government, retail and public health industries, which include our SAP products Customer Demand Manager CDM™ and integrated business planning (IBP) AnalyticsAccelrated IBP and account for approximately 70% for our net revenue; and (ii) Banking, Financial Services and Insurance Solutions, which account for approximately 30% of our net revenue.  Our industry practices are complemented by our services, which we develop in response to client requirements and technology life cycles.
 
 
This industry focus has been central to our revenue growth and high client satisfaction.  As the information technology (IT) services industry continues to mature, we believe clients are looking for service providers who understand their businesses, industry initiatives, best practices, customers, markets and cultures, and can create solutions tailored to meet their individual business needs.  To strengthen our industry practices, we hire professionals who are deeply experienced in the industries we serve, thus establishing a broad base of business analysts and consultants.
 
Industry Practices
 
SAP Solutions
 
Our SAP Solutions segment serves organizations within the manufacturing, government, retail and public health industries.  We provide our clients with expertise and skills in the following areas and projects:
 
·             E-commerce
·             Marketing analytics
   
·             SAP HANA
·             Omni channel marketing
   
·             Merger/demerger
·             Customer insight
   
·             Financial reporting
·             Procurement
   
·             SAP upgrades
·             Logistics
   
·             Supply chain
·             Integrated business planning (IBP)
   
·             Business intelligence
 
 
Banking, Financial Services and Insurance Solutions
 
Our Banking, Financial Services and Insurance segment serves financial institutions worldwide.  Our clients include companies providing banking, investments, transaction processing, capital markets and credit card services to third parties.  We also serve the needs of global insurance providers, who turn to us for assistance in improving the efficiency and effectiveness of their operations and in achieving business transformation.  Our services include Oracle Web Center, data warehousing, Innovation Lab, Openspan, A/B testing, Lean Launch, commissions systems, house-holding and retail banking.
 
Our Growth Strategy
 
Our growth strategy is based on a simple yet effective efficiency play, in which we aim to acquire IT services companies in the United States after careful evaluation, and achieve operational and sales effectiveness to deliver immediate upside for investment.
 
 
We provide integrated solutions, leveraging innovation, intelligence and insight, to deliver customer impact and   we intend to become one of the most preferred global technology management consulting companies.  To achieve this goal, we are focused on the following strategies:
 
Intelligent Bench Strategy
 
All onsite and offshore-based players in the industry have an average of 20% to 30% unutilized resource cost, or “bench cost,” that is being transferred to the customers.  We have solved this challenge by partnering with niche specialty firms globally to avail ourselves of the right resource at the right time to meet client needs without adding the extra bench cost.  These firms do not have the sales and marketing bandwidth.
 
Demand Strategy
 
Customers do not have measurement metrics to assess where their IT spending is yielding value.  We have addressed this by partnering with Columbia University’s technology management department and created the Langer Index, to assess technology spends.  We will implement our products and services through demand partners across the United States and eventually on an international basis.
 
Acquisitions
 
In November 2014, we completed a merger with WinHire Inc., a human capital management solutions firm.  In January 2015, we entered into a share purchase agreement to acquire Linear Logics Corp., a leading provider of supply chain management solutions, for a total cash price of $1,000,000.  We paid the first installment of $340,000 towards the cash price, which is classified as an investment in our balance sheet.  The balance is payable in two installments.
 
Our Services
 
Enterprise Architecture
 
An organization’s strategy and architecture practice is the cornerstone of effective strategy communications, transformation management and IT governance.  Yet no two organizations are the same and the shape of the practice must reflect the overall operating model as well as the investment climate and sourcing models of the organization.  We help our clients develop the right kind of architecture practice, tailored to their needs.  We start by defining architectures for the use of information in support of our clients’ business and the plan for implementing those architectures.  After planning, we define the sequence of activities that are required in order to develop the enterprise architecture framework and its contents, or the blueprints.  Following the planning and process formulation, we help the client define drivers and roadmaps for the people required to support the architecture and create a software evaluation criteria and scorecard to perform a technology assessment for the client’s enterprise solutions.  Finally, after establishing the platform, we help our client implement, customize and migrate applications and products that support the business processes, software and infrastructure.
 
 
The diagram below defines the process of how technology works closely with the business to drive business improvement through sound enterprise architecture:
 

Enterprise Resource Planning
 
Ameri & Partners is at the forefront of Enterprise Resource Planning (ERP) solutions, providing services aligned to the IT needs and business goals of our clients around the world.  Our suite of ERP solutions and services is designed to partner with the client for the entire life-cycle of their enterprise applications as they evolve.  We have a focus on designing solutions for businesses by developing a deep understanding of it business challenges and industry environment.  We have extensive experience in deploying, managing and delivering world class solutions utilizing our global delivery capabilities which enables us to deliver a first class service while mitigating cost.  Our global delivery capabilities, advanced development centers, offices and partners across the world, together with the most up-to-date infrastructure, tools and certified talent pool, enable us to deliver best-in-class offshore services along with the benefits of low cost execution, expertise and flexible partner.  Our ERP solutions include ERP consultancy, design, implementation, solutioning based on industry best practices, rapid development solutions, migration, upgrades, roll-out, mobility, maintenance and support, and managed services.
 
Predictive Analytics
 
We help drive innovative decisions with the power of business discovery.  We can combine a client’s data sources, then provide instant answers to questions and allow clients to intuitively design complex predictive models.  Our expertise lies in business analytics and intelligence.  With our industry knowledge, technical capability, operational experience, robust global delivery model and strong partnership models, we help the customer with insights to improve the decision-making process.  We build innovative solutions that run reports and create dashboards quickly to detect market changes and functional impacts in real time, which will help to make more informed decisions by analyzing both structured and unstructured data.  We specialize in predictive analytics technologies including SAP HANA, Oracle TimesTen, McObject eXtremeDB, Redis and UNICOM SolidDB.  Clients leverage upon our experience to discover how to find hidden value with text mining and analytics, gain accurate insights by consolidating structured and unstructured data and learn how to understand customers and predict their behavior.
 
 
The following diagram shows the Predictive Analytics workflow:
 
 
Enterprise Mobility
 
According to Gartner Inc., an independent information technology research and advisory firm, 80% of businesses are starting to support workforce use of tablets and 90% of the organizations will support corporate applications on personal devices in the next few years.  This compels software product companies and service providers to design and implement a mobile strategy encompassing multiple platforms and classes of devices in quick time.  With our innovative solutions, users can easily access data they need anywhere, while providing the flexibility and mobility users demand.  We continuously explore and evaluate rapidly evolving mobility options to help our customers leverage these new technologies for business advantage, keeping them on the edge of the innovation curve.
 
Our expertise is targeted towards building mobility applications, leveraging various approaches such as Native, Cross Platform (Hybrid), and Mobile Web Application Development like HTML5 and Fiori.  Our proficiency also lies in development of apps on IOS, Android, Windows Phone, Blackberry and Symbian.
 
 
The following diagram demonstrates our mobility management services workflow:
 
 
Our Software Products
 
We have developed three main products:
 
 
·
Customer Demand Manager (CDMTM), an app which provides the sales professional with real-time collaboration capabilities, saving hours of preparation, data entry, and increasing forecast accuracy.
 
 
·
Integrated Business Planning (IBP) / S&OP Mobile Analytics App, one of several applications for analyzing and managing Big Data which is addressing the S&OP business process that has been a white space due to the complexity of the process and ability to process large volumes of data.  Ameri100 has worked extensively with SAP development on this new product and is a development and implementation partner.
 
 
·
The Langer Index, a mobile-ready, web-based assessment tool for collecting and analyzing organizational data about a company’s IT organization.
 
Our internal innovation lab provides an environment for developing software products in leading-edge technologies as well as in various domains.  We have undertaken extensive business hypotheses-driven research and surveys and invest our time into identifying precise market requirements and iteratively built products to meet the needs of the market.
 
Our products are built based on use cases that identify industry-based technology white space that is a pain-point for customers through our years of experience and knowledge and hence add instant return on investment to our customers.  Our lab, connected to academic research centers of international repute for various collaborative research projects, is customer aligned and metrics driven.  Innovative solutions emerging from our lab have won international awards.
 
Sales and Marketing
 
Our sales approach is to combine traditional sales with our strength in industries and technology.  Our traditional sales function is composed of direct sales professionals and inside sales professionals.  Both work closely with our practice directors to identify potential opportunities within each account.  Using a consultative selling methodology, target prospects are identified and a pursuit plan is developed for each key account.  When contact with a target is established, we utilize a blended sales model to demonstrate our expertise, combining consultative selling with traditional sales methods.  Once the customer has engaged us, our sales professionals maintain their relationships with the customer by working collaboratively with the consulting professionals who are assigned to the customer.
 
 
The primary goal of our marketing efforts is to generate sales opportunities by increasing brand awareness, value proposition and overall domain expertise.  Our marketing function utilizes comprehensive internet marketing strategies that involve integrated activities, including, but not limited to, webinars, highly-targeted email campaigns distributed to prospect and client lists developed with specific demographics and attributes, and social media outlets to promote our capabilities and services (for example, both company-driven and domain-specific blogs, social networking and video sharing websites).   By leveraging closely coupled Internet marketing strategies to promote our services, we are able to reach a wider audience and communicate in a medium that has become more widely accepted and brings in quicker results from a sales and marketing perspective.  We also gather key statistics from our websites, blogs, email campaigns and other social media outlets to test, measure and trace our marketing initiatives.  This enables us to ensure we are reaching the right target audience with concise and compelling offerings to promote our capabilities.
 
Our close partnership with SAP, alignment with the SAP development roadmap and experience in providing out-of-the-box solutions help us to work with SAP customers on so-called “rescue boat” engagements.
 
Technology Research and Development
 
We regard our services and solutions and related software products as proprietary and rely primarily on a combination of copyright, trademark and trade secret laws of general applicability, employee confidentiality and invention assignment agreements, distribution and software protection agreements and other intellectual property protection methods to safeguard our technology and software products.  We have not applied for patents on any of our technology.  We also rely upon our efforts to design and produce new applications, and upon improvements to existing software products, to maintain a competitive position in the marketplace.
 
On March 26, 2015, we entered into a license agreement with Dr. Arthur M. Langer, which grants us a license for exclusive, perpetual, irrevocable and worldwide use of the Langer Model to generate the Langer Index.  License fees are payable to Dr. Langer at a rate of $10,000 per customer for the first 100 customer contracts.  Thereafter, the fees are payable at the rate of $5,000 for every 100 customer contracts, which will be payable upon the signing of every block of 100 customers.  “Langer Index” is a registered trademark of Ameri100.
 
Research and product development expenditures were approximately $588,101 in the fiscal year ended March 31, 2015 and $0 in the fiscal year ended March 31, 2014.
 
Customers
 
For the fiscal year ended March 31, 2015, sales to three major customers, Axalta Coating Systems Ltd. (a DuPont Co. spin-off), Infosys Limited and Associated Banc-Corp, accounted for 93% of our total revenue.  For the period from November 27, 2013 (date of inception) to March 31, 2014, sales to Axalta Coating Systems Ltd. accounted for 100% of our total revenue.  These same customers accounted for 85% and 100% of our accounts receivable balance at March 31, 2015 and 2014, respectively.
 
 
Strategic Alliances
 
Under our proprietary LEAP methodology, we have formed strategic alliances with more than 25 subject matter technology specialists in the IT area to perform comprehensive services on an as needed basis for particular clients.  We partner with niche specialty firms globally to avail ourselves of the right resource at the right time to meet client needs without adding the extra bench cost.  These firms do not have the sales and marketing bandwidth.  We partner with regional specialist firms in niche skills in various cities across the United States and partner with them to offer our wide array of services.  We will expand our supply partners list and match them with the requirements of our demand partners.  Our LEAP approach allows us to leverage strategic partnerships, which include a skilled workforce of over 4,500 industry professionals globally.  The partner-led model enables us to deliver quality talent and resources, define a transition management process that yields results and create across-the-board growth for clients.  Our business partners include executive recruiters, staffing firms and niche technology companies.
 
Competition
 
The intensely competitive IT services and outsourcing market includes a large number of participants and is subject to rapid change.  This market includes participants from a variety of market segments, including systems integration firms, contract programming companies, application software companies, traditional large consulting firms, professional services groups of computer equipment companies and facilities management and outsourcing companies.  Our direct competitors in the IT services industry include NetSol Technologies, Inc.,  RCM Technologies, Inc., Cartesian Inc., Igate Corporation, Syntel Inc., Hexaware Technologies Ltd., Mindtree Ltd. and Cognizant Technology Solutions.
 
We believe that the principal competitive factors in the IT services and outsourcing market include performance and reliability, quality of technical support, training and services, responsiveness to customer needs, reputation and experience, financial stability and strong corporate governance, and competitive pricing of services.
 
Some of our competitors have significantly greater financial, technical and marketing resources and/or greater name recognition, but we believe we are well-positioned to capitalize on the following competitive strengths to achieve future growth:
 
 
·
well-developed recruiting, training and retention model;
 
 
·
successful service delivery model;
 
 
·
broad referral base;
 
 
·
continual investment in process improvement and knowledge capture;
 
 
·
investment in research and development; and
 
 
·
financial stability and strong corporate governance.
 
Employees
 
We employed approximately 44 employees as of March 31, 2015, including 17 individuals in the United States and 27 individuals in India.  Of these employees, 9 held positions in engineering, 6 in sales and marketing, 2 in customer support and 27 in general administration.  None of these employees is covered by a collective bargaining agreement and management considers relations with employees to be good.
 
 
Properties
 
We lease administrative, marketing and product development and support facilities totaling 17,398 square feet at the following locations: Edison, New Jersey and Prune and Bangalore, India.  We expect total rent expense to be approximately $180,000 under real property leases for fiscal year 2016.
 
Legal Proceedings
 
There are currently no pending or threatened legal proceedings against us.
 
 
Risk Factors
 
An investment in our common stock involves a high degree of risk.  You should carefully consider the risks described below, together with all of the other information included in this report, before making an investment decision.  If any of the following risks actually occurs, our business, financial condition or results of operations could suffer.  In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.  You should read the section entitled “Cautionary Language Regarding Forward-Looking Statements and Industry Data” above for a discussion of what types of statements are forward-looking statements, as well as the significance of such statements in the context of this report.
 
Risks Relating to Our Business and Industry
 
We recorded net income for our 2015 fiscal year, but there can be no assurance that our future operations will result in net income.
 
For the fiscal year ended March 31, 2015, we had net revenue of $16,804,379 and net income of $459,596.  At March 31, 2015, we had stockholders’ equity of $884,156, an increase of $920,527 from March 31, 2014.  There can be no assurance that our future operations will continue to result in net income.  Our failure to increase our revenues or improve our gross margins will harm our business.  We may not be able to sustain or increase profitability on a quarterly or annual basis in the future.  If our revenues grow more slowly than we anticipate, our gross margins fail to improve or our operating expenses exceed our expectations, our operating results will suffer.  The prices we charge for our solutions and services may decrease, which would reduce our revenues and harm our business.  If we are unable to sell our solutions at acceptable prices relative to our costs, or if we fail to develop and introduce on a timely basis new solutions and services from which we can derive additional revenues, our financial results will suffer.
 
We and our subsidiaries have limited operating histories and therefore we cannot ensure the long-term successful operation of our business or the execution of our business plan.
 
Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by growing companies in new and rapidly evolving markets, such as the technology consulting markets in which we operate.  We must meet many challenges including:
 
 
·
establishing and maintaining broad market acceptance of our solutions and services and converting that acceptance into direct and indirect sources of revenue,
 
 
·
establishing and maintaining adoption of our technology solutions in a wide variety of industries and on multiple enterprise architectures,
 
 
·
timely and successfully developing new solutions and services and increasing the functionality and features of existing solutions and services,
 
 
·
developing solutions and services that result in high degrees of enterprise client satisfaction and high levels of end-customer usage,
 
 
·
successfully responding to competition, including competition from emerging technologies and solutions,
 
 
 
·
developing and maintaining strategic relationships to enhance the distribution, features, content and utility of our solutions and services and
 
 
·
identifying, attracting and retaining talented technical services staff at reasonable market compensation rates in the markets in which we employ.
 
Our business strategy may be unsuccessful and we may be unable to address the risks we face in a cost-effective manner, if at all.  If we are unable to successfully address these risks our business will be harmed.
 
Uncertain global economic conditions may continue to adversely affect demand for our services.
 
Our revenue and gross margin depend significantly on general economic conditions and the demand for IT services in the markets in which we operate.  Economic weakness and constrained IT spending has resulted, and may result in the future, in decreased revenue, gross margin, earnings and growth rates.  A material portion of our revenues and profitability is derived from our clients in North America, Canada and Europe.  Weakening in these markets as a result of high government deficits, credit downgrades or otherwise, could have a material adverse effect on our results of operations.  Ongoing economic volatility and uncertainty affects our business in a number of other ways, including making it more difficult to accurately forecast client demand beyond the short term and effectively build our revenue and resource plans.  Economic downturns also may lead to restructuring actions and associated expenses.  Uncertainty about future economic conditions makes it difficult for us to forecast operating results and to make decisions about future investments.  Delays or reductions in IT spending could have a material adverse effect on demand for our products and services, and consequently the results of operations, financial condition, cash flows and stock price.
 
Our operations and assets in India expose us to regulatory, economic, political and other uncertainties in India which could harm our business.
 
We have a significant offshore presence in India where a number of our technical professionals are located.  In the past, the Indian economy has experienced many of the problems confronting the economies of developing countries, including high inflation and varying gross domestic product growth.  Salaries and other related benefits constitute a major portion of our total operating costs.  Most of our employees are based in India where our wage costs have historically been significantly lower than wage costs in the United States and Europe for comparably skilled professionals, and this has been one of our competitive advantages.  However, wage increases in India or other countries where we have our operations may prevent us from sustaining this competitive advantage.  We may need to increase the levels of our employee compensation more rapidly than in the past to retain talent.  Unless we are able to continue to increase the efficiency and productivity of our employees, wage increases in the long term may reduce our profit margins.
 
Recently, India had a change in the government.  The change in government leads to a degree of uncertainty and anticipation regarding new economic initiatives and reforms.  This may have an impact on investment decisions and operations.  Further, India has experienced natural disasters and incidents of terrorism which have emerged as the biggest risk.  In the event that any of our business centers are affected by any such disasters, we may sustain damage to our operations and properties, suffer significant losses and be unable to complete our client engagements in a timely manner.  In addition, companies may decline to contract with us for services in the light of these risks, because of more generalized concerns about relying on a service provider utilizing international resources that may be viewed as less stable than those provided domestically.
 
 
We are subject to significant influence over actions exercised by the Indian government which could have an adverse effect on our business sector.  Such actions by the government could influence the functioning of our business both in long and short term.  We have been provided significant tax incentives in the past, which includes among other things, tax holidays and favorable rules on foreign investment and repatriation.  In addition, a change in laws, policies and regulations by the regulators including changes in industry or trade policies, budget amendments or a change in the government could require costly changes to the way we operate and remove any of the benefits realized by us which could have a material adverse effect on our business, results of operations and financial condition.
 
Our clients may seek to reduce their dependence on India for outsourced IT services or take advantage of the services provided in countries with labor costs similar to or lower than India.
 
Clients which presently outsource a significant proportion of their IT services requirements to vendors in India may, for various reasons, including in response to rising labor costs in India and to diversify geographic risk, seek to reduce their dependence on one country.  We expect that future competition will increasingly include firms with operations in other countries, especially those countries with labor costs similar to or lower than India, such as China, the Philippines and countries in Eastern Europe.  Since wage costs in our industry in India are increasing, our ability to compete effectively will become increasingly dependent on our reputation, the quality of our services and our expertise in specific industries.  If labor costs in India rise at a rate which is significantly greater than labor costs in other countries, our reliance on the labor in India may reduce our profit margins and adversely affect our ability to compete, which would, in turn, have a negative impact on our results of operations.
 
Our international operations subject us to exposure to foreign currency fluctuations.
 
We have operations in 2 countries and as we expand our international operations, more of our customers pay us in foreign currencies.  Transactions in currencies other than U.S. dollars subject us to fluctuations in currency exchange rates.  Accordingly, changes in exchange rates between the U.S. dollar and other currencies could have a material adverse effect on our revenues and net income, which may in turn have a negative impact on our business, results of operations, financial condition and cash flows.  The exchange rate between the U.S. dollar and other currencies has changed substantially in recent years and may fluctuate in the future.  We expect that a majority of our revenues will continue to be generated in U.S. dollars for the foreseeable future and that a significant portion of our expenses, including personnel costs, as well as capital and operating expenditures, will continue to be denominated in other currencies such as Indian Rupee.  The hedging strategies that we have implemented, or may in the future implement, to mitigate foreign currency exchange rate risks may not reduce or completely offset our exposure to foreign exchange rate fluctuations and may expose our business to unexpected market, operational and counterparty credit risks.  Accordingly, we may incur losses from our use of foreign exchange derivate contracts that could have a material adverse effect on our business, results of operations and financial condition.
 
An inability to recruit and retain IT professionals will adversely affect our ability to deliver our services.
 
Our industry relies on large numbers of skilled IT employees, and our success depends upon our ability to attract, develop, motivate and retain a sufficient number of skilled IT professionals and project managers who possess the technical skills and experience necessary to deliver our services.  Qualified IT professionals are in demand worldwide and are likely to remain a limited resource for the foreseeable future.  Our failure to attract or retain qualified IT professionals in sufficient numbers may have a material adverse effect on our business, results of operations, financial condition and cash flows.
 
 
We face intense competition from other service providers.
 
We are subject to intense competition in the industry in which we operate which may adversely affect our results of operations, financial condition and cash flows.  We operate in a highly intensive competitive industry which is served by numerous global, national, regional and local firms.  Our industry has experienced rapid technological developments, changes in industry standards and customer requirements.  The principal competitive factors in the IT markets include the range of services offered, size and scale of service provider, global reach, technical expertise, responsiveness to client needs, speed in delivery of IT solutions, quality of service and perceived value.  Many companies also choose to perform some or all of their back office IT and IT-enabled operations internally.  Such competitiveness requires us to keep pace with technological developments and maintain leadership; enhance our service offerings, including the breadth of our services and portfolio, and address increasingly sophisticated customer requirements in a timely and cost-effective manner.
 
We market our service offerings to large and medium-sized organizations.  Generally, the pricing for the projects depends on the type of contract which includes time and material contracts, annual maintenance contracts (fixed time frame), fixed price contracts and transaction price based contracts.  The intense competition and the changes in the general economic and business conditions can put pressure on us to change our prices.  If our competitors offer deep discounts on certain services or provide services that the marketplace considers more valuable, we may need to lower prices or offer other favorable terms in order to compete successfully.  Any broad-based change to our prices and pricing policies could cause revenues to decline and may reduce margins and could adversely affect results of operations, financial condition and cash flows.  Some of our competitors may bundle software products and services for promotional purposes or as a long-term pricing strategy or provide guarantees of prices and product implementations.  These practices could, over time, significantly constrain the prices that we can charge for certain services.  If we do not adapt our pricing models to reflect changes in customer use of our services or changes in customer demand, our revenues and cash flows could decrease.
 
Our competitors may have significantly greater financial, technical and marketing resources and greater name recognition and, therefore, may be better able to compete for new work and skilled professionals.  Similarly, if our competitors are successful in identifying and implementing newer service enhancements in response to rapid changes in technology and customer preferences, they may be more successful at selling their services.  If we are unable to respond to such changes our results of operations may be harmed.  Further, a client may choose to use its own internal resources rather than engage an outside firm to perform the types of services we provide.  We cannot be certain that we will be able to sustain our current levels of profitability or growth in the face of competitive pressures, including competition for skilled technology professionals and pricing pressure from competitors employing an on-site/offshore business model.
 
In addition, we may face competition from companies that increase in size or scope as the result of strategic alliances such as mergers or acquisitions.  These transactions may include consolidation activity among hardware manufacturers, software companies and vendors, and service providers.  The result of any such vertical integration may be greater integration of products and services that were once offered separately by independent vendors.  Our access to such products and services may be reduced as a result of such an industry trend, which could adversely affect our competitive position.  These types of events could have a variety of negative effects on our competitive position and our financial results, such as reducing our revenue, increasing our costs, lowering our gross margin percentage, and requiring us to recognize impairments on our assets.
 
 
Our business could be adversely affected if we do not anticipate and respond to technology advances in our industry and our clients’ industries.
 
The IT and offshore outsourcing services industries are characterized by rapid technological change, evolving industry standards, changing client preferences and new product introductions.  Our success will depend in part on our ability to develop IT solutions that keep pace with industry developments.  We may not be successful in addressing these developments on a timely basis or at all, if these developments are addressed, we will be successful in the marketplace.  In addition, products or technologies developed by others may not render our services noncompetitive or obsolete.  Our failure to address these developments could have a material adverse effect on our business, results of operations, financial condition and cash flows.
 
A significant number of organizations are attempting to migrate business applications to advanced technologies.  As a result, our ability to remain competitive will be dependent on several factors, including our ability to develop, train and hire employees with skills in advanced technologies, breadth and depth of process and technology expertise, service quality, knowledge of industry, marketing and sales capabilities.  Our failure to hire, train and retain employees with such skills could have a material adverse impact on our business.  Our ability to remain competitive will also be dependent on our ability to design and implement, in a timely and cost- effective manner, effective transition strategies for clients moving to advanced architectures.  Our failure to design and implement such transition strategies in a timely and cost-effective manner could have a material adverse effect on our business, results of operations, financial condition and cash flows.
 
Our business could be materially adversely affected if we do not or are unable to protect our intellectual property or if our services are found to infringe upon or misappropriate the intellectual property of others.
 
Our success depends in part upon certain methodologies and tools we use in designing, developing and implementing applications systems in providing our services.  We rely upon a combination of nondisclosure and other contractual arrangements and intellectual property laws to protect confidential information and intellectual property rights of ours and our third parties from whom we license intellectual property.  We enter into confidentiality agreements with our employees and limit distribution of proprietary information.  The steps we take in this regard may not be adequate to deter misappropriation of proprietary information and we may not be able to detect unauthorized use of, protect or enforce our intellectual property rights.  At the same time, our competitors may independently develop similar technology or duplicate our products or services.  Any significant misappropriation, infringement or devaluation of such rights could have a material adverse effect upon our business, results of operations, financial condition and cash flows.
 
Litigation may be required to enforce our intellectual property rights or to determine the validity and scope of the proprietary rights of others.  Any such litigation could be time consuming and costly.  Although we believe that our services do not infringe or misappropriate on the intellectual property rights of others and that we have all rights necessary to utilize the intellectual property employed in our business, defense against these claims, even if not meritorious, could be expensive and divert our attention and resources from operating our company.  A successful claim of intellectual property infringement against us could require us to pay a substantial damage award, develop non-infringing technology, obtain a license or cease selling the products or services that contain the infringing technology.  Such events could have a material adverse effect on our business, financial condition, results of operations and cash flows.
 
 
Any disruption in the supply of power, IT infrastructure and telecommunications lines to our facilities could disrupt our business process or subject us to additional costs.
 
Any disruption in basic infrastructure, including the supply of power, could negatively impact our ability to provide timely or adequate services to our clients.  We rely on a number of telecommunications service and other infrastructure providers to maintain communications between our various facilities and clients in India, the United States and elsewhere.  Telecommunications networks are subject to failures and periods of service disruption which can adversely affect our ability to maintain active voice and data communications among our facilities and with our clients.  Such disruptions may cause harm to our clients’ business.  We do not maintain business interruption insurance and may not be covered for any claims or damages if the supply of power, IT infrastructure or telecommunications lines is disrupted.  This could disrupt our business process or subject us to additional costs, materially adversely affecting our business, results of operations, financial condition and cash flows.
 
System security risks and cyber-attacks could disrupt our information technology services provided to customers, and any such disruption could reduce our expected revenue, increase our expenses, damage our reputation and adversely affect our stock price.
 
Security and availability of IT infrastructure is utmost concern for our business, and securing all critical information and infrastructure necessary for rendering services is also one of the top priorities of our customers.
 
System security risks and cyber-attacks could breach the security and disrupt the availability of our IT services provided to customers.  Any such breach or disruption could allow the misuse of our information systems, resulting in litigation and potential liability for us, the loss of existing or potential clients, damage to our reputation and diminished brand value, and could have a material adverse effect on our financial condition.
 
Our network and our deployed security controls could also be penetrated by a skilled computer hacker or intruder.  Further, a hacker or intruder could compromise the confidentiality and integrity of our protected information, including personally identifiable information; deploy malicious software or code like computer viruses, worms or Trojan horses, etc may exploit any security vulnerabilities, known or unknown, of our information system; cause disruption in the availability of our information and services; and attack our information system through various other mediums.
 
We also procure software or hardware products from third party vendors that provides, manages and monitors our services.  Such products may contain known or unfamiliar manufacturing, design or other defects which may allow a security breach or cyber-attack, if exploited by a computer hacker or intruder, or may be capable of disrupting performance of our IT services and prevent us from providing services to our clients.
 
In addition, we manage, store, process, transmit and have access to significant amounts of data and information that may include our proprietary and confidential information and that of our clients.  This data may include personal information, sensitive personal information, personally identifiable information or other critical data and information, of our employees, contractors, officials, directors, end customers of our clients or others, by which any individual may be identified or likely to be identified.  Our data security and privacy systems and procedures meet applicable regulatory standards and undergo periodic compliance audits by independent third parties and customers.  However, if our compliance with these standards is inadequate, we may be subject to regulatory penalties and litigation, resulting in potential liability for us and an adverse impact on our business.
 
We are still susceptible to data security or privacy breaches, including accidental or deliberate loss and unauthorized disclosure or dissemination of such data or information.  Any breach of such data or information may lead to identity theft, impersonation, deception, fraud, misappropriation or other offenses in which such information may be used to cause harm to our business and have a material adverse effect on our financial condition, business, results of operations and cash flows.
 
 
We must effectively manage the growth of our operations, or our company will suffer.
 
Our ability to successfully implement our business plan requires an effective planning and management process.  If funding is available, we intend to increase the scope of our operations and acquire complimentary businesses.  Implementing our business plan will require significant additional funding and resources.  If we grow our operations, we will need to hire additional employees and make significant capital investments.  If we grow our operations, it will place a significant strain on our existing management and resources.  If we grow, we will need to improve our financial and managerial controls and reporting systems and procedures, and we will need to expand, train and manage our workforce.  Any failure to manage any of the foregoing areas efficiently and effectively would cause our business to suffer.
 
Our revenues are concentrated in a limited number of clients in a limited number of industries and our revenues may be significantly reduced if these clients decrease their IT spending.
 
For the year ended March 31, 2015, sales to three major customers, Axalta Coating Systems Ltd., Infosys Limited and Associated Banc-Corp, accounted for 93% of our total revenue.  These same customers accounted for 85% of the accounts receivable balance at March 31, 2015.  Consequently, if our top clients reduce or postpone their IT spending significantly, this may lower the demand for our services and negatively affect our revenues and profitability.  Further, any significant decrease in the growth of the financial services or other industry segments on which we focus may reduce the demand for our services and negatively affect our revenues, profitability and cash flows.
 
Our results of operations may fluctuate from quarter to quarter, which could affect our business, financial condition and results of operations.
 
Our results of operations may fluctuate from quarter to quarter depending upon several factors, some of which are beyond our control.  These factors include the timing and number of client projects commenced and completed during the quarter, the number of working days in a quarter, employee hiring, attrition and utilization rates and the mix of time-and-material projects versus fixed price deliverable projects and maintenance projects during the quarter.  Additionally, periodically our cost increases due to both the hiring of new employees and strategic investments in infrastructure in anticipation of future opportunities for revenue growth.
 
These and other factors could affect our business, financial condition and results of operations, and this makes the prediction of our financial results on a quarterly basis difficult.  Also, it is possible that our quarterly financial results may be below the expectations of public market analysts.
 
We are heavily dependent on our senior management, and a loss of a member of our senior management team could cause our stock price to suffer.
 
If we lose members of our senior management, we may not be able to find appropriate replacements on a timely basis, and our business could be adversely affected.  Our existing operations and continued future development depend to a significant extent upon the performance and active participation of certain key individuals.  If we were to lose any of our key personnel, we may not be able to find appropriate replacements on a timely basis and our financial condition and results of operations could be materially adversely affected.
 
 
We may not have sufficient working capital in the long term.
 
It is likely we may require additional funds in the long term depending upon the growth of our revenues and our business strategy.  We can give no assurance that we will be able to obtain sufficient debt or equity capital now or in the future to support our operations.  Should we be unable to raise sufficient debt or equity capital, we could be forced to cease operations.
 
Risks Related to our Common Stock
 
We have not paid dividends in the past and do not expect to pay dividends in the future.  Any return on investment may be limited to the value of our common stock.
 
We have never paid cash dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future.  The payment of dividends on our common stock would depend on earnings, financial condition and other business and economic factors affecting us at such time as our Board may consider relevant.  If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if its stock price appreciates.
 
There is a limited market for our common stock which may make it more difficult to dispose of your stock.
 
Our common stock is currently quoted on the OTCQB marketplace.  There is a limited trading market for our common stock.  Accordingly, there can be no assurance as to the liquidity of any markets that may develop for our common stock, the ability of holders of our common stock to sell shares of our common stock, or the prices at which holders may be able to sell their common stock.
 
A sale of a substantial number of shares of our common stock may cause the price of the common stock to decline.
 
If our stockholders sell substantial amounts of our common stock in the public market, the market price of our common stock could fall.  These sales also may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.  Stockholders who have been issued shares in the Merger will not be able to sell their shares pursuant to Rule 144 under the Securities Act of 1933 until one year after this current report is filed with the SEC.
 
Our common stock is subject to the “penny stock” rules of the SEC and the trading market in our securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.
 
The SEC has adopted Rule 3a51-1, which establishes the definition of a “penny stock” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions.  For any transaction involving a penny stock, unless exempt, Rule 15g-9 requires:
 
 
·
that a broker or dealer approve a person’s account for transactions in penny stocks; and
 
 
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that the broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
 
 
In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:
 
 
·
obtain financial information and investment experience objectives of the person; and
 
 
·
make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
 
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form:
 
 
·
sets forth the basis on which the broker or dealer made the suitability determination; and
 
 
·
that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
 
Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions.  Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
 
Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules.  This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.
 
Because certain of our stockholders control a significant number of shares of our common stock, they may have effective control over actions requiring stockholder approval.
 
Our directors, executive officers and principal stockholders, and their respective affiliates, beneficially own 79.6% of our outstanding shares of common stock.  Accordingly, our executive officers, directors and principal stockholders, and their respective affiliates, will have significant influence on the ability to control the company and the outcome of issues submitted to our stockholders.
 
Our articles of incorporation contain some anti-takeover provisions that may inhibit a takeover.
 
The provisions in our articles of incorporation relating to a classified board, delegation to the Board of rights to determine the terms of preferred stock and restrictions on business combination transactions between us and interested stockholders may have the effect not only of discouraging attempts by others to buy us, but also of making it more difficult or impossible for existing shareholders to make management changes.  A classified board, which is made up of directors elected for staggered terms, while promoting stability in Board membership and management, also moderates the pace of any change in control of our Board by extending the time required to elect a majority, effectively requiring action in at least two annual meetings.  The ability of our Board to determine the terms of preferred stock, while providing flexibility in connection with possible business purchases and other corporate purposes, could make it more difficult for a third party to secure a majority of our outstanding common stock.  Finally, restrictions on our ability to complete a business combination transaction with an interested stockholder (subject to various exceptions including approval by directors serving prior to the shareholder’s qualifying interest) may deprive our company of a premium takeover bid.
 
Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and operating results and stockholders could lose confidence in our financial reporting.
 
Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud.  If we cannot provide reliable financial reports or prevent fraud, our operating results could be harmed.  Under the current SEC regulations, we are required to include a management report on internal controls over financial reporting in our annual report on Form 10-K.  Failure to achieve and maintain an effective internal control environment, regardless of whether we are required to maintain such controls, could also cause investors to lose confidence in our reported financial information, which could have a material adverse effect on our stock price.  Although we are not aware of anything that would impact our ability to maintain effective internal controls, we have not obtained an independent audit of our internal controls, and, as a result, we are not aware of any deficiencies which would result from such an audit.  Further, at such time as we are required to comply with the internal controls requirements of the Sarbanes-Oxley Act, we may incur significant expenses in having our internal controls audited and in implementing any changes which are required.
 
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
The following discussion and analysis should be read in conjunction with, and is qualified in its entirety by, our financial statements (and notes related thereto) and other more detailed financial information appearing elsewhere in this current report on Form 8-K.  Consequently, you should read the following discussion and analysis of our financial condition and results of operations together with such financial statements and other financial data included elsewhere in this current report on Form 8-K.  Some of the information contained in this discussion and analysis or set forth elsewhere in this current report on Form 8-K, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties.  You should review the “Risk Factors” section of this current report on Form 8-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
 
Overview
 
On May 26, 2015, we completed a “reverse merger” transaction, in which we, our acquisition subsidiary and Ameri & Partners entered into the Merger Agreement.  On May 26, 2015, our acquisition subsidiary was merged with and into Ameri & Partners, with Ameri & Partners surviving as our wholly-owned subsidiary.  The Merger Agreement specified that each share of common stock of Ameri & Partners would be converted into our common stock.  Immediately prior to the completion of the Merger, we changed our corporate name to AMERI Holdings, Inc. from Spatializer Audio Laboratories, Inc.
 
For the purpose of financing the ongoing business and operations of our company following the Merger, we completed the Private Placement, issuing the Convertible Note in the principal amount of $5,000,000, together with the Warrant, pursuant to the terms of the Securities Purchase Agreement with Lone Star Value.  The Convertible Note is unsecured and will become due on May 26, 2017, the second anniversary of the issue date.  Prior to maturity, the Convertible Note will bear interest at 5% per annum, with interest being paid semiannually on the first day of each of the first and third calendar quarters.  The Convertible Note is convertible into shares of our common stock at a conversion price of $1.80 per share, or an aggregate of 2,777,778 shares of common stock, subject to adjustment under certain circumstances.  The Warrant issued in the Private Placement 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 will expire on May 26, 2020.
 
As a result of the Merger, we are now a next generation technology-management solutions firm.  We have built products and services to assist Global 2000 companies by architecting and delivering the best technology solutions enabling customers to transform their business processes.  We have built a new method of measuring the effectiveness of technology deployments across large and medium size companies.  Through acquisitions, we have built deep consulting expertise in business process management and enterprise resource planning particularly surrounding SAP software and technology.
 
As part of the transaction, we purchased 24.9% of the outstanding shares of Ameri India’s common stock from the two shareholders of Ameri India for aggregate consideration consisting of $1.00 and the consideration being furnished by us to the stockholders of Ameri & Partners under the Merger Agreement, pursuant to the terms of the Ameri India Purchase Agreement, dated as of May 26, 2015.  Subject to obtaining various regulatory approvals for foreign ownership required under India’s Foreign Exchange Management Act, we have agreed to purchase the remaining 75.1% of the outstanding shares of Ameri India for similar consideration.
 
 
The Merger is being accounted for as a “reverse merger,” since the former stockholders of Ameri & Partners own a majority of the outstanding shares of our common stock immediately following the Merger.  No arrangements or understandings exist among present or former controlling stockholders with respect to the election of members of our Board and, to our knowledge, no other arrangements exist that might result in a change of control in the future.  As a result of the issuance of the 11,625,000 shares of our common stock and the change in the majority of our directors, which will become effective upon compliance with Section 14(f) of the Exchange Act and Rule 14f-1 under the Exchange Act, a change in control occurred on the date of the consummation of the Merger.  Following the closing, we will continue to be a “smaller reporting company,” as defined under the Exchange Act.
 
In accordance with the terms of the Private Placement, at the closing, we and Lone Star Value entered into the Registration Rights Agreement, dated as of May 26, 2015, pursuant to which we agreed to file a registration statement with the SEC covering the resale of the shares of common stock into which the Convertible Note is convertible and for which the Warrant is exercisable within 60 days, if and upon the written request of Lone Star Value at any time on or before May 26, 2017.  We are obligated to maintain the effectiveness of the registration statement from its effective date until the later of (a) the date on which all registrable shares covered by the registration statement have been sold, or may be sold without volume or manner of sale restrictions under Rule 144 or (b) the second anniversary of the closing date.  We agreed to use our best efforts to have the registration statement declared effective by the SEC as soon as possible, but in any event within five days after the SEC notifies us that it will not review the registration statement or 60 days after we receive the first written comments on the registration statement from the SEC.  There are no monetary penalties if the registration statement is not filed or does not become effective on a timely basis.
 
Matters that May or Are Currently Affecting Our Business
 
The main challenges and trends that could affect or are affecting our financial results include:
 
 
·
Our ability to enter into additional technology-management and consulting agreements, to diversify our client base, and to expand the geographic areas we serve;
 
 
·
Our ability to attract competent, skilled professionals and on-demand technology partners for our operations at acceptable prices to manage our overhead;
 
 
·
Our ability to raise additional equity capital, if and when we needed; and
 
 
·
Our ability to control our costs of operation as we expand our organization and capabilities.
 
Results of Operations
 
Results of Operations from Continuing Operations for the Year Ended March 31, 2015 as Compared to the Year Ended March 31, 2014
 
   
March 31,
 
   
2015
   
2014
 
Net Revenue
    16,804,379       6,144,402  
Cost of revenue
    15,114,400       5,233,361  
Gross Profit
    1,689,979       911,041  
                 
Operating Expenses:
               
SG&A
    1,015,249       282,819  
Operating income before other income/expense
    674,730       628,222  
Depreciation and amortization
    (33,372 )     (116 )
Interest income
    -       15  
Income before income tax
    641,358       628,121  
Income tax expense
    (218,062 )     (213,561 )
Net Income
    423,296       414,560  
 
 
Revenues
 
Revenues for the year ended March 31, 2015 increased by 63% from the prior year.  Our revenue increase for the period presented is directly attributable to the acquisitions and a combination of increased business with our recurring customers and business with new customers.
 
Our top three customers accounted for 93% of the revenues for the year ended March 31, 2015.
 
We derived 100% of our revenues from our customers located in the United States for the year ended March 31, 2015.
 
Gross margin
 
Our gross margin percentage (gross margin as percentage of revenues) was 10% for the year ended March 31, 2015 as compared to 6.7% for the year ended March 31, 2014.
 
Selling, general and administrative expenses
 
Selling, general and administrative expenses (“SG&A”) include all costs, including rent costs, that are not directly associated with revenue-generating activities.  These include employee costs, corporate costs and facilities costs.  Employee costs include selling, marketing and administrative salaries and related employee benefits, travel, recruiting and training costs.  Corporate costs include costs such as reorganization costs, legal, accounting and outside consulting fees.  Facilities costs primarily include rent and communications costs.
 
Selling, general and administrative expenses for the year ended March 31, 2015 increased by $0.7 million as compared to the year ended March 31, 2014.
 
Employee costs increased by $0.5 million for the year ended March 31, 2015, as compared to the year ended March 31, 2014.
 
Depreciation and amortization costs
 
Depreciation and amortization expense amounted to $33,372 compared to $116 for the prior year.
 
Operating income
 
Our operating income percentage was 4.01% for the year ended March 31, 2015, as compared to 10.22% for the year ended March 31, 2014.  This change was mainly due to an increase in spending in product research and development, SG&A expenses and depreciation and amortization.
 
 
Income taxes
 
Our provision for income taxes has been at the rate of 34% for the years ended March 31, 2015 and 2014, amounting to $ 0.22 million and $0.21 million, respectively.
 
Liquidity and Capital Resources
 
For the purpose of financing the ongoing business and operations of our company following the Merger, on May 26, 2015, we completed the Private Placement, issuing the Convertible Note in the principal amount of $5,000,000, together with the Warrant, pursuant to the terms of the Securities Purchase Agreement with Lone Star Value.  The Convertible Note is unsecured and will become due on May 26, 2017, the second anniversary of the issue date.  Prior to maturity, the Convertible Note will bear interest at 5% per annum, with interest being paid semiannually on the first day of each of the first and third calendar quarters.  From and after an event of default and for so long as the event of default is continuing, the Convertible Note will bear default interest at the rate of 10% per annum.  The Convertible Note can be prepaid by us at any time without penalty.
 
The Convertible Note is convertible into shares of our common stock at a conversion price of $1.80 per share, or an aggregate of 2,777,778 shares of common stock, subject to adjustment under certain circumstances.  The Convertible Note ranks senior to all of our other obligations, except for trade payables in the ordinary course of business, purchase money asset financing and any inventory or receivables-based credit facility that we may obtain in the future, provided that the amount of the credit facility does not exceed 50% of eligible inventory and 80% of eligible receivables.  The Convertible Note also includes certain negative covenants including, without Lone Star Value’s approval, restrictions on debt and security interests, mergers and the purchase and sale of assets, dividends and other restricted payments, and investments.
 
The Warrant issued in the Private Placement 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.
 
Our cash balances are held in two accounts at Bank of America in which we hold approximately $0.82 million in cash and cash equivalents as of March 31, 2015.
 
 
The following table summarizes the sources and uses of cash from our consolidated statements of cash flow:
 
Cash Flow ( in $)
           
      2014-2015       2013-2014  
Cash flow from operating activities
               
Net income
    423,296       414,560  
                 
Adjustment to reconcile net income to net cash provided by operating activities
               
Depreciation
    33,372       116  
Changes in assets and liabilities
               
Increase (decrease) in:
               
Accounts Receivable
    (44,282 )     (2,937,292 )
Other current assets
    (58,508 )     (125,864 )
Security deposit
    (3,750 )     -  
 
Increase (decrease) in:
               
Accounts Payable and accrued expenses
    133,783       2,802,825  
Other current liabilities
    146,791       -  
Taxes payable
    191,657       213,561  
Net cash provided by operating activities
    826,109       367,906  
Cash flow from investing activities
               
Purchase of fixed assets
    (35,194 )     (3,200 )
Customer list investments
    (125,000 )     -  
Net cash used in investing activities
    (500,194 )     (3,200 )
Cash flow from financing activities
               
Issuance of Capital
    125,000       10,000  
Net increase in cash and cash equivalents
    450,915       374,706  
Cash at the end of the year
  $ 825,621     $ 374,706  

Operating Activities
 
Our largest source of operating cash flows is cash collections from our customers for different information technology services we render under various statements of work.  Our primary uses of cash from operating activities are for personnel-related expenditures, leased facilities and taxes.
 
Future Sources of Liquidity
 
We expect our primary source of cash to be positive net cash flows provided by operating activities.  We also continue to focus on cost reductions and have initiated steps to reduce overheads and provide cash savings.
 
 
Based on past performance and current expectations, we expect our existing cash, cash equivalents and short-term investments of $0.82 million as of March 31, 2015, and our ongoing cash flows that are not deemed permanently reinvested, to be sufficient to meet our operating liquidity requirements described above for at least the 12 months following the date of this current report.
 
Off-Balance Sheet Arrangements
 
We do not have any off-balance sheet arrangements.
 
Seasonality
 
Our operations are generally not affected by seasonal fluctuations.  However, our consultants’ billable hours are affected by national holidays and vacation policies, which vary by country.
 
Inflation
 
We do not believe that inflation had a significant impact on our results of operations for the periods presented.  On an ongoing basis, we attempt to minimize any effects of inflation on our operating results by controlling operating costs and, whenever possible, seeking to ensure that billing rates reflect increases in costs due to inflation.
 
For all significant foreign operations, the functional currency is the local currency.  Assets and liabilities of these operations are translated at the exchange rate in effect at each period end.  Statement of Operations accounts are translated at the exchange rate prevailing as of the date of the transaction.  The gains or losses resulting from such translation are reported under accumulated other comprehensive income (loss) as a separate component of equity.  Realized gains and losses from foreign currency transactions are included in other income, net for the periods presented.
 
Significant Accounting Policies
 
Revenue Recognition.   We recognize revenue in accordance with the Accounting Standard Codification 605 “Revenue Recognition.”  Revenue is recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the seller’s price to buyer is fixed and determinable, and (4) collectability is reasonably assured.  We recognize revenue from information technology services as the services are provided.  Service revenues are recognized based on contracted hourly rates, as services are rendered or upon completion of specified contracted services and acceptance by the customer.
 
Accounts Receivable.   We extend credit to clients based upon management’s assessment of their credit-worthiness on an unsecured basis.  We provide an allowance for uncollectible accounts based on historical experience and management evaluation of trend analysis.  We include any balances that are determined to be uncollectible in allowance for doubtful accounts.  The allowances for uncollectible accounts as of March 31, 2015 and for the period from November 27, 2013 (date of inception) to March 31, 2014 were $0.  Based on the information available, management believes our accounts receivable, net of allowance for doubtful accounts, are collectible.
 
Property and Equipment.   Property and equipment is stated at cost.  We provides for depreciation of property and equipment using the straight-line method over the estimated useful lives of the related assets ranging from 3 to 7 years.  Leasehold improvements are amortized using the straight-line method over the shorter of the lease terms or the useful lives of the improvements.  We charge repairs and maintenance costs that do not extend the lives of the assets to expenses as incurred.
 
 
We account for computer software costs developed for internal use in accordance with accounting principles generally accepted in the Unites States, which require companies to capitalize certain qualifying costs during the application development stage of the related software development project and to exclude the initial planning phase that determines performance requirements, most data conversion, general and administrative costs related to payroll and training costs incurred.  Whenever a software program is considered operational, we consider the project to be completed, place it into service, and commence amortization of the development cost in the succeeding month.
 
Concentrations.   For the fiscal year ended March 31, 2015, sales to three major customers accounted for 93% of total revenue.  These same customers accounted for 85% of the accounts receivable balance at March 31, 2015.  For the period from November 27, 2013 (date of inception) to March 31, 2014, sales to one customer accounted for 100% of total revenue.  The same customer accounted for 100% of the accounts receivable balance at March 31, 2014.  We maintain cash balances in two financial institutions.  The balances are generally insured by the Federal Deposit Insurance Corporation up to $250,000 per institution.  At March 31, 2015 and 2014, we had cash balances totaling $825,621 and $374,706, respectively, held in different institutions.
 
New Accounting Pronouncements
 
In August 2014, the Financial Accounting Standards Board (“FASB”) issued amended guidance related to disclosure of uncertainties about an entity’s ability to continue as a going concern.  The new guidance requires management to evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern and, as necessary, to provide related footnote disclosures.  The guidance has an effective date of December 31, 2016.  We believe that the adoption of this new standard will not have a material impact on our consolidated financial statements.
 
In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standard Update, or ASU, 2014-09- Revenue from Contracts with Customers , which provides a single, comprehensive revenue recognition model for all contracts with customers.  The core principal of this ASU is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  This ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.  This ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2016.  Early adoption is not permitted.  We are currently evaluating the impact this ASU will have on our consolidated financial statements.
 
In January 2015, the Financial Accounting Standards Board, or FASB, issued Accounting Standard Update, or ASU, 2015-01- Income Statement-Extraordinary and Unusual Items , which seeks to simplify income statement presentation by eliminating the concept of Extraordinary Items.  This Update eliminates from GAAP the concept of extraordinary items.  Subtopic 225-20, Income Statement—Extraordinary and Unusual Items, required that an entity separately classify, present, and disclose extraordinary events and transactions.  The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015.  A reporting entity may apply the amendments prospectively.  A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements.  Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption.
 
 
Directors and Executive Officers, Promoters and Control Persons
 
The names, ages and positions of our directors, executive officers, key employees and director nominees, whose appointment to our Board is subject to our compliance with Section 14(f) of the Exchange Act and Rule 14f-1 under the Exchange Act, as of May 26, 2015, are as follows:
 
Name
 
Age
 
Position
Jeffrey E. Eberwein
 
44
 
Chairman of the Board
         
Srinidhi “Dev” Devanur
 
49
 
Executive Vice Chairman of the Board and Director Nominee
         
Giri Devanur
 
45
 
President, Chief Executive Officer and Director
         
Dimitrios J. Angelis
 
45
 
Director Nominee
         
Dr. Arthur M. Langer
 
55
 
Director Nominee
         
Robert G. Pearse
 
55
 
Director Nominee
         
Robert Rosenberg
 
63
 
Director Nominee
         
Kyle Hartley
 
46
 
Director
         
Hannah M. Bible
 
35
 
Director
         
Srirangan “Ringo” Rajagopal
 
45
 
Executive Vice President - Client Relations
         
Brunda Jagannath
 
34
 
Vice President - Finance
         
Anand Sundar
 
47
 
Executive Vice President - Enterprise Systems
         
Carlos Fernandez
 
50
 
Executive Vice President - Strategic Initiatives
         
Rajesh Sundar
 
44
 
Executive Vice President - Products
         
Manjunath Dattatreya
 
46
 
Executive Vice President - Human Capital
 
The principal occupations for the past five years (and, in some instances, for prior years) of each of our directors and executive officers are as follows:
 
Jeffrey E. Eberwein became our Chairman of the Board at the closing of the Merger.  Mr. Eberwein is a Lone Star Value designee on the Board.  He has 23 years of Wall Street experience and is the Founder and Chief Executive Officer of Lone Star Value Management, LLC, an investment firm, and the portfolio manager of Lone Star Value Investors, LP, a fund managed by Lone Star Value Management.  Prior to founding Lone Star Value Management in January 2013, Mr. Eberwein was a Portfolio Manager at Soros Fund Management from January 2009 to December 2011, and Viking Global Investors from March 2005 to September 2008.  Mr. Eberwein is the Chairman of the Board of three public companies: Digirad Corporation, a medical imaging company, Crossroads Systems, Inc., a data storage company, Aetrium Incorporated, a modular building company, and serves as a director of Novation Companies, Inc., a specialty finance company, since April 2015.  Mr. Eberwein also serves on the Board of Hudson Global, a global recruitment company where he chairs the Corporate Governance and Nominating Committee.  Mr. Eberwein served on the Board of The Goldfield Corporation from May 2012 until May 2013, On Track Innovations Ltd. from December 2012 until March 2014, and NTS, Inc. from December 2012 until its sale to a private equity firm in June 2014.  Mr. Eberwein served on the Board of Hope for New York, a charitable organization dedicated to serving the poor in New York City, from 2011 until 2014, where he was the Treasurer and on its Executive Committee.  Mr. Eberwein earned an M.B.A. from The Wharton School, University of Pennsylvania, and a B.B.A. degree with High Honors from The University of Texas at Austin.  The Board believes that Mr. Eberwein’s qualifications to serve on the Board include his expertise in finance and experience in the investment community.
 
 
Srinidhi “Dev” Devanur will become our Executive Vice Chairman and a member of our Board upon compliance with Section 14(f) of the Exchange Act and Rule 14f-1 under the Exchange Act.  Srinidhi “Dev” Devanur is a representative of Ameri & Partners on the Board.  He is a seasoned technology entrepreneur who has more than 20 years of experience in the IT services industry with a specialization in sales and resource management.  He has built businesses from ground up and has successfully executed acquisitions, mergers and corporate investments.  He has managed the sales function by working closely with various Fortune 500 customers in the United States and India to sell software solutions, support and staff augmentation related services.  Srinidhi “Dev” Devanur co-founded Ivega Corporation in 1997, an international niche IT consulting company with special focus on financial services which merged with TCG in 2004, creating a 1,000+ person focused differentiator in the IT consulting space.  Following this, he founded SaintLife Bio-pharma Pvt. Ltd., which was acquired by a Nasdaq listed company.  Srinidhi “Dev” Devanur has a bachelor’s degree in electrical engineering from the University of Bangalore, India and has also attended a Certificate program in Strategic Sales Management at the University of Chicago Booth School of Business.  The Board believes that Mr. Devanur’s qualifications to serve on the Board include his background in the IT services industry and his experience in business development.
 
Giri Devanur became a member of our Board at the closing of the Merger.  Giri Devanur is a representative of Ameri & Partners on the Board.  He is a seasoned chief executive officer who has raised seed capital, venture capital and private equity from global institutions.  He has successfully executed acquisitions, mergers and corporate investments.  He has more than 25 years of experience in the information technology industry.  Previously, he founded WinHire Inc. in 2010, an innovative company building software products through technology and human capital management experts and combining them with professional services.  He co-founded Ivega Corporation in 1997, an international niche IT consulting company with special focus on financial services which merged with TCG in 2004, creating a 1,000+ person focused differentiator in the IT consulting space.  Giri Devanur has a Master’s degree in Technology Management from Columbia University and a bachelor’s degree in computer engineering from the University of Mysore, India.  He has attended Executive Education programs at the Massachusetts Institute of Technology and Harvard Law School.  The Board believes that Mr. Devanur’s qualifications to serve on the Board include his substantial experience in the information technology industry and his prior experience as a chief executive officer.
 
Dimitrios J. Angelis will become a member of our Board upon compliance with Section 14(f) of the Exchange Act and Rule 14f-1 under the Exchange Act.  Mr. Angelis is a Lone Star Value designee on the Board.  Mr. Angelis has served as the Chief Executive Officer of OTI America Inc., the U.S.-based subsidiary of publicly-held On Track Innovations Ltd., a pioneer of cashless payment technology, since December 2013.  Mr. Angelis has served as a director of On Track Innovations since December 2012, and served as its Chairman from April 2013 until February 2015.  From October 2012 until December 2013, Mr. Angelis served as the General Counsel of Wockhardt Inc., a biologics and pharmaceutical company.  From October 2008 to October 2012, Mr. Angelis was a senior counsel at Dr. Reddy’s Laboratories, Ltd., a publicly-traded pharmaceutical company, and during 2008 he was the Chief Legal Officer and Corporate Secretary of Osteotech, Inc., a publicly-traded medical device company, with responsibility for managing the patent portfolio of approximately 42 patents.  Prior to that, Mr. Angelis worked in the pharmaceutical industry in various corporate, strategic and legal roles.  In addition, he worked for McKinsey & Company, Merrill Lynch and the Japanese government more than five years ago.  He began his legal career as a transactional associate with law firm Mayer Brown.  Mr. Angelis holds a B.A. degree in Philosophy and English from Boston College, an M.A. in Behavioral Science from California State University and J.D. from New York University School of Law.  The Board believes that Mr. Angelis’ substantial experience as an accomplished attorney, negotiator and general counsel to public and private companies will enable him to bring a wealth of strategic, legal and business acumen to the Board, well qualifying him to serve as a director.
 
 
Dr. Arthur M. Langer will become a member of our Board upon compliance with Section 14(f) of the Exchange Act and Rule 14f-1 under the Exchange Act.  Dr. Langer is a representative of Ameri & Partners on the Board.  He is the Director of the Center for Technology Management and Academic Director of the Executive Master of Science in Technology Management Program at Columbia University.  Dr. Langer serves on the faculty of the Department of Organization and Leadership at the Graduate School of Education (Teachers College).  He is also an elected member of the Executive Committee of the Columbia University Faculty Senate.  Dr. Langer joined the faculty at Columbia University in 1984.  Dr. Langer is the author of Strategic IT: Best Practices for Managers and Executives (2013, with Lyle Yorks), Guide to Software Development: Designing & Managing the Life Cycle (2012), Information Technology and Organizational Learning (2011), Analysis and Design of Information Systems (2007), Applied Ecommerce (2002), and The Art of Analysis (1997), and has numerous published articles and papers relating to service learning for underserved populations, IT organizational integration, mentoring and staff development.  Dr. Langer consults with corporations and universities on information technology, staff development, management transformation and curriculum development around the globe.  Dr. Langer is also the Chairman and Founder of Workforce Opportunity Services, a non-profit social venture that provides scholarships and careers to underserved populations around the world.  Prior to joining the faculty at Columbia University, Dr. Langer was Executive Director of Computer Support Services at Coopers & Lybrand, General Manager and Partner of Software Plus, and President of Macco Software more than five years ago.  Dr. Langer holds a B.S. in Computer Science, an M.B.A. in Accounting/Finance, and a Doctorate of Education from Columbia University.  The Board believes Dr. Langer’s qualifications to serve on the Board include his expertise in technology management and his vast experience within the information technology industry.
 
Robert G. Pearse will become a member of our Board upon compliance with Section 14(f) of the Exchange Act and Rule 14f-1 under the Exchange Act.  Mr. Pearse is a Lone Star Value designee on the Board.  Mr. Pearse currently serves as a Managing Partner at Yucatan Rock Ventures, where he specializes in technology investments and consulting, and has served in that position since August 2012.  Mr. Pearse serves as a director for Novation Companies, Inc., a publicly-held company, since April 2015.  Mr. Pearse serves as a director for Aviat Networks, Inc., and member of the Compensation Committee and Nominating and Governance Committee since January 2015.  Mr. Pearse serves as a director for Crossroads Systems, Inc. and Chairman of the Compensation Committee, and member of the Audit Committee and Nominating and Governance Committee since July 2013.  From 2005 to 2012, Mr. Pearse served as vice president of strategy and market development at NetApp, Inc., a publicly-traded computer storage and data management company.  Mr. Pearse played an influential role leading NetApp’s growth strategy, which drove the firm to become a Fortune 500 company during his tenure.  From 1987 to 2004, Mr. Pearse held leadership positions at Hewlett-Packard, most recently as its vice president of strategy and corporate development from 2001 to 2004, focusing on business strategy, business development and acquisitions.  Mr. Pearse’s professional experience also includes positions at PricewaterhouseCoopers LLP, Eastman Chemical Company and General Motors Company more than five years ago.  Mr. Pearse earned an M.B.A. degree from the Stanford Graduate School of Business and a B.S. degree in Mechanical Engineering from the Georgia Institute of Technology.  The Board believes Mr. Pearse’s qualifications to serve on the Board include his extensive business development and financial expertise and his extensive background in the technology sector.
 
 
Dr. Robert Rosenberg will become a member of our Board upon compliance with Section 14(f) of the Exchange Act and Rule 14f-1 under the Exchange Act.  Dr. Rosenberg is a representative of Ameri & Partners on the Board.  Dr. Rosenberg is the director of entrepreneurship programs at the Polsky Center for Entrepreneurship and Innovation and adjunct associate professor of entrepreneurship since 2008.  He has served in a variety of senior administrative roles at the University of Chicago, most recently as associate vice president for marketing strategy and associate vice president for research.  Dr. Rosenberg came to the University of Chicago in 1989 as director of industrial relations and technology at the University of Chicago Medical Center.  Dr. Rosenberg was a founder of the Illinois Biotechnology Industry Organization and the Midwest Research University Network.  He is a director of Illinois’ Technology Development Fund, a board member of Manufacturing Renaissance, and a co-chair of Hyde Park Angels Healthcare Ambassador Circle.  Dr. Rosenberg earned a B.A. degree in English from Harvard University, a master’s degree in English literature from Tufts University, and an M.B.A. from the University of Chicago Booth School of Business.  The Board believes that Dr. Rosenberg’s qualifications to serve on the Board include his background and expertise in entrepreneurship.
 
Kyle Hartley has served as our Chairman of the Board, President, Chief Executive Officer and Chief Financial Officer since April 2014, and resigned as an officer of the company at the closing of the Merger and resigned as a director upon the director nominees named above becoming directors.  Mr. Hartley is the Chief Operating Officer of Lone Star Value Management, LLC.  Mr. Hartley also serves as chairman of the board of directors and chief operating officer and chief financial officer of Reliability Incorporated.  Mr. Hartley has more than 15 years of experience in the investment industry, including more than 12 years in senior management positions at alternative investment firms.  Prior to joining Lone Star Value Management, LLC in May 2013, Mr. Hartley was the CFO/COO of Greenheart Capital Partners, a global emerging market long/short equity hedge fund firm spun out of Shumway Capital.  From March 2008 through November 2011, Mr. Hartley was the CFO/COO/CCO of Apis Capital Advisors, a $750 million (peak AUM) global long/short equity hedge fund firm investing primarily in small cap value equities.  From April 2006 through March 2008, Mr. Hartley served as the head of marketing and client services at Mercury Partners, a $1 billion+ global long/short equity hedge fund firm focused on the real estate sector.  From June 2004 to March 2006, Mr. Hartley was a Managing Director, the head of operational due diligence and a member of the Investment Committee of Taylor Investment Advisors, a hedge fund investment firm founded by the late Tommy Taylor.  Mr. Hartley’s initial position in the hedge fund industry was as the CFO/COO of CQ Capital, a long/short equity, technology-media- telecom sector hedge fund firm from 2002 to 2004.  Prior to CQ Capital, Mr. Hartley served as a Director of Business Development at Greenwich Associates, a financial industry market-research and consulting firm, and as a Vice President in the Investment Banking division of Forum Capital Markets prior to its acquisition by First Union Securities.  Mr. Hartley started his career at Clarion Marketing and Communications from 1992 to 1997.  Mr. Hartley earned an M.B.A. with Distinction from New York University’s Leonard N. Stern School of Business and a B.A. from Dartmouth College.
 
Hannah M. Bible has served as a director of our company since 2014, and resigned as a director upon the director nominees named above becoming directors.  Ms. Bible is the chief compliance officer of Lone Star Value Management, LLC.  Ms. Bible also serves as a director of Reliability Incorporated.  Ms. Bible has more than eight years of combined legal and accounting experience across a variety of industries.  Prior to joining Lone Star Value in June 2014, Ms. Bible was the Director of Finance/CFO at Trinity Church in Greenwich, Connecticut.  From October 2011 to December 2012, Ms. Bible served as a legal advisor to RRMS Advisors, a company providing advisory and due diligence services to banking and other institutions with high risk assets.  From June 2009 to December 2013, Ms. Bible advised family fund and institutional clients of International Consulting Group, Inc., and its affiliates within the Middle East on matters of security, corporate governance and U.S. legal compliance.  From 2006 to 2008, Ms. Bible served within the U.N. General Assembly as a diplomatic advisor to the Asian-African Legal Consultative Organization, a permanent observer mission to the United Nations.  Since 2007 Ms. Bible has taught as an Adjunct Professor at Thomas Jefferson School of Law, within the International Tax and Financial Services program.  Prior to this, Ms. Bible held various accounting positions with Samaritan’s Purse, a large $300 million charitable organization dedicated to emergency relief and serving the poor worldwide.  Ms. Bible earned an L.L.M. degree in Tax from New York University School of Law, a J.D. with honors from St. Thomas University School of Law and a B.B.A. in Accounting from Middle Tennessee State University.
 
 
Key Employees
 
Srirangan “Ringo” Rajagopal became our Executive Vice President - Client Relations at the closing of the Merger.  Prior to the Merger, Mr. Rajagopal served in a similar position at Ameri & Partners since April 2012.  Mr. Rajagopal has more than two decades of experience in managing operations, sales and human capital management in large and entrepreneurial start-ups.  Prior to joining Ameri & Partners, Mr. Rajagopal was Senior Vice President – Business Consulting at Pride Global, a private equity holding company, from February 2008 to April 2012, and was Managing Partner, Co-Founder and Head of Human Capital Management at WinHire Inc. from April 2012 to May 2014, and briefly consulted for other firms from May 2014 to October 2014 before returning to the Ameri & Partners team.  Mr. Rajagopal has also held positions at TCGlvega, Accenture, Infosys Technologies and ABC Consultants more than five years ago.
 
Brunda Jagannath became our Vice President - Finance at the closing of the Merger.  Prior to the Merger, Ms. Jagannath served as Vice President - Finance at Ameri & Partners since January 2013, leading the finance, legal and human resources functions.  Prior to joining Ameri & Partners, Ms. Jagannath was on sabbatical from February 2012 to January 2013 and previously worked as a senior accountant at LSI Corporation, a Nasdaq-listed company, from August 2005 to February 2012.  Previously, Ms. Jagannath worked at Ivega Corporation from 2003 to 2005, with responsibilities over the finance, accounting and audit functions of the company’s India operations.
 
Anand Sundar became our Executive Vice President – Enterprise Systems at the closing of the Merger.  Prior to the Merger, Mr. Sundar served in a similar position at Ameri & Partners since March 2015.  Anand Sundar was a partner at Linear Logics Corp. from January 2009 to March 2015.  Previously, he has served as a consultant to several SAP customers implementing and integrating purchasing, business planning, manufacturing execution, reporting and process modeling.  Anand Sundar has 18 years of experience in Executive Management, Business Process Design and Systems Integration, of which over 14 years has exclusively been in the implementation of SAP Products such as SAP-ERP, SAP-SCM, Business Intelligence (BI) SAP-CRM and SRM.  Anand Sundar is a certified SCOR Professional.
 
Carlos Fernandez became our Executive Vice President - Strategic Initiatives at the closing of the Merger.  Prior to the Merger, Mr. Fernandez served in a similar position at Ameri & Partners since November 2014 after joining the Ameri & Partners team as a consultant in March 2014.  Mr. Fernandez has more than 25 years of experience in the publishing and financial industry.  Prior to joining Ameri & Partners, Mr. Fernandez held multiple positions at Thomson Reuters from 2006 to March 2014, most notably delivering a $100 million SAP consolidation initiative.  Mr. Fernandez earned a master’s degree in technology management from Columbia University and an engineering degree from The City College of New York.
 
 
Rajesh Sundar became our Executive Vice President - Products at the closing of the Merger.  Prior to the Merger, Rajesh Sundar served in a similar position at Ameri & Partners since January 2015.  Prior to joining Ameri & Partners, Rajesh Sundar worked at Linear Logics from 2005 to January 2015.  Rajesh Sundar has more than 20 years of Business Process and Systems Integration experience in various industries and sectors, and more than 15 years of implementation experience in SAP products.  Rajesh Sundar is a certified SCOR professional.
 
Manjunath Dattatreya became our Executive Vice President - Human Capital at the closing of the Merger.  Prior to the Merger, Mr. Dattatreya served in a similar position at Ameri & Partners since March 2015.  Mr. Dattatreya comes with more than 25 years of experience in the IT industry and has held various senior management and board positions.  Prior to joining Ameri & Partners, Mr. Dattatreya worked as a human resources consultant for various companies from January 2010 to March 2015.  He was part of the core team of Intelligroup Inc. from April 1995 to May 2005, serving as the company’s Vice President of Talent Management. 
 
All directors hold office until the expiration of their respective term, in 2016, 2017 or 2018, at each year’s annual meeting of stockholders and the election and qualification of their successors.  Officers are elected annually by the Board and serve at the discretion of the Board.
 
Board Committees
 
We have not previously had an audit committee, compensation committee or nominations and corporate governance committee.  Within 90 days after the closing of the Merger, we anticipate that the Board will authorize the creation of such committees, in compliance with established corporate governance requirements.
 
Director Compensation
 
Directors are expected to timely and fully participate in all regular and special board meetings, and all meetings of committees that they serve on.  We intend to compensate non-management directors in the future through an annual grant of stock options pursuant to the 2015 Equity Incentive Award Plan.  Such option awards will have an exercise price not less than 100% of the fair market value of our common stock, based on the value of such shares of common stock on the date the option is granted, and will become vested and exercisable as determined by the compensation committee or the entire Board.  Other terms and conditions of the option grants will be on the terms and conditions as determined by the compensation committee or the entire Board when the options are granted.
 
Indebtedness of Directors and Executive Officers
 
Except as set forth in “Certain Relationships and Related Transactions”, none  of our directors or executive officers or their respective associates or affiliates is currently indebted to us.
 
Family Relationships
 
Giri Devanur and Srinidhi “Dev” Devanur are brothers, and Anand Sundar and Rajesh Sundar are brothers.  Other than these individuals, there are no family relationships among our directors and executive officers.
 
 
Legal Proceedings
 
As of the date of this current report, there is no material proceeding to which any of our directors, executive officers, affiliates or stockholders is a party adverse to us.
 
2015 Equity Incentive Award Plan
 
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.  Prior to the closing of the Transaction, no stock options to purchase shares of our common stock had been issued under the Plan.  A summary of the Plan is set forth below.
 
Summary of the Plan
 
Administration of the Plan .  The Plan is to be administered by the Compensation Committee consisting of two or more directors who are “non-employee directors” within the meaning of Rule 16b-3, and “outside directors” within the meaning of Section 162(m) of the Code.  In the event that for any reason the Compensation Committee is unable to act or if the Compensation Committee at the time of any grant, award or other acquisition under the Plan does not consist of two or more “non-employee directors,” or if there is no such committee, then the Plan will be administered by the Board of Directors, except to the extent such Board of Directors action would have adverse consequences under Section 16(b) of the Securities Exchange Act or Code Section 162(m).
 
Subject to the other provisions of the Plan, the Compensation Committee will have the authority, in its discretion: (i) to grant cash-based awards, nonqualified stock options, incentive stock options, SARs, restricted stock, restricted stock units, performance shares, performance units and other stock-based awards, all of which are referred to collectively as “Awards”; (ii) to determine the terms and conditions of each Award granted (which need not be identical); (iii) to interpret the Plan and all Awards granted thereunder; and (iv) to make all other determinations necessary or advisable for the administration of the Plan.
 
Eligibility .  The persons eligible for participation in the Plan as recipients of Awards include employees, consultants and directors to our company or any subsidiary or affiliate of our company.  In selecting participants, and determining the number of shares of common stock covered by each Award, the Compensation Committee may consider any factors that it deems relevant.
 
Shares Subject to the Plan .  Subject to the conditions outlined below, the total number of shares of common stock which may be issued pursuant to Awards granted under the Plan may not exceed 2,000,000 shares of common stock.  The Plan provides for annual limits on the size of Awards for any particular participant.
 
 
In the event of certain corporate events or transactions (including, but not limited to, the sale of all, or substantially all, of our assets or a change in our shares or capitalization), the Compensation Committee, in its sole discretion, in order to prevent dilution or enlargement of a participant’s rights under the Plan, will substitute or adjust, as applicable, and subject to certain Code limitations, the number and kind of shares of common stock that may be issued under the Plan or under particular forms of Awards, the number and kind of shares of common stock subject to outstanding Awards, the option price or grant price applicable to outstanding Awards, the annual Award limits, and other value determinations applicable to outstanding Awards.
 
Options .  An option granted under the Plan is designated at the time of grant as either an incentive stock option or as a non-qualified stock option.  Upon the grant of an option to purchase shares of common stock, the Compensation Committee will specify the option price, the maximum duration of the option, the number of shares of common stock to which the option pertains, the conditions upon which an option will become vested and exercisable, and such other provisions as the Compensation Committee will determine which are not inconsistent with the terms of the Plan.  The purchase price of each share of common stock purchasable under an option will be determined by the Compensation Committee at the time of grant, but may not be less than 100% of the fair market value of such share of common stock on the date the option is granted.  No option will be exercisable later than the sixth anniversary date of its grant.
 
SARs .  SARs, which may be issued in tandem with options or be freestanding, will be exercisable at such time or times and subject to such terms and conditions as determined by the Compensation Committee.  The term of SARs granted under the Plan will be determined by the Compensation Committee, in its sole discretion, and except as determined otherwise by the Compensation Committee, no stock appreciation right will be exercisable later than the sixth anniversary date of its grant.
 
Restricted Stock and Restricted Stock Units .  Shares of restricted stock and/or restricted stock units may be granted under the Plan aside from, or in association with, any other Award and will be subject to certain conditions and contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Compensation Committee deems desirable.
 
Cash-Based Awards and Other Stock-Based Awards .  Subject to the provisions of the Plan, the Compensation Committee may grant cash-based awards or other types of equity-based or equity-related awards not otherwise described by the terms of the Plan (including the grant or offer for sale of unrestricted shares of Common Stock) in such amounts and subject to such terms and conditions, as the Compensation Committee will determine.  Such Awards may involve the transfer of actual shares of common stock to participants, or payment in cash or otherwise of amounts based on the value of shares of common stock.  Each cash-based award will specify a payment amount or payment range as determined by the Compensation Committee.
 
Restrictions on Transferability .  The Awards granted under the Plan are not transferable and may be exercised solely by a participant or his authorized representative during his lifetime or after his death by the person or persons entitled thereto under his will or the laws of descent and distribution or his designation of beneficiary or as otherwise required by law.  Any attempt to transfer, assign, pledge or otherwise dispose of, or to subject to execution, attachment or similar process, any Award contrary to the provisions set forth in the Plan will be void and ineffective and will give no right to the purported transferee.
 
Change in Control .  The Compensation Committee may provide for the acceleration of the vesting and exercisability of outstanding options, vesting of restricted stock and restricted stock units and earlier exercise of freestanding SARs, in the event of a Change in Control of our company.  However, if the Compensation Committee takes no action at the time of the Change in Control, and the initial Award does not otherwise specify, accelerated vesting and exercisability is contingent upon termination of employment by us or by the participant for Good Reason within two years of the Change in Control.
 
 
Termination of the Plan .  Unless sooner terminated as provided therein, the Plan will terminate six years from April 20, 2015, the date the Plan was approved by stockholders.  The termination of the Plan will not adversely affect any Awards granted prior to Plan termination.
 
Amendments to the Plan .  The Compensation Committee may at any time alter, amend, modify, suspend or terminate the Plan and any evidence of Award in whole or in part; provided, however, that, without the prior approval of our stockholders, options issued under the Plan to any individual will not be repriced, replaced, or regranted through cancellation, and no amendment of the Plan will be made without stockholder approval if stockholder approval is required by law, regulation, or stock exchange rule; and except where required by tax law, without the prior written consent of the participant, no modification will adversely affect an Award under the Plan.  The Compensation Committee can not issue any Awards while the Plan is suspended.
 
Grants Under the Plan
 
Following the closing of the Merger and the Private Placement, the Board approved the grant of stock options to purchase an aggregate of 100,000 shares of our common stock under the Plan.
 
Executive Compensation
 
Summary Compensation Table
 
The following table provides certain summary information concerning compensation awarded to, earned by or paid to our Chief Executive Officer and our two other highest paid executive officers whose total annual salary and bonus exceeded $100,000 (collectively, our named executive officers) for fiscal years 2014 and 2013.
 
Name & Principal Position
 
Year
 
Salary ($)
 
Bonus ($)
 
Stock Awards ($)
 
Option Awards ($)
 
Non-Equity Incentive Plan Compensa­tion ($)
 
Change in Pension Value and Non-Qualified Deferred Compensa­tion Earnings ($)
 
All Other Compensa­tion ($)
 
Total ($)
 
Kyle Hartley (1)
 
2014
  -   -   -   -   -   -   -   -  
Former Pres., CEO, CFO, Secretary and Treasurer
 
2013
  -   -   -   -   -   -   -   -  
                                       
Giri Devanur (2)
 
2014
  120,000   60,000   -   -   -   -   -   180,000  
Pres. and CEO
 
2013
 
80,000
 
-
  -   -   -   -   -  
80,000
 
                                       
Srinidhi “Dev” Devanur (3)
 
2014
  75,000   -   -   -   -   -   -   75,000  
Executive Vice Chairman of the Board
 
2013
 
40,000
 
-
  -   -   -   -   -  
40,000
 
 
_______________
 
(1)
Kyle Hartley was appointed to his positions on April 25, 2014 and resigned from them on May 26, 2015.
 
(2)
Giri Devanur was appointed to his positions on May 26, 2015.
 
(3)
Srinidhi “Dev” Devanur was appointed to his positions on May 26, 2015.
 
 
40

 
 
Outstanding Equity Awards at Fiscal Year-End
 
The named executive officers did not hold unexercised options or any other stock awards as of the end of our fiscal year ended March 31, 2015 or the period from November 27, 2013 (date of inception) to March 31, 2014.  As such, the Outstanding Equity Awards at Fiscal Year-End table has been omitted.
 
Employment Agreements
 
We entered into employment agreements with Giri Devanur and Srinidhi “Dev” Devanur effective at the closing of the Merger.  The employment agreements appoint Giri Devanur as our President and Chief Executive Officer and Srinidhi “Dev” Devanur as our executive Vice Chairman of the Board for three years following the closing date.  The employment agreements provide that each executive will receive an annual salary of $120,000 and $120,000 per year, respectively, with a bonus for each of $50,000 per year, at the discretion of the Board.  The employment agreements provide that if, during the term of their employment, they are terminated by us other than for “Cause” or they resign for “Good Reason,” then they will continue to receive for a period of one year following such termination their then current salary payable on the same basis as they were then being paid.  Termination for “Cause” means: (i) deliberate refusal or deliberate failure to carry out any reasonable order, consistent with their position, of our Board of Directors after reasonable written notice; (ii) a material and willful breach of the employment agreement, their confidentiality and non-competition agreement or similar agreements with us; (iii) gross negligence or willful misconduct in the execution of their assigned duties; (iv) engaging in repeated intemperate use of alcohol or drugs; or (v) conviction of a felony or other serious crime.  “Good Reason” means (i) they shall have been assigned duties materially inconsistent with their position; (ii) their salary is reduced more than 15% below its then current level; or (iii) material benefits and compensation plans then currently in existence are not continued in effect for their benefit.
 
The employment agreements also incorporate the terms of our confidentiality and non-competition agreement, which contain covenants (a) restricting the executive from engaging in any activity competitive with our business during the term of the employment agreement and for a period of two years thereafter, (b) prohibiting the executive from disclosing confidential information regarding us at any time, and (c) soliciting our employees, customers and prospective customers during the term of the employment agreement and for a period of two years thereafter.
 
 
Security Ownership of Certain Beneficial Owners and Management
 
The following table sets forth information regarding the beneficial ownership of our common stock as of May 26, 2015, by (a) each person who is known by us to beneficially own 5% or more of our common stock, (b) each of our present directors, proposed directors and executive officers, and (c) all of our present directors, proposed directors and executive officers as a group.
 
Name (1)
 
Number of Shares Beneficially Owned
   
Percentage of Shares Beneficially Owned (2)
 
Executive Officers, Present Directors and Proposed Directors (3) :
           
Jeffrey E. Eberwein (4)
    6,111,142       33.8 %
Srinidhi “Dev” Devanur
    5,977,125       47.8 %
Giri Devanur
    2,179,125       17.4 %
Dimitrios J. Angelis
    -       -  
Dr. Arthur M. Langer
    50,625       *  
Robert G. Pearse
    -       -  
Robert Rosenberg
    55,125       *  
Kyle Hartley
    -       -  
Hannah M. Bible
    -       -  
All executive officers, present directors and proposed directors as a group (9 persons)
 
    14,373,142       79.6 %
5% Stockholders:
 
               
Lone Star Value Investors, LP (4)
    6,111,142       33.8 %
 
_______________
*
Less than one percent of outstanding shares.
 
(1)
The address of each person is c/o AMERI Holdings, Inc., 100 Menlo Park Drive, Edison, New Jersey 08837.
 
(2)
The calculation in this column is based upon 12,500,070 shares of common stock outstanding on May 26, 2015.  Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.  Shares of common stock that are currently convertible or exercisable within 60 days of May 26, 2015 are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
 
(3)
The election of Srinidhi “Dev” Devanur, Dimitrios J. Angelis, Dr. Arthur M. Langer, Robert G. Pearse and Robert Rosenberg as directors will become effective upon compliance with Section 14(f) of the Exchange Act and Rule 14f-1 under the Exchange Act.
 
(4)
Includes (a) 555,587 shares of common stock, (b) 2,777,778 shares of common stock reserved for issuance upon the conversion of the Convertible Note, and (c) 2,777,777 shares of common stock reserved for issuance upon the exercise of the Warrant, in each case held of record by Lone Star Value Investors, LP.  Jeffrey E. Eberwein, the managing member of each of the general partner and investment manager of Lone Star Value Investors, LP, may be deemed to beneficially own the 6,111,142 shares held by Lone Star Value Investors, LP.  Mr. Eberwein disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein.  The address of Mr. Eberwein and Lone Star Value Investors, LP is 53 Forest Avenue, 1 st Floor, Old Greenwich, CT 06870.
 
 
Certain Relationships and Related Transactions
 
Ameri & Partners
 
Loans and advances .  As of March 31, 2015, a subsidiary of Ameri & Partners had provided a short-term advance of $138,808 to Giri Devanur, the President and Chief Executive Officer of Ameri & Partners, for educational purposes.  As of March 31, 2014, Ameri & Partners had provided a short-term advance of $41,364 to Srinidhi “Dev” Devanur, the Chairman of Ameri & Partners.  The amounts have been classified under other current assets in the accompanying balance sheet.  The advances have been provided on a short-term basis and do not carry any interest.  Accordingly, no interest income was accrued in the accompanying financial statements.
 
Product development charges – Langer Index .  As of March 31, 2015, Ameri & Partners had paid a total amount of $30,762 to Ameri India (an entity owned by Giri Devanur and Srinidhi “Dev” Devanur) and $147,300 to an entity owned by Giri Devanur for product development charges.
 
License Agreement fees – Langer Index .  On March 26, 2015, we entered into a license agreement with Dr. Arthur M. Langer, a director nominee to our Board, which grants us a license for exclusive, perpetual, irrevocable and worldwide use of the Langer Model to generate the Langer Index.  License fees are payable to Dr. Langer at a rate of $10,000 per customer for the first 100 customer contracts.  Thereafter, the fees are payable at the rate of $5,000 for every 100 customer contracts, which will be payable upon the signing of every block of 100 customers.
 
Consultancy charges.   During the fiscal year ended March 31, 2015 and the period from November 27, 2013 (date of inception) to March 31, 2014, Ameri & Partners received consulting services from Ameri India for a $1,270,225 and $895,000, respectively.  During the year ended March 31, 2015, Ameri & Partners also received consulting services from an entity owned and controlled by Srinidhi “Dev” Devanur.  At the closing of the Merger, the consulting services agreement between Ameri & Partners and Ameri India was terminated.
 
Accounts Payable .  As of March 31, 2015 and 2014, Ameri & Partners had an accounts payable balance of $77,715 and $379,000, respectively, due to Ameri India.
 
Lone Star Value
 
Prior to the Merger, Lone Star Value was our majority stockholder, and each of our directors and sole officer was an officer of Lone Star Value Management, LLC.  On January 15, 2014, we issued 3,267,974 shares of common stock to Lone Star Value, an entity ultimately controlled by Jeffrey E. Eberwein, who was a director at the time of the transaction at $0.0153 per share for total proceeds of $50,000.
 
 
On April 17, 2015, we issued a promissory note in the principal amount of $50,000 to Lone Star Value.  Under the terms of the promissory note, interest on the outstanding principal amount accrues at a rate of 10% per annum, and all amounts outstanding under this promissory note are due and payable on or before April 30, 2020.  We intend to use the proceeds for legal and operating expenses.
 
Lone Star Value provided $5,000,000 in financing to us pursuant to the Private Placement described in this current report.  Lone Star Value has the right to designate three of our seven directors, and Mr. Eberwein, the founder and Chief Executive Officer of Lone Star Value Management, LLC, is our Chairman of the Board.
 
Description of Securities
 
Our authorized capital consists of 100,000,000 shares of common stock, par value $0.01 per share, and 1,000,000 shares of preferred stock, par value $0.01 per share.  As of May 26, 2015, we had 12,500,070 shares of Common Stock outstanding and no shares of preferred stock outstanding.
 
Common Stock
 
Holders of our common stock are entitled to one vote per share.  Our certificate of incorporation does not provide for cumulative voting.  Holders of our common stock are entitled to receive ratably such dividends, if any, as may be declared by our Board out of legally available funds.  However, the current policy of our Board is to retain earnings, if any, for the operation and expansion of the company.  Upon liquidation, dissolution or winding-up, the holders of our common stock are entitled to share ratably in all of our assets which are legally available for distribution.  The holders of our common stock have no preemptive, subscription, redemption or conversion rights.
 
Holders of the our common stock: (i) have equal ratable rights to dividends from funds legally available therefor, when, as and if declared by the Board; (ii) are entitled to share ratably in all of our assets available for distribution to stockholders upon liquidation, dissolution or winding-up of our affairs; (iii) do not have preemptive, subscription or conversion rights, nor are there any redemption or sinking fund provisions applicable thereto; and (iv) are entitled to one vote per share on all matters on which stockholders may vote at all stockholder meetings. The common stock does not have cumulative voting rights.
 
Convertible Note
 
The Convertible Note issued in the Private Placement is unsecured and will become due on May 26, 2017, the second anniversary of the issue date.  Prior to maturity, the Convertible Note will bear interest at 5% per annum, with interest being paid semiannually on the first day of each of the first and third calendar quarters.  From and after an event of default and for so long as the event of default is continuing, the Convertible Note will bear default interest at the rate of 10% per annum.  The Convertible Note can be prepaid by us at any time without penalty.
 
The Convertible Note is convertible into shares of our common stock at a conversion price of $1.80 per share, or an aggregate of 2,777,778 shares of common stock, subject to adjustment under certain circumstances.  The Convertible Note ranks senior to all of our other obligations, except for trade payables in the ordinary course of business, purchase money asset financing and any inventory or receivables-based credit facility that we may obtain in the future, provided that the amount of the credit facility does not exceed 50% of eligible inventory and 80% of eligible receivables.  The Convertible Note also includes certain negative covenants including, without Lone Star Value’s approval, restrictions on debt and security interests, mergers and the purchase and sale of assets, dividends and other restricted payments, and investments.
 
 
Warrant
 
The Warrant issued in the Private Placement 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.  The Warrant exercise price is subject to customary adjustment provisions for stock splits, stock dividends, recapitalizations and the like.
 
Discussion of the Convertible Note and Warrant issued in the Private Placement in this current report is qualified entirely by reference to the forms of Convertible Note and Warrant attached as Exhibits 4.1 and 4.2 hereto, respectively.
 
Registration Rights
 
We are obligated to file a registration statement with the SEC covering the resale of the shares of common stock into which the Convertible Note and for which the Warrant is exercisable within 60 days, if and upon the written request of Lone Star Value at any time on or before May 26, 2017.  We are obligated to maintain the effectiveness of the registration statement from its effective date until the later of (a) the date on which all registrable shares covered by the registration statement have been sold, or may be sold without volume or manner of sale restrictions under Rule 144 or (b) the second anniversary of the closing date.  We agreed to use our best efforts to have the registration statement declared effective by the SEC as soon as possible, but in any event within five days after the SEC notifies us that it will not review the registration statement or 60 days after we receive the first written comments on the registration statement from the SEC.  There are no monetary penalties if the registration statement is not filed or does not become effective on a timely basis.
 
Trading Information
 
Effective May 26, 2015, our trading symbol on the OTCQB marketplace was temporarily changed to “SPZRD” from “SPZR.”  This temporary trading symbol will be replaced by FINRA within 20 business days after the closing of the Merger with a symbol reflecting the new name of our company.
 
Our Warrant is not, and will not be, registered or listed for trading.
 
Transfer Agent
 
The transfer agent and registrar for our common stock is Corporate Stock Transfer, located in Denver, Colorado.  We serve as the warrant agent for our Warrant.
 
Holders of Record
 
As of May 26, 2015, there were approximately 210 holders of record of our common stock.
 
 
Dividends
 
We have not paid any dividends on our common stock and we do not intend to pay any dividends on our common stock in the foreseeable future.
 
Indemnification of Directors and Officers
 
Under Delaware law, a Delaware corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe that the person’s conduct was unlawful.
 
In the case of a derivative action, a Delaware corporation may indemnify any such person against expenses, including attorneys’ fees, actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification will be made in respect on any claim, issue or matter as to which such person will have been adjudged to be liable to the corporation unless, and only to the extent, that the Court of Chancery of the State of Delaware or any other court in which such action or suit was brought determines that such person is fairly and reasonably entitled to indemnity for such expense.
 
Delaware law permits a corporation to include in its certificate of incorporation a provision eliminating or limiting a director’s personal liability to a corporation or its stockholders for monetary damages for breaches of fiduciary duty as a director.  Delaware law provides, however, that a corporation cannot eliminate or limit a director’s liability for (i) any breach of the director’s duty of loyalty to the corporation or its stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) the unlawful purchase or redemption of stock or payment of unlawful purchase or redemption of stock or payment of unlawful dividends; or (iv) for any transaction from which the director derived an improper personal benefit. Furthermore, such provision cannot eliminate or limit the liability of a director for any act or omission occurring prior to the date when such provision became effective.
 
Our certificate of incorporation provides that we will indemnify our directors to the fullest extent permitted by Delaware law and may indemnify our officers and any other person whom we have the power to indemnify against any liability, reasonable expense or other matter whatsoever.
 
Under Delaware law, a corporation may also purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability.
 
 
We have entered into separate, but substantively identical, indemnification agreements with each of our directors and named executive officers.  The indemnification agreements allow us to indemnify each of them to the fullest extent permitted by Delaware law.
 
Unregistered Sales of Equity Securities.
 
For the purpose of financing the ongoing business and operations of our company following the Merger, on May 26, 2015 we completed the Private Placement, issuing the Convertible Note in the principal amount of $5,000,000, together with the Warrant, pursuant to the terms of the Securities Purchase Agreement with Lone Star Value.  The Convertible Note is unsecured and will become due on May 26, 2017, the second anniversary of the issue date.  Prior to maturity, the Convertible Note will bear interest at 5% per annum, with interest being paid semiannually on the first day of each of the first and third calendar quarters.  From and after an event of default and for so long as the event of default is continuing, the Convertible Note will bear default interest at the rate of 10% per annum.  The Convertible Note can be prepaid by us at any time without penalty.
 
The Convertible Note is convertible into shares of our common stock at a conversion price of $1.80 per share, or an aggregate of 2,777,778 shares of common stock, subject to adjustment under certain circumstances.  The Convertible Note ranks senior to all of our other obligations, except for trade payables in the ordinary course of business, purchase money asset financing and any inventory or receivables-based credit facility that we may obtain in the future, provided that the amount of the credit facility does not exceed 50% of eligible inventory and 80% of eligible receivables.  The Convertible Note also includes certain negative covenants including, without Lone Star Value’s approval, restrictions on debt and security interests, mergers and the purchase and sale of assets, dividends and other restricted payments, and investments.
 
The Warrant issued in the Private Placement 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 net proceeds of the Private Placement of approximately $4,870,000 will be used for market expansion and strategic acquisitions, as well as working capital and general corporate purposes, including amounts required to pay officers’ salaries, ongoing public reporting costs, insurance, office-related expenses (including equipment and supplies), and other corporate expenses.  We have no agreements or commitments with regard to any acquisitions at this time.
 
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.
 
 
Following the closing of the Merger and the Private Placement, the Board approved the grant of stock options to purchase an aggregate of 100,000 shares of our common stock.  All securities were issued in reliance on Section 4(a)(2) of the Securities Act.
 
Ite m 4.01.
Changes in Registrant’s Certifying Accountant.
 
On May 26, 2015, upon the closing of the Merger, we dismissed Ramirez Jimenez International CPAs (“RJI”), as our independent registered public accounting firm, which was recommended and approved by our Board on May 26, 2015.  RJI audited our financial statements for the fiscal years ended December 31, 2014 and 2013.  The reason for the replacement of RJI was that, following the Merger, the former shareholders of Ameri & Partners own a majority of the outstanding shares of our common stock.  The technology management consulting business of Ameri & Partners is our new business, and the current independent registered public accountants of Ameri & Partners is the firm of RAM Associates, CPAs (“RAM”).  We believe that it is in our best interest to have RAM continue to work with our business, and we therefore retained RAM as our new independent registered public accounting firm on May 26, 2015.  RAM is located at 3240 East State Street Ext., Hamilton, New Jersey 08619.
 
The decision to change auditors and the appointment of RAM was recommended and approved by our Board.  During our two most recent fiscal years, and the subsequent interim periods, prior to May 26, 2015, we did not consult RAM regarding either: (i) the application of accounting principles to a specified transaction, completed or proposed, or the type of audit opinion that might be rendered on our company’s financial statements, or (ii) any matter that was either the subject of a disagreement as defined in Item 304(a)(1)(iv) of Regulation S-K or a reportable event as described in Item 304(a)(1)(v) of Regulation S-K.
 
RJI’s report on our financial statements for the fiscal years ended December 31, 2014 and 2013 did not contain any adverse opinion or disclaimer of opinion and was not qualified as audit scope or accounting principles, however such year-end report did contain a modification paragraph that expressed substantial doubt about our ability to continue as a going concern.
 
During the fiscal years ended December 31, 2014 and 2013 and the subsequent interim periods prior to May 26, 2015, (i) there were no disagreements between us and RJI on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure which, if not resolved to the satisfaction of RJI, would have caused RJI to make reference to the subject matter of the disagreement in connection with its reports and (ii) there were no “reportable events,” as described in Item 304(a)(1)(iv) of Regulation S-K of the Securities Exchange Act of 1934, as amended, or the Exchange Act.  The decision to replace RJI was not the result of any disagreement between us and RJI on any matter of accounting principle or practice, financial statement disclosure or audit procedure.  Our Board deemed it in our best interest to change independent auditors following the closing of the Merger.
 
We furnished RJI with a copy of this current report prior to filing this report with the SEC.  We also requested that RJI furnish a letter addressed to the SEC stating whether it agrees with the statements made in this report.  A copy of RJI’s letter to the SEC is filed with this current report as Exhibit 16.1.
 
 
Change in Control of Registrant.
 
Please see Item 2.01 (Completion of Acquisition or Disposition of Assets) of this current report on Form 8-K, which is incorporated herein by reference.
 
Item 5.02
Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers.
 
Please see Item 1.01 (Entry into a Material Definitive Agreement) and Item 2.01 (Completion of Acquisition or Disposition of Assets) of this current report on Form 8-K, which are incorporated herein by reference.
 
Item 5.03
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
 
On May 22, 2015, we filed a Certificate of Amendment of our Certificate of Incorporation to (i) change our corporate name to AMERI Holdings, Inc., (ii) effectuate a 1-for-17.61 reverse stock split of our outstanding shares of common stock, and (iii) decrease the total number of shares of common stock authorized to be issued from 300,000,000 shares to 100,000,000 shares.  These amendments were approved by all members of our Board and by the holder of a majority of our outstanding common stock by written consent.  An Information Statement on Schedule 14C notifying our stockholders of action taken by written consent was mailed to stockholders (of record on May 5, 2015) on May 6, 2015.  The changes effected by the Certificate of Amendment were effective on May 26, 2015.
 
As a result of the reverse stock split, we had approximately 875,000 outstanding shares of common stock prior to the issuance of shares of common stock in the Merger.
 
Effective May 26, 2015, our trading symbol on the OTCQB marketplace was temporarily changed to “SPZRD” from “SPZR.”  This temporary trading symbol will be replaced by FINRA within 20 business days after the closing of the Merger with a symbol that reflects the new name of our company.
 
In connection with the Merger, we amended our by-laws to increase the size of our Board to seven members.
 
In connection with the Merger, Ameri & Partners is changing its fiscal year end to that of AMERI Holdings, Inc., being December 31.
 
Item 9.01
Financial Statements and Exhibits.
 
 
(a)
Financial Statements of Businesses Acquired
 
The financial statements of Ameri & Partners for the fiscal years ended March 31, 2015 and 2014 are incorporated herein by reference to Exhibit 99.1 to this report.
 
 
(b)
Pro Forma Financial Information
 
Our unaudited pro forma condensed combined financial statements as of and for the fiscal year ended March 31, 2015 is incorporated herein by reference to Exhibit 99.2 to this report, and are based on the historical financial statements of Ameri & Partners and AMERI Holdings, Inc. after giving effect to the Merger.  The unaudited pro forma combined condensed balance sheet as of March 31, 2015 is presented to give effect to the merger as if it occurred on January 1, 2015 and, due to different fiscal period-ends, combines the historical balance sheet of Ameri & Partners at March 31, 2015 and the historical balance sheet of Spatializer Audio Laboratories at December 31, 2014.  The unaudited pro forma combined condensed statement of operations of Ameri & Partners and Spatializer Audio Laboratories for the year ended March 31, 2015 are presented as if the combination had taken place on January 1, 2015.
 
 
In accordance with Statement of Financial Accounting Standards No. 141, “Business Combinations” (SFAS 141), and the assumptions and adjustments described in the accompanying notes to the unaudited pro forma combined condensed financial statements, Ameri & Partners is considered the accounting acquiror.  Because Ameri & Partners’ stockholders as a group retained or received the larger portion of the voting rights in the combined entity, and Ameri & Partners’ senior management represents a majority of the senior management of the combined entity, Ameri & Partners was considered the acquiror for accounting purposes and will account for the Merger as a reverse acquisition.  The acquisition will be accounted for as the recapitalization of Ameri & Partners.  Our fiscal year will end on December 31.
 
Reclassifications have been made to the company’s historical financial statements to conform to Ameri & Partners’ historical financial statement presentation.
 
The unaudited pro forma combined condensed financial statements should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth under Item 2.01 of this current report, which disclosure is incorporated herein by reference, and the historical consolidated financial statements and accompanying notes of Ameri & Partners and AMERI Holdings, Inc.  The unaudited pro forma combined condensed financial statements are not intended to represent or be indicative of our consolidated results of operations or financial condition that would have been reported had the Merger been completed as of the dates presented, and should not be taken as representative of the future consolidated results of operations or financial condition of AMERI Holdings, Inc.
 
 
(d)
Exhibits
 
The exhibits listed in the following Exhibit Index are filed as part of this report.
 
2.1
Agreement of Merger and Plan of Reorganization, dated as of May 26, 2015, among Spatializer Audio Laboratories, Inc., Ameri100 Acquisition, Inc. and Ameri & Partners Inc. (filed as Exhibit 2.1 to AMERI Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on May 26, 2015 and incorporated herein by reference).
   
3.1
Certificate of Amendment of Certificate of Incorporation of Spatializer Audio Laboratories, Inc. (changing name to AMERI Holdings, Inc.) (filed as Exhibit 3.1 to AMERI Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on May 26, 2015 and incorporated herein by reference).
   
3.2
By-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).
   
4.1
Form of Common Stock Purchase Warrant issued by AMERI Holdings, Inc. to Lone Star Value Investors, LP, dated May 26, 2015.
 
 
 
   
4.2
Form of 5% Convertible Unsecured Promissory Note due May 26, 2017 from AMERI Holdings, Inc. to Lone Star Value Investors, LP, dated May 26, 2015.
   
10.1
Securities Purchase Agreement, dated as of May 26, 2015, by and between AMERI Holdings, Inc. and Lone Star Value Investors, LP.
   
10.2
Registration Rights Agreement, dated as of May 26, 2015, by and between AMERI Holdings, Inc. and Lone Star Value Investors, LP.
   
10.3
Stock Purchase Agreement by and between AMERI Holdings, Inc. and the shareholders of Ameri Consulting Service Private Limited.
   
10.4
Employment Agreement, dated as of May 26, 2015, between Giri Devanur and AMERI Holdings, Inc.
   
10.5
Employment Agreement, dated as of May 26, 2015, between Srinidhi “Dev” Devanur and AMERI Holdings, Inc.
   
10.6
Form of Indemnification Agreement.
   
10.7
Form of Option Grant Letter.
   
10.8
2015 Equity Incentive Award Plan.
   
16.1
Letter from Ramirez Jimenez International, CPAs.
   
21.1
Subsidiaries of AMERI Holdings, Inc.
   
99.1
Financial statements of Ameri & Partners, Inc. as of and for the fiscal years ended March 31, 2015 and 2014.
   
99.2
Unaudited pro forma condensed combined financial statements of Ameri & Partners, Inc. as of and for the fiscal year ended March 31, 2015 and unaudited pro forma condensed combined Statement of Operations as of and for the fiscal year ended March 31, 2015.
 
 
SIGNA TURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date:  May 29, 2015
AMERI HOLDINGS, INC.
   
   
 
By:
/s/ Giri Devanur
   
Giri Devanur
   
President and Chief Executive Officer

 
52

 
 
Exhibit 4.1
 
THESE SECURITIES HAVE NOT BEEN REGISTERED FOR OFFER OR SALE UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS.  THEY MAY NOT BE SOLD OR OFFERED FOR SALE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW OR AN APPLICABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
 
COMMON STOCK PURCHASE WARRANT
 
To Purchase Shares of Common Stock (“Common Stock”) of
 
AMERI HOLDINGS, INC. (formerly Spatializer Audio Laboratories, Inc.)
 
THIS CERTIFIES that, for value received, Lone Star Value Investors, LP (the “ Purchaser ” or “ Holder ”) is entitled, upon the terms and subject to the conditions hereinafter set forth, at any time on or after the date hereof and on or prior to 5:00 p.m. (Eastern Time) on May 26, 2020 (the “ Termination Date ”), but not thereafter, to subscribe for and purchase from AMERI Holdings, Inc. (formerly Spatializer Audio Laboratories, Inc.), a Delaware corporation (the “ Company ”), up to 2,777,777 shares of Common Stock (the “ Warrant Shares ”) at an exercise price equal to $1.80 per share (as adjusted from time to time pursuant to the terms hereof, the “ Exercise Price ”).  The Exercise Price and the number of shares for which the Warrant is exercisable shall be subject to adjustment as provided herein.
 
This Warrant is being issued in connection with a private placement (the “ Private Placement ”) by the Company of a 5% Convertible Unsecured Promissory Note due May 26, 2017 (the “ Note ”) being sold to the Purchaser.  This Warrant is specifically being issued in connection with the Securities Purchase Agreement, dated as of May 26, 2015 (the “ Purchase Agreement ”), entered into between the Company and the Purchaser.  Capitalized terms used herein and not otherwise defined shall have the meaning ascribed thereto in the Purchase Agreement.
 
1.              Title of Warrant .  Prior to the expiration hereof and subject to compliance with applicable laws, this Warrant and all rights hereunder are transferable, in whole or in part, at the office or agency of the Company by the Holder hereof in person or by duly authorized attorney, upon surrender of this Warrant together with (a) the Assignment Form annexed hereto properly endorsed, and (b) any other documentation reasonably necessary to satisfy the Company that such transfer is in compliance with all applicable securities laws.  The term “ Holder ” shall refer to the Purchaser or any subsequent transferee of this Warrant.
 
2.               Authorization of Shares .  The Company covenants that all shares of Common Stock which may be issued upon the exercise of rights represented by this Warrant will, upon exercise of the rights represented by this Warrant and payment of the Exercise Price as set forth herein (unless the Holder exercises this Warrant through a cashless exercise, as provided in Section 3(b) hereof), be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue or otherwise specified herein).
 
 
 

 
 
3.               Exercise of Warrant.
 
(a)            The Holder may exercise this Warrant, in whole or in part, at any time and from time to time, by delivering (which may be by facsimile) to the offices of the Company or any transfer agent for the Common Stock this Warrant, together with a Notice of Exercise in the form annexed hereto specifying the number of Warrant Shares with respect to which this Warrant is being exercised, together with payment to the Company of the Exercise Price therefor (unless the Holder exercises this Warrant through a cashless exercise, as provided in Section 3(b) hereof).
 
(b)            This Warrant may also be exercised by the Holder through a cashless exercise, as described in this Section 3(b).  This Warrant may be exercised, in whole or in part, by (i) the delivery to the Company of a duly executed Notice of Exercise specifying the number of Warrant Shares to be applied to such exercise, and (ii) the surrender to a common carrier for overnight delivery to the Company, or as soon as practicable following the date the Holder delivers the Notice of Exercise to the Company, of this Warrant (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction). The number of shares of Common Stock to be issued upon exercise of this Warrant pursuant to this Section 3(b) shall equal the value of this Warrant (or the portion thereof being canceled) computed as of the date of delivery of this Warrant to the Company using the following formula:
 
X = Y(A-B)/A
 
where:
 
X = the number of shares of Common Stock to be issued to the Holder under this Section 3(b);
Y = the number of Warrant Shares identified in the Notice of Exercise as being applied to the subject exercise;
A = the Fair Market Value price per share on such date; and
B = the Exercise Price on such delivery date
 
The Company acknowledges and agrees that this Warrant was issued for consideration received on the date hereof.  Consequently, the Company acknowledges and agrees that, if the Holder conducts a cashless exercise pursuant to this Section 3(b), the period during which the Holder held this Warrant may, for purposes of Rule 144 promulgated under the Securities Act of 1933, as amended (the “ Securities Act ”), be “tacked” to the period during which the Holder holds the Warrant Shares received upon such cashless exercise.
 
Notwithstanding the foregoing, the Holder may conduct a cashless exercise pursuant to this Section 3(b) only in the event that a registration statement covering the resale of the Warrant Shares is not then effective at the time that the Holder wishes to conduct such cashless exercise.
 
(c)            In the event that the Warrant is not exercised in full, the number of Warrant Shares shall be reduced by the number of such Warrant Shares for which this Warrant is exercised and/or surrendered, and the Company, if requested by Holder and at its expense, shall within three (3) Trading Days (as defined below) issue and deliver to the Holder a new Warrant of like tenor in the name of the Holder or as the Holder (upon payment by Holder of any applicable transfer taxes) may request, reflecting such adjusted Warrant Shares. Notwithstanding anything to the contrary set forth herein, upon exercise of any portion of this Warrant in accordance with the terms hereof, the Holder shall not be required to physically surrender this Warrant to the Company unless such Holder is purchasing the full amount of Warrant Shares represented by this Warrant.  The Holder and the Company shall maintain records showing the number of Warrant Shares so purchased hereunder and the dates of such purchases or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Warrant upon each such exercise.  The Holder and any assignee, by acceptance of this Warrant or a new Warrant, acknowledge and agree that, by reason of the provisions of this Section, following exercise of any portion of this Warrant, the number of Warrant Shares which may be purchased upon exercise of this Warrant may be less than the number of Warrant Shares set forth on the face hereof.
 
 
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Certificates for shares of Common Stock purchased hereunder shall be delivered to the Holder hereof within three (3) Trading Days after the date on which this Warrant shall have been exercised as aforesaid.  The Holder may withdraw its Notice of Exercise at any time if the Company fails to timely deliver the relevant certificates to the Holder as provided in this Agreement.  A Notice of Exercise shall be deemed sent on the date of delivery if delivered before 5:00 p.m. (Eastern Time) on such date, or the day following such date if delivered after 5:00 p.m. (Eastern Time); provided that the Company is only obligated to deliver Warrant Shares against delivery of the Exercise Price from the holder hereof (unless the Holder exercises this Warrant through a cashless exercise, as provided in Section 3(b) hereof) and surrender of this Warrant (or appropriate affidavit and/or indemnity in lieu thereof).
 
In lieu of delivering physical certificates representing the Warrant Shares issuable upon exercise of this Warrant, provided the Company’s transfer agent is participating in the Depository Trust Company (“ DTC ”) Fast Automated Securities Transfer (“ FAST ”) program, upon request of the Holder, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Warrant Shares issuable upon exercise to the Holder, by crediting the account of the Holder’s prime broker with DTC through its Deposit Withdrawal Agent Commission (“ DWAC ”) system. The time periods for delivery described above shall apply to the electronic transmittals through the DWAC system.  The Company agrees to coordinate with DTC to accomplish this objective.
 
(d)            The term “ Trading Day ” means a day on which there is trading on the principal market, exchange, or quotation service on which the Common Stock is then listed or quoted for trading (the “ Principal Market ”).
 
4.               No Fractional Shares or Scrip .  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant.  In lieu of issuance of a fractional share upon any exercise hereunder, the Company will either round up to nearest whole number of shares or pay the cash value of that fractional share, which cash value shall be calculated on the basis of the average closing price of the Common Stock during the five (5) Trading Days immediately preceding the date of exercise.
 
5.               Charges, Taxes and Expenses .  Issuance of certificates for shares of Common Stock upon the exercise of this Warrant shall be made without charge to the Holder hereof for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder of this Warrant or in such name or names as may be directed by the Holder of this Warrant; provided , however , that in the event certificates for shares of Common Stock are to be issued in a name other than the name of the Holder of this Warrant, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder hereof; and provided further, that the Company shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issuance of any Warrant certificates or any certificates for the Warrant Shares other than the issuance of a Warrant Certificate to the Holder in connection with the Holder’s surrender of a Warrant Certificate upon the exercise of all or less than all of the Warrants evidenced thereby.
 
 
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6.               Closing of Books .  The Company will at no time close its shareholder books or records in any manner which interferes with the timely exercise of this Warrant.
 
7.               No Rights as Shareholder until Exercise .  Subject to Section 12 of this Warrant and the provisions of any other written agreement between the Company and the Purchaser, the Purchaser shall not be entitled to vote or receive dividends or be deemed the holder of Warrant Shares or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the Purchaser, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value, or change of stock to no par value, consolidation, merger, conveyance or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised as provided herein. However, at the time of the exercise of this Warrant pursuant to Section 3 hereof, the Warrant Shares so purchased hereunder shall be deemed to be issued to such Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall have been exercised.
 
8.              Assignment and Transfer of Warrant .  This Warrant may be assigned by the surrender of this Warrant and the Assignment Form annexed hereto duly executed at the office of the Company (or such other office or agency of the Company or its transfer agent as the Company may designate by notice in writing to the registered Holder hereof at the address of such Holder appearing on the books of the Company); provided, however, that this Warrant may not be resold or otherwise transferred except (i) in a transaction registered under the Act, or (ii) in a transaction pursuant to an exemption, if available, from registration under the Act and whereby, if reasonably requested by the Company, an opinion of counsel reasonably satisfactory to the Company is obtained by the Holder of this Warrant to the effect that the transaction is so exempt.
 
9.               Loss, Theft, Destruction or Mutilation of Warrant; Exchange .  The Company represents, warrants and covenants that (a) upon receipt by the Company of evidence and/or indemnity reasonably satisfactory to it of the loss, theft, destruction or mutilation of any Warrant or stock certificate representing the Warrant Shares, and in case of loss, theft or destruction, of indemnity reasonably satisfactory to it, and (b) upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of this Warrant or stock certificate, without any charge therefor.  This Warrant is exchangeable at any time for an equal aggregate number of Warrants of different denominations, as requested by the holder surrendering the same, or in such denominations as may be requested by the Holder following determination of the Exercise Price.  No service charge will be made for such registration or transfer, exchange or reissuance.
 
 
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10.             Saturdays, Sundays, Holidays, etc .  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall be a Saturday, Sunday or a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not a legal holiday.
 
11.             Effect of Certain Events .  If at any time while this Warrant or any portion thereof is outstanding and unexpired there shall be a transaction (by merger or otherwise) in which more than 50% of the voting power of the Company is disposed of (collectively, a “ Sale or Merger Transaction ”), the Holder of this Warrant shall have the right thereafter to purchase, by exercise of this Warrant and payment of the aggregate Exercise Price in effect immediately prior to such action (unless the Holder exercises this Warrant through a cashless exercise, as provided in Section 3(b) hereof), the kind and amount of shares and other securities and property which it would have owned or have been entitled to receive after the happening of such transaction had this Warrant been exercised immediately prior thereto, subject to further adjustment as provided in Section 12.
 
12.             Adjustments of Exercise Price and Number of Warrant Shares .  The number of and kind of securities purchasable upon exercise of this Warrant and the Exercise Price (as well as the maximum exercise price) shall be subject to adjustment from time to time as set forth in this Section 12.
 
(a)             Subdivisions, Combinations, Stock Dividends and other Issuances .  If the Company shall, at any time while this Warrant is outstanding, (A) pay a stock dividend or otherwise make a distribution or distributions on any equity securities (including instruments or securities convertible into or exchangeable for such equity securities) in shares of Common Stock, (B) subdivide outstanding shares of Common Stock into a larger number of shares, or (C) combine outstanding Common Stock into a smaller number of shares, then the Exercise Price (and maximum exercise price) shall be adjusted such that the Exercise Price, as adjusted, will be equal to the Exercise Price then in effect multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding before such event and the denominator of which shall be the number of shares of Common Stock outstanding after such event. Any adjustment made pursuant to this Section 12(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or combination.  The number of shares which may be purchased hereunder shall be increased proportionately to any reduction in Exercise Price pursuant to this paragraph 12(a), so that after such adjustments the aggregate Exercise Price payable hereunder for the increased number of shares shall be the same as the aggregate Exercise Price in effect just prior to such adjustments.
 
 
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(b)            Other Distributions .  If at any time after the date hereof the Company distributes to holders of its Common Stock, other than as part of its dissolution, liquidation or the winding up of its affairs, any shares of its capital stock, any evidence of indebtedness or any of its assets (other than Common Stock), then the number of Warrant Shares for which this Warrant is exercisable shall be increased to equal: (i) the number of Warrant Shares for which this Warrant is exercisable immediately prior to such event, (ii) multiplied by a fraction, (A) the numerator of which shall be the Fair Market Value (as defined below) per share of Common Stock on the record date for the dividend or distribution, and (B) the denominator of which shall be the Fair Market Value price per share of Common Stock on the record date for the dividend or distribution minus the amount allocable to one share of Common Stock of the value (as jointly determined in good faith by the Board of Directors of the Company and the Holder) of any and all such evidences of indebtedness, shares of capital stock, other securities or property, so distributed. For purposes of this Warrant, “ Fair Market Value ” shall equal the average closing trading price of the Common Stock on the Principal Market for the 5 Trading Days preceding the date of determination or, if the Common Stock is not listed or admitted to trading on any Principal Market, and the average price cannot be determined as contemplated above, the Fair Market Value of the Common Stock shall be as reasonably determined in good faith by the Company’s Board of Directors and the Holder. In the event of any adjustment pursuant to this Section, the Exercise Price shall be reduced to equal: (i) the Exercise Price in effect immediately before the occurrence of any such event (ii) multiplied by a fraction, (A) the numerator of which is the number of Warrant Shares for which this Warrant is exercisable immediately before the adjustment, and (B) the denominator of which is the number of Warrant Shares for which this Warrant is exercisable immediately after the adjustment.
 
(c)             Merger, etc .  If at any time after the date hereof there shall be a merger or consolidation of the Company with or into or a transfer of all or substantially all of the assets of the Company to another entity, then the Holder shall be entitled to receive upon or after such transfer, merger or consolidation becoming effective, and upon payment of the Exercise Price then in effect, the number of shares or other securities or property of the Company or of the successor corporation resulting from such merger or consolidation, which would have been received by the Holder for the shares of stock subject to this Warrant had this Warrant been exercised just prior to such transfer, merger or consolidation becoming effective or to the applicable record date thereof, as the case may be. The Company will not merge or consolidate with or into any other corporation, or sell or otherwise transfer its property, assets and business substantially as an entirety to another corporation, unless the corporation resulting from such merger or consolidation (if not the Company), or such transferee corporation, as the case may be, shall expressly assume in writing the due and punctual performance and observance of each and every covenant and condition of this Warrant to be performed and observed by the Company.
 
(d)             Reclassification, etc .  If at any time after the date hereof there shall be a reorganization or reclassification of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, then the Holder shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Exercise Price then in effect, the number of shares or other securities or property resulting from such reorganization or reclassification, which would have been received by the Holder for the shares of stock subject to this Warrant had this Warrant at such time been exercised.
 
 
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(e)            In the event of any adjustment in the number of Warrant Shares issuable hereunder upon exercise, the Exercise Price shall be inversely proportionately increased or decreased as the case may be, such that aggregate purchase price for Warrant Shares upon full exercise of this Warrant shall remain the same.  Similarly, in the event of any adjustment in the Exercise Price, the number of Warrant Shares issuable hereunder upon exercise shall be inversely proportionately increased or decreased as the case may be, such that aggregate purchase price for Warrant Shares upon full exercise of this Warrant shall remain the same.
 
13.             Voluntary Adjustment by the Company .  The Company may at its option, at any time during the term of this Warrant, reduce but not increase the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.
 
14.             Notice of Adjustment .  Whenever the number of Warrant Shares or number or kind of securities or other property purchasable upon the exercise of this Warrant or the Exercise Price (or maximum exercise price) is adjusted, the Company shall promptly mail to the Holder of this Warrant a notice setting forth the number of Warrant Shares (and other securities or property) purchasable upon the exercise of this Warrant and the Exercise Price of such Warrant Shares after such adjustment and setting forth the computation of such adjustment and a brief statement of the facts requiring such adjustment.
 
15.             Authorized Shares .  The Company covenants that during the period the Warrant is outstanding and exercisable, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any and all purchase rights under this Warrant.  The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law, regulation, or rule of any applicable market or exchange.
 
16.             Compliance with Securities Laws.
 
(a)           The Holder hereof acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered (or if no exemption from registration exists), will have restrictions upon resale imposed by state and federal securities laws.  Each certificate representing the Warrant Shares issued to the Holder upon exercise (if not registered, for resale or otherwise, or if no exemption from registration exists) will bear substantially the following legend:
 
THESE SECURITIES HAVE NOT BEEN REGISTERED FOR OFFER OR SALE UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS.  THEY MAY NOT BE SOLD OR OFFERED FOR SALE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW OR AN APPLICABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
 
 
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(b)           Without limiting the Purchaser’s right to transfer, assign or otherwise convey the Warrant or Warrant Shares in compliance with all applicable securities laws, the Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are being acquired solely for the Purchaser’s own account and not as a nominee for any other party, and that the Purchaser will not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of applicable federal and state securities laws.
 
17.             Miscellaneous.
 
(a)             Issue Date; Choice of Law; Venue; Jurisdiction .  The provisions of this Warrant shall be construed and shall be given effect in all respects as if it had been issued and delivered by the Company on the date hereof.  This Warrant shall be binding upon any successors or assigns of the Company.  This Warrant will be construed and enforced in accordance with and governed by the laws of the State of New York, except for matters arising under the Act, without reference to principles of conflicts of law.  Each of the parties consents to the exclusive jurisdiction of the Federal and State Courts sitting in the County of New York in the State of New York in connection with any dispute arising under this Warrant and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non conveniens or venue, to the bringing of any such proceeding in such jurisdiction.  EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY JURY.
 
(b)             Modification and Waiver .  This Warrant and any provisions hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought.  Any amendment effected in accordance with this paragraph shall be binding upon the Purchaser, each fixture holder of this Warrant and the Company.  No waivers of, or exceptions to, any term, condition or provision of this Warrant, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.
 
(c)             Notices .  Any notice or other communication required or permitted to be given hereunder shall be in writing by facsimile, mail or personal delivery and shall be effective upon actual receipt of such notice.  The addresses for such communications shall be to the addresses as shown on the books of the Company or to the Company at the address set forth in the Purchase Agreement.  A party may from time to time change the address to which notices to it are to be delivered or mailed hereunder by notice in accordance with the provisions of this Section 17(c).
 
(d)             Severability .  Whenever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of any other provision of this Warrant in such jurisdiction or affect the validity, legality or enforceability of any provision in any other jurisdiction, but this Warrant shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.
 
 
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(e)             Specific Enforcement .  The Company and the Holder acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Warrant were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Warrant and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which either of them may be entitled by law or equity.
 
(f)             Registration .  The Warrant Shares underlying this Warrant will be subject to a Registration Rights Agreement to be entered into between the Company and the Holder, in such form as shall be reasonably satisfactory to the Company and the Holder.
 
IN WITNESS WHEREOF , the Company has caused this Warrant to be executed by its officers thereunto duly authorized.
 
Dated: May 26, 2015
AMERI HOLDINGS, INC.
(formerly Spatializer Audio Laboratories, Inc.)
   
   
 
By:
 
   
Name:
Giri Devanur
   
Title:
President and Chief Executive Officer
 
 
 
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NOTICE OF EXERCISE
 
To:           AMERI Holdings, Inc. (formerly Spatializer Audio Laboratories, Inc.)
 
(1)           The undersigned hereby elects to exercise the attached Warrant for and to purchase thereunder, __________ shares of Common Stock, and herewith makes payment therefor of $__________, or elects to use the cashless exercise option of the Warrant.
 
(2)           Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below:
 
 
(Name)
 
 
(Address)
 
 

(3)           Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned or in such other name as is specified below:
 
     
   
(Name)
     
     
(Date)
 
(Signature)
     
     
   
(Address)
     
     
Dated:
   
     
Signature
   
 
 
 
 

 
 
ASSIGNMENT FORM
 
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
 
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 
 
whose address is
 
 
 
 
 
Dated:
 

Holder’s Signature:     
 
   
Holder’s Address:     
 
   
   




Signature Guaranteed:
 

 




NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company.  Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.
 
Exhibit 4.2
 
THESE SECURITIES HAVE NOT BEEN REGISTERED FOR OFFER OR SALE UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS.  THEY MAY NOT BE SOLD OR OFFERED FOR SALE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW OR AN APPLICABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
 
5% CONVERTIBLE UNSECURED PROMISSORY NOTE DUE MAY 26, 2017
 
OF
 
AMERI HOLDINGS, INC.
(formerly Spatializer Audio Laboratories, Inc.)
 
Original Issuance Date: May 26, 2015
Original Principal Amount: $5,000,000
 
Edison, New Jersey

THIS NOTE (this “ Note ”) is duly authorized and issued by AMERI Holdings, Inc. (formerly Spatializer Audio Laboratories, Inc.), a Delaware corporation (the “ Company ”), and designated as the Company’s 5% Convertible Unsecured Promissory Note in the original principal amount of Five Million U.S. Dollars ($5,000,000).  All principal and unpaid interest under this Note shall become due and payable on May 26, 2017 (the “ Maturity Date ”).
 
FOR VALUE RECEIVED, the Company hereby promises to pay to the order of Lone Star Value Investors, LP , or its registered assigns or successors-in-interest (the “ Holder ”), the principal sum of Five Million U.S. Dollars ($5,000,000) together with all accrued but unpaid interest thereon, if any, on the Maturity Date, in accordance with the terms hereof.  Interest on the unpaid principal balance hereof shall accrue at the rate of 5% per annum from the original date of issuance, May 26, 2015 (the “ Issuance Date ”), until the same becomes due and payable on the Maturity Date, or such earlier date upon acceleration or by redemption in accordance with the terms hereof or of the other Transaction Documents.  Interest on this Note shall accrue daily commencing on the Issuance Date and shall be computed on the basis of a 360-day year, 30-day months and actual days elapsed and shall be payable in accordance with Section 1 hereof.  Notwithstanding anything to the contrary contained herein, this Note shall bear interest on the due and unpaid Principal Amount from and after the occurrence and during the continuance of an Event of Default pursuant to Section 3(a), at the rate (the “ Default Rate ”) equal to the lower of ten percent (10%) per annum or the highest rate permitted by law.  Unless otherwise agreed or required by applicable law, payments will be applied first to any unpaid collection costs, then to unpaid interest and fees and any remaining amount to principal.
 
Except as otherwise provided herein, all payments of principal and interest on this Note shall be made in lawful money of the United States of America by wire transfer of immediately available funds to such account as the Holder may from time to time designate by written notice in accordance with the provisions of this Note.  This Note may be prepaid in whole or in part at any time without penalty.  Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a Business Day (as defined below), the same shall instead be due on the next succeeding day which is a Business Day.
 
 
 

 
 
Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Securities Purchase Agreement, dated as of the Issuance Date, pursuant to which the Note was originally issued (the “ Purchase Agreement ”).  For purposes hereof, the following terms shall have the meanings ascribed to them below:
 
Business Day ” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the City of New York, State of New York are authorized or required by law or executive order to remain closed.
 
Conversion Price ” shall be $1.80 per share, as adjusted as set forth herein.
 
Convertible Securities ” means any convertible securities, warrants, options or other rights to subscribe for or to purchase or exchange for, shares of Common Stock.
 
Conversion Shares ” means the shares of Common Stock into which this Note is convertible in accordance with the terms hereof.
 
 “ Debt ” shall mean indebtedness of any kind.
 
Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended.
 
Principal Amount ” shall refer to the sum of (i) the original principal amount of this Note, (ii) all accrued but unpaid interest hereunder, and (iii) any default payments owing under the Transaction Documents but not previously paid or added to the Principal Amount.
 
Principal Market ” shall mean the principal market, exchange, or quotation service on which the Common Stock is then listed or quoted for trading.
 
Registration Statement ” shall have the meaning set forth in the Registration Rights Agreement.
 
Trading Day ” shall mean a day on which there is trading on the Principal Market.
 
The following terms and conditions shall apply to this Note:
 
Section 1.               Payments of Principal and Interest.
 
(a)            Interest Payments .  The Company shall pay all accrued but unpaid interest on the Principal Amount of this Note (the “ Semiannual Amount ”), on the first Business Day of each of the first and third calendar quarters of each calendar year (each an “ Interest Payment Date ”) beginning on July 1, 2015.  The Semiannual Amount shall be paid in cash.
 
(b)            Payment of Principal .  Subject to the provisions hereof, including, without limitation, the right to obtain prepayment of the Principal Amount provided herein, the Principal Amount of this Note shall be due and payable on the Maturity Date.  Payment of the Principal Amount shall be effected in cash.
 
 
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(c)            Taxes .  The Company may withhold and pay over to the relevant authorities any appropriate tax or other legally required withholdings from any interest payment to be made to the Holder to the extent that such withholding is required by the Internal Revenue Code or any other applicable law, rule, or regulation.
 
Section 2.                Seniority .  The obligations of the Company hereunder shall rank senior to all other Debt of the Company, whether now or hereinafter existing, except as and to the extent set forth in Section 3.1 of the Purchase Agreement.
 
Section 3.               Defaults and Remedies .
 
(a)            Events of Default .  An “ Event of Default ” is: (i) a default in payment of the Principal Amount, when due, or failure to pay any accrued but unpaid interest thereon of the Note within five (5) Business Days after the date such interest payment is due; (ii) a default in the timely issuance of the Conversion Shares upon and in accordance with the terms hereof (where for purposes of this Note, the term timely shall mean within ten (10) days following the conversion date) (iii) failure by the Company for thirty (30) days after written notice has been received by the Company to comply with any other material provision of the Note, the Purchase Agreement or the Transaction Documents, (iv) a material breach by the Company of its representations or warranties in the Purchase Agreement or Transaction Documents that remains uncured for thirty (30) business days after notice to the Company; (v) any event or condition shall occur which (x) results in the acceleration of the maturity of any material long-term debt (other than the Note) of the Company or any of its subsidiaries, or (y) enables (or, with the giving of notice or lapse of time or both, would enable) the holder of such material long-term debt or any or person acting on behalf of such holder’s behalf to accelerate the maturity thereof, or (vi) if the Company or any of its subsidiaries is subject to any Bankruptcy Event. “ Bankruptcy Event ” means any of the following events: (a) the Company or any subsidiary commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any subsidiary thereof; (b) there is commenced against the Company or any subsidiary any such case or proceeding that is not dismissed within 30 days after commencement; (c) the Company or any subsidiary is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered; (d) the Company or any subsidiary suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 30 days; (e) the Company or any subsidiary makes a general assignment for the benefit of creditors; (f) the Company or any subsidiary, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.
 
(b)            Remedies .  If an Event of Default occurs and is continuing with respect to the Note, the Holder may declare all of the then outstanding Principal Amount of this Note, including any interest due thereon, to be due and payable immediately.  The Company shall pay interest on such amount in cash at the Default Rate to the Holder if such amount is not paid within two (2) days of Holder’s request.  The remedies under this Note shall be cumulative.
 
 
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Section 4.                Certain Negative Covenants .   The Company hereby covenants and agrees that, for so long as the Note remains outstanding, unless the Holder shall otherwise consent in writing, the Company shall not, and shall not permit any subsidiary to, directly or indirectly after the date hereof:
 
(a)           engage in any type of business, except businesses of the same general type as that in which the Ameri Entities were engaged on the date hereof and in activities incidental and related thereto;
 
(b)           create, assume, or otherwise become or remain obligated in respect of, or permit or suffer to exist or to be created, assumed or incurred or to be outstanding, any indebtedness or security interests other than as permitted in Section 3.1 of the Purchase Agreement;
 
(c)           guaranty or become surety for the obligations of any other person, other than any guaranty or surety with respect to the obligations of a subsidiary of the Company or any guaranty or surety made in the ordinary course of the Company’ s business, provided that such guaranty or surety does not exceed $50,000 in the aggregate;
 
(d)           issue or sell any Common Stock or any Convertible Securities (other than (i) pursuant to this Note or the Warrant granted pursuant to the Purchase Agreement, (ii) shares of Common Stock or stock options to purchase such shares issued to employees, consultants, officers or directors in accordance with incentive compensation plans approved by the Board of Directors, and (iii) shares of Common Stock issued pursuant to a stock dividend, stock split or other similar transaction);
 
(e)           acquire (whether for cash, property, services, assumption of debt, securities or otherwise) any shares of capital stock, bonds, notes, debentures, time deposits or other securities of any other person, in excess of the aggregate amount of $100,000 over any rolling 12-month period;
 
(f)           purchase or otherwise acquire (whether for cash, property, services, assumption of debt, securities or otherwise) any Assets in excess of the aggregate amount of $100,000 over any rolling 12-month period (for purposes of this paragraph, the term “Assets” shall mean any capital assets or fixed assets, provided that such term shall not include inventory or other assets purchased in ordinary course of the Company’s business);
 
(g)           (i) declare, pay or make any dividend or distribution on any Common Stock or other shares of capital stock of the Company, other than dividends or distributions payable in its stock, or Convertible Securities, or split-ups or reclassifications of its stock into additional or other shares of its stock, or (ii) apply (or permit any subsidiary to apply) any of its finds, property or assets to the purchase, redemption or other retirement of any Common Stock or other shares of capital stock of the Company;
 
(h)           enter into any transaction, arrangement or contract with any of its Affiliates (as such term is defined in Rule 405 under the Securities Act of 1933, as amended), which is on terms that are less favorable than are obtainable in an arm’s length transaction from any person or entity which is not one of its Affiliates (excluding the Ameri India Master Services Agreement and Ameri India Acquisition Agreement, each as described in the Purchase Agreement);
 
 
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(i)           engage in or consummate any sale, purchase, merger or other transaction or series of transactions that would result in any person (including any syndicate or group deemed to be a “person” under Section 13(d)(3) or 14(d)(2) of the Exchange Act, or any successor provision) having (i) beneficial ownership, directly or indirectly, of more than 40% of the equity of the Company or (ii) the right to appoint or cause to be appointed a majority of new officers of the Company; or
 
(j)           engage in or consummate any consolidation of the Company with, or merger of the Company into, any other person, any merger of another person into the Company, or any sale, lease or exchange of all or substantially all of the property and assets of the Company to another person.
 
Section 5.               Conversion .
 
(a)            Conversion by Holder .  From and after the Issuance Date and subject to the terms hereof and restrictions and limitations contained herein, the Holder shall have the right, at Holder’s option, at any time and from time to time to convert, in part or in whole, the outstanding Principal Amount and all accrued and unpaid interest under this Note into shares of the Company’s common stock, par value $0.01 per share (“ Common Stock ”), at the then applicable Conversion Price, by delivering to the Company a fully executed notice of conversion in the form of conversion notice attached hereto as Exhibit A (the “ Conversion Notice ”), which may be transmitted by facsimile (with the original mailed on the same date by certified or registered mail, postage prepaid and return receipt requested). The Conversion Notice shall specify a date for the conversion to be effective, which date shall be no earlier than the date on which the Conversion Notice is delivered (the “ Conversion Date ”), and the Conversion Notice shall be irrevocable when delivered.
 
(b)            Conversion Procedures .  Upon conversion of this Note pursuant to this Section 5, the outstanding Principal Amount hereunder shall be converted into such number of fully paid, validly issued and non-assessable shares of Common Stock, free of any liens, claims and encumbrances, as is determined by dividing the outstanding Principal Amount being converted by the then applicable Conversion Price and any accrued but unpaid interest shall be paid in cash.  The Company will deliver to the Holder not later than three (3) Trading Days after the Conversion Date, a certificate or certificates which shall be free of restrictive legends and trading restrictions (assuming that the Registration Statement has been declared effective), representing the number of shares of Common Stock being acquired upon the conversion of this Note.
 
(c)            Conversion Price Adjustments .
 
(i)            Stock Dividends, Splits and Combinations .  If the Company or any of its subsidiaries, at any time while the Note is outstanding (A) shall pay a stock dividend or otherwise make a distribution or distributions on any equity securities (including instruments or securities convertible into or exchangeable for such equity securities but excluding any stockholder rights granted pursuant to a poison pill) in shares of Common Stock, (B) subdivide outstanding Common Stock into a larger number of shares, (C) combine outstanding Common Stock into a smaller number of shares, or (D) issues new securities by reclassification of the shares of Common Stock of the Company, then, and in each such case, the Conversion Price in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the Holder shall be entitled to receive the number of shares of Common Stock or other securities of the Company which such Holder would have owned or have been entitled to receive after the occurrence of any of the events described above, had such Note been surrendered for conversion immediately prior to the occurrence of such event or record date therefore, whichever is earlier. Any adjustment made pursuant to this Section 5(c) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective.
 
 
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(ii)            Distributions .  If the Company or any of its subsidiaries, at any time while the Note is outstanding, shall distribute to all holders of Common Stock evidences of its indebtedness or assets or cash or rights or warrants to subscribe for or purchase any security of the Company or any of its subsidiaries (excluding those referred to in Section 5(c)(i) above), then concurrently with such distributions to holders of Common Stock, the Company shall distribute to the Holder of this Note the amount of such indebtedness, assets, cash or rights or warrants which the Holder of this Note would have received had this Note been converted into Common Stock at the then applicable the Conversion Price immediately prior to the record date for such distribution.
 
(iii)            Rounding of Adjustments .  All calculations under this Section 5(c) shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
 
(iv)            Notice of Adjustments .  Whenever the Conversion Price is adjusted pursuant to this Section 5(c), the Company shall promptly deliver to the Holder of this Note, a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment, provided that any failure to so provide such notice shall not affect the automatic adjustment hereunder.
 
(v)            Fundamental Changes .  In case any transaction or event (including, without limitation, any merger, consolidation, combination, recapitalization, sale of assets, tender or exchange offer, reclassification, compulsory share exchange or liquidation) shall occur in which all or substantially all outstanding shares of Common Stock are converted into or exchanged or acquired for or constitute the right to receive stock, or other securities, cash, property or assets (each, “ Fundamental Change ”), the Holder of this Note outstanding immediately prior to the occurrence of such Fundamental Change shall have the right upon any subsequent conversion to receive the kind and amount of stock, other securities, cash, property or assets that such holder would have received if such share had been converted immediately prior to such Fundamental Change.
 
(d)            Reservation and Issuance of Conversion Shares .  The Company covenants that it will at all times reserve and keep available out of its authorized and unissued Common Stock solely for the purpose of issuance upon conversion of this Note, free from preemptive rights or any other actual contingent purchase rights of persons other than the Holder of this Note, not less than such number of shares of Common Stock as shall be issuable (taking into account the adjustments under this Section 5) upon the conversion of this Note hereunder in Common Stock. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid, nonassessable and freely tradeable.
 
 
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(e)            No Fractions .  Upon a conversion hereunder the Company shall not be required to issue stock certificates representing fractions of shares of Common Stock, but may if otherwise permitted, make a cash payment in respect of any final fraction of a share based on the closing price of a share of Common Stock at such time.  If the Company elects not, or is unable, to make such cash payment, the Holder shall be entitled to receive, in lieu of the final fraction of a share, one whole share of Common Stock.
 
(f)            Charges, Taxes and Expenses .  Issuance of certificates for shares of Common Stock upon the conversion of this Note (including repayment in stock) shall be made without charge to the holder hereof for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided , however , that in the event certificates for shares of Common Stock are to be issued in a name other than the name of the Holder, this Note when surrendered for conversion shall be accompanied by an assignment form; and provided further , that the Company shall not be required to pay any tax or taxes which may be payable in respect of any such transfer.
 
(g)            Cancellation .  After all of the Principal Amount (including accrued but unpaid interest and default payments at any time owed on this Note) has been paid in full or converted into Common Stock, this Note shall automatically be deemed canceled and the Holder shall promptly surrender the Note to the Company at the Company’s principal executive offices.
 
Section 6.               General.
 
(a)            Payment of Expenses .  The Company agrees to pay all reasonable charges and expenses, including attorneys’ fees and expenses, which may be incurred by the Holder in successfully enforcing this Note and/or collecting any amount due under this Note.
 
(b)            Savings Clause .  In case any provision of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby.  In no event shall the amount of interest paid hereunder exceed the maximum rate of interest on the unpaid principal balance hereof allowable by applicable law.  If any sum is collected in excess of the applicable maximum rate, the excess collected shall be applied to reduce the principal debt.  If the interest actually collected hereunder is still in excess of the applicable maximum rate, the interest rate shall be reduced so as not to exceed the maximum allowable under law.
 
(c)            Amendment .  Neither this Note nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the Company and the Holder.
 
 
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(d)            Assignment, etc .  The Holder may assign or transfer this Note to any transferee.  The Holder shall notify the Company of any such assignment or transfer promptly.  This Note shall be binding upon the Company and its successors and shall inure to the benefit of the Holder and its successors and permitted assigns.
 
(e)            No Waiver .  No failure on the part of the Holder to exercise, and no delay in exercising any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by the Holder of any right, remedy or power hereunder preclude any other or future exercise of any other right, remedy or power.  Each and every right, remedy or power hereby granted to the Holder or allowed it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by the Holder from time to time.
 
(f)            Governing Law; Jurisdiction.
 
(i)            Governing Law .  THIS NOTE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICTS OF LAWS PROVISIONS THEREOF THAT WOULD OTHERWISE REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.
 
(ii)            Jurisdiction .  The Company irrevocably submits to the jurisdiction of any State or Federal Court sitting in the State of New York, County of New York, over any suit, action, or proceeding arising out of or relating to this Note.  The Company irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action, or proceeding brought in such a court and any claim that suit, action, or proceeding has been brought in an inconvenient forum.
 
The Company agrees that the service of process upon it mailed by certified or registered mail, postage prepaid and return receipt requested (and service so made shall be deemed complete three days after the same has been posted as aforesaid) or by personal service shall be deemed in every respect effective service of process upon it in any such suit or proceeding.  Nothing herein shall affect Holder’s right to serve process in any other manner permitted by law.  The Company agrees that a final non-appealable judgment in any such suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on such judgment or in any other lawful manner.
 
(iii)            NO JURY TRIAL .  THE COMPANY HEREBY KNOWINGLY AND VOLUNTARILY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS NOTE.
 
(g)            Replacement Notes .  This Note may be exchanged by Holder at any time and from time to time for a Note or Notes with different denominations representing an equal aggregate outstanding Principal Amount, as reasonably requested by Holder, upon surrendering the same.  No service charge will be made for such registration or exchange.  In the event that Holder notifies the Company that this Note has been lost, stolen or destroyed, a replacement Note identical in all respects to the original Note (except for registration number and Principal Amount, if different than that shown on the original Note), shall be issued to the Holder, provided that the Holder executes and delivers to the Company an agreement reasonably satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with the Note.
 
 
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(h)            Notices Procedures .  Any and all notices or other communications or deliveries to be provided by the Holder hereunder, shall be in writing and delivered personally, by confirmed facsimile, or by a nationally recognized overnight courier service to the Company at the facsimile telephone number or address of the principal place of business of the Company as set forth in the Purchase Agreement.  Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, or by a nationally recognized overnight courier service addressed to the Holder at the facsimile telephone number or address of the Holder appearing on the books of the Company, or if no such facsimile telephone number or address appears, at the principal place of business of the Holder.  Any notice or other communication or deliveries hereunder shall be deemed delivered (i) upon receipt, when delivered personally, (ii) when sent by facsimile, upon receipt if received on a Business Day prior to 5:00 p.m. (Eastern Time), or on the first Business Day following such receipt if received on a Business Day after 5:00 p.m. (Eastern Time) or (iii) upon receipt, when deposited with a nationally recognized overnight courier service.
 
 
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IN WITNESS WHEREOF , the Company has caused this Note to be duly executed on the date first set forth above.
 
AMERI HOLDINGS, INC.
(formerly Spatializer Audio Laboratories, Inc.)
 
By:
 
 
Name:
Giri Devanur
 
Title:
President and Chief Executive Officer

 

 
FOR VALUE RECEIVED , the undersigned, being the President and Chief Executive Officer of Ameri and Partners Inc. (the “Guarantor”), a wholly-owned subsidiary of the Company named in and party to the foregoing 5% Convertible Unsecured Promissory Note due May 26, 2017, hereby unconditionally guarantees on behalf of the Guarantor the due and punctual payment by the Company of the principal of and interest on said 5% Convertible Unsecured Promissory Note due May 26, 2017, and agrees that such guarantee shall not in any manner be affected or impaired by (a) any amendment or modification of the 5% Convertible Unsecured Promissory Note due May 26, 2017 or the Securities Purchase Agreement executed and delivered in connection therewith, (b) any waiver or indulgence granted or permitted under either such documents, (c) any bankruptcy, insolvency, reorganization or other such proceeding at any time against the Company, or (d) any other fact, event, circumstance or condition which might constitute a legal or equitable defense to the obligations of a guarantor.

IN WITNESS WHEREOF , the undersigned Guarantor has caused this instrument to be duly executed on the date first set forth above.

AMERI AND PARTNERS INC.
 
By:
 
 
Name:
Giri Devanur
 
Title:
President and Chief Executive Officer


 
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EXHIBIT A
 
FORM OF CONVERSION NOTICE
 
(To be executed by the Holder
 in order to convert a Note)
 
The undersigned hereby elects to convert the outstanding Principal Amount (as defined in the Note) indicated below of this Note into shares of Common Stock, par value $0.01 per share (the “Common Stock”), of AMERI HOLDINGS, INC. (formerly Spatializer Audio Laboratories, Inc.) (the “Company”) according to the conditions hereof, as of the date written below.  If shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith.  No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.
 
Conversion information:
 
 
Date to Effect Conversion
   
   
 
Aggregate Principal Amount of Note Being Converted
   
   
 
Number of shares of Common Stock to be Issued
   
   
 
Applicable Conversion Price
   
   
 
Signature
   
   
 
Name
   
   
 
Address

 
 
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Exhibit 10.1
 
THESE SECURITIES HAVE NOT BEEN REGISTERED FOR OFFER OR SALE UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS.  THEY MAY NOT BE SOLD OR OFFERED FOR SALE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW OR AN APPLICABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
 
SECURITIES PURCHASE AGREEMENT
 
SECURITIES PURCHASE AGREEMENT (“ Agreement ”) dated as of May 26, 2015, between AMERI Holdings, Inc. (formerly Spatializer Audio Laboratories, Inc.), a Delaware corporation (the “ Company ”), and Lone Star Value Investors, LP (the “ Purchaser ”).  Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Note (as defined below).
 
W I T N E S S E T H :
 
WHEREAS , the Company has entered into an Agreement of Merger and Plan of Reorganization, dated as of May 26, 2015 (the “ Merger Agreement ”), among the Company, Ameri100 Acquisition, Inc., the Company’s wholly-owned subsidiary and a Delaware corporation formed for the purpose of participating in the Merger (“ Acquisition Sub ”), and Ameri and Partners Inc., a Delaware corporation (“ Ameri & Partners ”), pursuant to which the Company will acquire Ameri & Partners through a reverse triangular merger in which Acquisition Sub will merge with and into Ameri & Partners, so that Ameri & Partners will be the surviving corporation and become a wholly-owned subsidiary of the Company (the “ Merger ”);
 
WHEREAS , simultaneously with the consummation of the Merger, the Company desires to sell, and the Purchaser desires to purchase, a 5% Convertible Unsecured Promissory Note due May 26, 2017 of the Company, which note shall be in the aggregate principal amount of Five Million Dollars ($5,000,000.00) and shall be in substantially the form of Exhibit A hereto (the “ Note ”); and
 
WHEREAS , in connection with the purchase of the Note, this Agreement also provides for the grant to the Purchaser of a warrant to purchase shares of common stock, par value $0.01 per share, of the Company (“ Common Stock ”).
 
NOW, THEREFORE , in consideration of the foregoing premises and the covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
 
ARTICLE I
 
Purchase and Sale of the Note and Warrant
 
Section 1.1              Purchase of the Note .  At the Closing (as hereinafter defined) and subject to the terms and conditions hereof and in reliance upon the representations, warranties and agreements contained herein, the Company will issue and sell the Note to the Purchaser, and the Purchaser will purchase the Note from the Company, for the purchase price equal to the original principal amount of the Note (the “ Purchase Price ”).  For purposes hereof, the term “ Conversion Shares ” means any shares of Common Stock into which the Note is convertible according to its terms.
 
 
 

 
 
Section 1.2              The Closing .  The purchase and sale of the Note shall take place at a closing (the “ Closing ”) on the date hereof or such other date as the Purchaser and the Company may agree upon (the “ Closing Date ”).  At the Closing, the Company shall deliver to the Purchaser the Note purchased hereunder, registered in the name of the Purchaser or its nominee.  On the Closing Date, the Purchaser shall deliver by wire transfer the cash Purchase Price hereunder to an account designated in writing by the Company.  In addition, each party shall deliver all documents, instruments and writings required to be delivered by such party pursuant to this Agreement at or prior to the Closing.
 
Section 1.3              Warrant .  At the Closing, the Company will execute and deliver to the Purchaser a warrant, substantially in the form attached hereto as Exhibit B (the “ Warrant ”).  The shares of Common Stock that are issuable upon exercise pursuant to the Warrant are hereafter referred to as the “ Warrant Shares.
 
Section 1.4              Registration Rights Agreement .  At the Closing, the Company and the Purchaser will enter into a Registration Rights Agreement in substantially the form set forth as Exhibit C hereto (the “ Registration Rights Agreement ”).
 
ARTICLE II
 
Representations and Warranties
 
Section 2.1              Representations and Warranties of the Company .  The Company hereby makes the following representations and warranties to the Purchaser as of the date hereof and the Closing Date:
 
(a)             Organization and Qualification; Material Adverse Effect .  The Company is a corporation duly incorporated and existing in good standing under the laws of the State of Delaware and has the requisite corporate power to own its properties and to carry on its business as now being conducted.  The Company is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary other than those in which the failure so to qualify would not have a Material Adverse Effect.  “ Material Adverse Effect ” means any adverse effect on the business, operations, properties, prospects or financial condition of the Company and its subsidiaries, if any, and which is (either alone or together with all other adverse effects) material to the Company and its subsidiaries.
 
(b)             Authorization; Enforcement .  (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement, the Note, the Warrant, the Registration Rights Agreement, and any other agreements or documents delivered by the Company at the Closing (“ Transaction Documents ”) and to issue the Note and Warrant in accordance with the terms hereof, (ii) the execution and delivery of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby, including the issuance of the Note, have been duly authorized by all necessary corporate action, and no further consent or authorization of the Company or its Board of Directors (or any committee or subcommittee thereof) or stockholders is required, (iii) the Transaction Documents have been duly executed and delivered by the Company, (iv) the Transaction Documents constitute valid and binding obligations of the Company enforceable against the Company, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of creditors’ rights and remedies or by other equitable principles of general application, and (v) the Warrant Shares and the Conversion Shares have been duly authorized and, upon issuance thereof and payment therefor in accordance with the terms of the Warrant and the Note, as the case may be, will be validly issued, fully paid and non-assessable, free and clear of any and all liens, claims and encumbrances.
 
 
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(c)             No Conflicts .  The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby and issuance of the Note, the Conversion Shares, the Warrant and the Warrant Shares will not (i) result in a violation of the Certificate of Incorporation; (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its subsidiaries is a party, or (iii) to the Company’s knowledge result in a violation of any law, rule, regulation, order, judgment or decree (including United States federal and state securities laws) applicable to the Company or any of its subsidiaries or by which any property or asset of the Company or any of its subsidiaries is bound or affected, except in the case of clause (ii), such conflicts that would not have a Material Adverse Effect.
 
(d)             SEC Documents .  Since December 31, 2014, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “ SEC Documents ”).  To the Company’s knowledge, as of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
 
(e)             No Contemplated Bankruptcy .  On the date hereof, the Company does not contemplate and has no knowledge of any person contemplating the filing of any petition against the Company or any subsidiary under any federal or state bankruptcy, insolvency, receivership or other such law.  The Company does not intend to, and does not believe that it will, incur debts and liabilities (including, among other things, contingent liabilities and other commitments) beyond its ability to pay such debts as they mature (taking into account the timing and amounts to be payable on or in respect of obligations of Company).  The execution, delivery, observance, performance and fulfillment of Company’s obligations and duties under this Agreement will not render the Company insolvent or unable to pay its debts as they become due.  The Company has (a) not entered into the transactions contemplated by this Agreement with the actual intent to hinder, delay, or defraud any creditor and (b) received reasonably equivalent value in exchange for its obligations under this Agreement.
 
 
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(f)             Incorporation of Merger Agreement Representations and Warranties .  The Company (as successor in interest to the business of Ameri & Partners) hereby confirms that each and every representation and warranty (the “ Business Representations and Warranties ”) made by Ameri & Partners in Section 2 of the Merger Agreement (together with the disclosure schedules referenced therein) is hereby incorporated herein by reference in its entirety to the same extent and with the same force and effect as if each of them was fully and completely set forth herein, and may be relied upon by the Purchaser as if repeated in full by the Company herein.
 
Section 2.2              Representations and Warranties of the Purchaser .  The Purchaser hereby makes the following representations and warranties to the Company as of the date hereof and the Closing Date:
 
(a)             Accredited Investor Status; Sophisticated Purchaser .  The Purchaser is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “ Securities Act ”).  The Purchaser has such knowledge and experience in financial and business matters that the Purchaser is capable of evaluating the merits and risks of the purchase of the Note, the Conversion Shares, the Warrant and the Warrant Shares.  The Purchaser is not registered as a broker or dealer under Section 15(a) of the Exchange Act, affiliated with any broker or dealer registered under Section 15(a) of the Exchange Act, or a member of the Financial Industry Regulatory Authority.
 
(b)             Information .  The Purchaser and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company which have been requested and materials relating to the offer and sale of the Note, the Conversion Shares, the Warrant and the Warrant Shares, which have been requested by the Purchaser.  The Purchaser and its advisors, if any, have been afforded the opportunity to ask questions of the Company.  The Purchaser acknowledges that its purchase of the Note, Warrant, and (if applicable) the Conversion Shares and the Warrant Shares involves a high degree of risk and that Purchaser may never recover Purchaser’s investment in these securities.
 
(c)             Investment Representation .  The Purchaser is purchasing the Note and the Warrant for the Purchaser’s own account and not with a view to distribution in violation of any securities laws.  The Purchaser has been advised and understands that neither the Note, the Warrant, the Conversion Shares nor the Warrant Shares have been registered under the 1933 Act or under the “blue sky” laws of any jurisdiction and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law.  The Purchaser has been advised and understands that the Company, in issuing the Note and the Warrant, is relying upon, among other things, the representations and warranties of the Purchaser contained in this Section 2.2 in concluding that such issuance is a “private offering” and is exempt from the registration provisions of the Securities Act.
 
 
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(d)             Rule 144 .  The Purchaser understands that there is no public trading market for the Note or Warrant, that none is expected to develop, and that the Note and Warrant must be held indefinitely unless and until such Note and the Warrant, or if applicable, the Warrant Shares and Conversion Shares, are registered under the Securities Act or an exemption from registration is available.  The Purchaser has been advised or is aware of the provisions of Rule 144 promulgated under the Securities Act.
 
ARTICLE III
 
Covenants and Acknowledgments
 
Section 3.1              Senior Status of the Note .  Beginning on the date of this Agreement and for so long as the Note remains outstanding, neither the Company nor any subsidiary of the Company shall, without the prior written consent of Purchaser, incur or otherwise become liable with respect to any indebtedness that would rank senior or pari passu to the Note in order of payment, except that (i) indebtedness and obligations in existence on the date hereof and trade payables incurred in the ordinary course of business shall not be required to be subordinated to the Note, and the Company may pay such obligations and payables as they become due, (ii) the Company shall be permitted to incur secured indebtedness used solely to finance the purchase or lease of assets (provided that such debt may only be secured by the purchased or leased assets and not by any other assets of the Company) and shall be permitted to pay such indebtedness as it becomes due, and (iii) the Note shall be subordinate to, and the Company shall be permitted to incur, any indebtedness under a Qualified Credit Facility.  For purposes hereof, a “ Qualified Credit Facility ” shall mean any secured or unsecured credit facility that the Company may obtain after the date hereof from a lender that makes commercial loans or extends commercial credit facilities in the ordinary course of its business which is secured by inventory and/or accounts receivable, provided that the amount of such indebtedness thereunder shall not exceed fifty percent (50%) of the fair market value of eligible inventory (in the case of a loan based on and secured by inventory), plus eighty percent (80%) of eligible accounts receivable (in the case of a loan based on and secured by accounts receivable).  Purchaser hereby agrees to execute any acknowledgment or sign any reasonable subordination agreement evidencing the fact that the Note is subordinate to such a credit facility in all respects, including right of payment and security.
 
ARTICLE IV
 
Legend and Stock
 
Upon payment therefor as provided in this Agreement, the Company will issue the Note in the name the Purchaser or its designees and in such denominations to be specified by the Purchaser prior to (or from time to time subsequent to) Closing.  The Note and Warrant and any certificate representing Conversion Shares or Warrant Shares issued upon conversion or exercise thereof, prior to such Conversion Shares or Warrant Shares being registered under the Securities Act for resale or available for resale under Rule 144 under the Securities Act, shall be stamped or otherwise imprinted with a legend in substantially the following form:
 
 
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THESE SECURITIES HAVE NOT BEEN REGISTERED FOR OFFER OR SALE UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS.  THEY MAY NOT BE SOLD OR OFFERED FOR SALE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW OR AN APPLICABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
 
The Company agrees to reissue the Note, Conversion Shares and Warrant Shares without the legend set forth above, at such time as (i) the holder thereof is permitted to dispose of securities pursuant to Rule 144 under the Securities Act, or (ii) such securities are sold to a purchaser or purchasers who (in the opinion of counsel to the seller or such purchaser(s), in form and substance reasonably satisfactory to the Company and its counsel) are able to dispose of such shares publicly without registration under the Securities Act, or (iii) such securities have been registered under the Securities Act.
 
ARTICLE V
 
Governing Law; Miscellaneous
 
Section 5.1              Governing Law .  THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS.
 
Section 5.2              Counterparts .  This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature.
 
Section 5.3              Headings .  The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.
 
Section 5.4              Severability .  If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.
 
Section 5.5              Entire Agreement; Amendments; Waivers .  This Agreement supersedes all other prior oral or written agreements between the Purchaser, the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments referenced herein (including the other Transaction Documents) contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Purchaser makes any representation, warranty, covenant or undertaking with respect to such matters.  In addition:
 
 
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A.           The provisions of this Agreement may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and consented to by the Company and the Purchaser.
 
B.            Except as provided herein, no failure or delay on the part of the Purchaser in exercising any power or right under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right.  No notice to or demand on the Company in any case shall entitle it to any notice or demand in similar or other circumstances.  No waiver or approval by the Purchaser shall, except as may be otherwise stated in such waiver or approval, be applicable to subsequent transactions.  No waiver or approval hereunder shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder.
 
Section 5.6             Notices .  Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing, must be delivered by (i) courier, mail or hand delivery or (ii) facsimile, and will be deemed to have been delivered upon receipt.  The addresses and facsimile numbers for such communications shall be:
 
If to the Company:
 
AMERI Holdings, Inc. (formerly Spatializer Audio Laboratories, Inc.)
100 Menlo Park Drive
Edison, New Jersey 08837
Telephone: (732) 243-9250
Fax: (732) 243-9254
Attention:  Mr. Giri Devanur, President and Chief Executive Officer

With a copy to:
 
Warshaw Burstein, LLP
555 Fifth Avenue
New York, New York 10017
Telephone: (212) 984-7700
Fax: (212) 972-9150
Attention: Murray D. Schwartz, Esq.

and
 
Olshan Frome Wolosky LLP
Park Avenue Tower
65 East 55th Street
New York, New York 10022
Telephone: (212) 451-2289
Fax: (212) 451-2222
Attention: Steve Wolosky, Esq.
 
 
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If to the Transfer Agent:
 
Corporate Stock Transfer
3200 Cherry Creek Drive South, Suite 430
Denver, Colorado 80209
Telephone: (303) 282-4800
Facsimile: (303) 282-5800
Attention: Ms. Sherrie Humpherys

If to the Purchaser:
 
Lone Star Value Investors, LP
53 Forest Avenue, 1st Floor
Old Greenwich, CT 06870
Telephone: (203) 489-9500
Fax: (203) 990-0727
Attention: Mr. Jeffrey E. Eberwein

Each party shall provide five (5) days prior written notice to the other party of any change in address, telephone number or facsimile number.  Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.
 
Section 5.7             Successors and Assigns .  Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including any permitted assignee of the Note and Warrant.  The Purchaser may assign some or all of its rights hereunder to any permitted assignee of the Note or Warrant; provided , however , that any such assignment shall not release the Purchaser from its obligations hereunder unless such obligations are assumed by such assignee and the Company has consented to such assignment and assumption.
 
Section 5.8             Further Assurances .  Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
 
Section 5.9             Days .  Unless the context refers to “business days” or “Trading Days,” all references herein to “days” shall mean calendar days.  “ Trading Day ” shall mean a day on which there is trading on the market or exchange on which the Common Stock is then principally traded, listed, or quoted.
 
Section 5.10           Survival .  The representations, warranties, agreements and covenants in this Agreement shall survive the Closing.  For the avoidance of doubt, notwithstanding the fact that the representations and warranties contained in the Merger Agreement survive for six (6) months following the Effective Time (as defined in the Merger Agreement), the Company acknowledges and agrees that the Business Representations and Warranties contained in the Merger Agreement and incorporated by reference into Section 2.1(f) of this Agreement shall survive the Closing for two years following the Closing Date or the expiration of the applicable statute of limitations with respect to the tax obligations referred to in such Business Representations and Warranties.
 
 
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IN WITNESS WHEREOF , the parties hereto have caused this Securities Purchase Agreement to be duly executed as of the date and year first above written.
 
COMPANY:
 
 
AMERI HOLDINGS, INC.
(formerly Spatializer Audio Laboratories, Inc.)
 
By:
/s/ Giri Devanur
 
Name:
Giri Devanur
 
Title:
President and Chief Executive Officer


PURCHASER:
 
 
LONE STAR VALUE INVESTORS, LP
 
By: Lone Star Value Investors GP, LLC, General Partner
 
 
By:
/s/ Jeffrey E. Eberwein
 
Name:
Jeffrey E. Eberwein
 
Title:
Manager
 
 
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Exhibit 10.2
 
REGISTRATION RIGHTS AGREEMENT
 
REGISTRATION RIGHTS AGREEMENT (“ Agreement ”) dated as of May 26, 2015, between AMERI Holdings, Inc. (formerly Spatializer Audio Laboratories, Inc.), a Delaware corporation (the “ Company ”), and Lone Star Value Investors, LP (the “ Purchaser ”).
 
W I T N E S S E T H :
 
WHEREAS , the Company and the Purchaser have entered into a Securities Purchase Agreement of even date herewith (the “ Purchase Agreement ”) pursuant to which, among other things, the Company has on or about the date hereof issued a 5% Convertible Unsecured Promissory Note due May 26, 2017 (the “ Note ”) and Common Stock Purchase Warrant (the “ Warrant ”) to purchase shares of the Company’s Common Stock, par value $0.01 per share (“ Common Stock ”), subject to the terms and conditions set forth therein; and
 
WHEREAS , the Note is convertible into shares of Common Stock under the circumstances and pursuant to the terms and conditions set forth in the Note (the “ Conversion Shares ”), and the Warrant is exercisable into shares of Common Stock pursuant to the terms and conditions set forth in the Warrant (the “ Warrant Shares ”).
 
NOW, THEREFORE , in consideration of the mutual promises, representations, warranties, covenants and conditions set forth in the Purchase Agreement and this Agreement, the Company and the Purchaser agree as follows:
 
1.             Certain Definitions .  Capitalized terms used herein and not otherwise defined shall have the meaning ascribed thereto in the Purchase Agreement, the Note, or the Warrant.  As used in this Agreement, the following terms shall have the following respective meanings:
 
Closing ” and “ Closing Date ” shall have the meanings ascribed to such terms in the Purchase Agreement.
 
Commission ” or “ SEC ” shall mean the U.S. Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.
 
Holder ” and “ Holders ” shall include the Purchaser and any permitted transferee or transferees of Registrable Securities (as defined below), the Notes and/or Warrants which have not been sold to the public to whom the registration rights conferred by this Agreement have been transferred in compliance with this Agreement and the Purchase Agreement; provided that neither such person nor any affiliate of such person is registered as a broker or dealer under Section 15(a) of the Securities Exchange Act of 1934, as amended, or a member of the Financial Industry Regulatory Authority.
 
The terms “ register , registered ” and “ registration ” shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement.
 
 
 

 
 
Registrable Securities ” shall mean: (i) the Conversion Shares and Warrant Shares or other securities issued or issuable to each Holder or its permitted transferee or designee (a) upon the conversion of the Notes or the exercise of the Warrants, or (b) upon any distribution with respect to, any exchange for or any replacement of such Notes or Warrants, or (c) upon any conversion, exercise or exchange of any securities issued in connection with any such distribution, exchange or replacement; (ii) securities issued or issuable upon any stock split, stock dividend, recapitalization or similar event with respect to the foregoing; and (iii) any other security issued as a dividend or other distribution with respect to, in exchange, for or in replacement of the securities referred to in the preceding clauses; provided that all such shares shall cease to be Registrable Securities at such time as they have been sold under a Registration Statement or pursuant to Rule 144 under the Securities Act or otherwise or at such time as they are eligible to be sold without the need for current public information or other restriction by the Purchaser pursuant to Rule 144.
 
Registration Expenses ” shall mean all expenses to be incurred by the Company in connection with each Holder’s registration rights under this Agreement, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, blue sky fees and expenses, and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company, which shall be paid in any event by the Company).
 
Registration Statement ” shall have the meaning set forth in Section 2(a) herein.
 
Regulation D ” shall mean Regulation D as promulgated pursuant to the Securities Act, and as subsequently amended.
 
Securities Act ” shall mean the Securities Act of 1933, as amended.
 
Selling Expenses ” shall mean all underwriting discounts and selling commissions applicable to the sale of Registrable Securities and all fees and disbursements of counsel for Holders not included within “ Registration Expenses .
 
2.               Registration Requirements .  The Company shall use its best efforts to effect the registration of the Registrable Securities (including, without limitation, the execution of an undertaking to file post-effective amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with applicable regulations issued under the Securities Act) as would permit or facilitate the sale or distribution of all the Registrable Securities in the manner (including manner of sale) and in all states reasonably requested by the Holder. Such best efforts by the Company shall include, without limitation, the following:
 
(a)            The Company shall, as expeditiously as possible, but in any event within sixty (60) days, if and upon the written request of the Purchaser at any time on or before May 26, 2017:
 
(i)             Prepare and file a registration statement with the Commission pursuant to Rule 415 under the Securities Act on Form S-3 under the Securities Act (or in the event that the Company is ineligible to use such form, such other form as the Company is eligible to use under the Securities Act provided that such other form shall be converted into an S-3 as soon as Form S-3 becomes available to the Company) covering resales by the Holders as selling stockholders (not underwriters) of the Registrable Securities (“ Registration Statement ”), which Registration Statement, to the extent allowable under the Securities Act and the rules promulgated thereunder (including Rule 416), shall state that such Registration Statement also covers such number of additional shares of Common Stock as may become issuable pursuant to the anti-dilution provisions of the Notes or Warrants. The number of shares of Common Stock initially included in such Registration Statement shall be no less than the product of 1.2 times the sum of the number of shares of Common Stock that are issuable upon exercise of the Warrants as of the date of this Agreement at the then applicable Exercise Price (as defined in the Warrant) plus the number of shares of Common Stock that would be issuable pursuant to the conversion of the Notes (assuming that the Notes were to become convertible on the date before which the Registration Statement is filed). Thereafter the Company shall use its best efforts to cause such Registration Statement and other filings to be declared effective as soon as possible, and in any event no later than the following date, as appropriate (the “ Required Effective Date ”): (A) if the SEC notifies the Company that the SEC will not review the Registration Statement, the Required Effective Date shall be five (5) days after the SEC provides such notification, or (B) if the SEC notifies the Company that it will review the Registration Statement, then the Required Effective Date shall be sixty (60) days after the Company receives the first written comments on the Registration Statement from the SEC. Without limiting the foregoing, the Company will promptly respond to all SEC comments, inquiries and requests, and shall request acceleration of effectiveness at the earliest possible date.
 
 
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(ii)            Prepare and file with the SEC such amendments and supplements to such Registration Statement and the prospectus used in connection with such Registration Statement as may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such Registration Statement and notify the Holders of the filing and effectiveness of such Registration Statement and any amendments or supplements.
 
(iii)           Furnish to each Holder that has Registrable Securities included in the Registration Statement such numbers of copies of a current prospectus conforming with the requirements of the Act, copies of the Registration Statement, any amendment or supplement thereto and any documents incorporated by reference therein and such other documents as such Holder may reasonably require in order to facilitate the disposition of Registrable Securities owned by such Holder.
 
(iv)           Register and qualify the securities covered by such Registration Statement under the securities or “Blue Sky” laws of all domestic jurisdictions; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions.
 
(v)            Notify promptly each Holder that has Registrable Securities included in the Registration Statement of the happening of any event (but not the substance or details of any such event) of which the Company has knowledge as a result of which the prospectus (including any supplements thereto or thereof) included in such Registration Statement, as then in effect, includes an untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing (each an “ Event ”), and use its best efforts to promptly update and/or correct such prospectus. Each Holder will hold in confidence and will not make any disclosure of any such Event and any related information disclosed by the Company.
 
 
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(vi)           Notify each Holder of the issuance by the SEC or any state securities commission or agency of any stop order suspending the effectiveness of the Registration Statement or the threat or initiation of any proceedings for that purpose.  The Company shall use its best efforts to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible time.
 
(vii)          List the Registrable Securities covered by such Registration Statement with all securities exchange(s) and/or markets on which the Common Stock is then listed and prepare and file any required filings with the Nasdaq Stock Market or any other exchange or market where the shares of Common Stock are traded.
 
(viii)        Take all steps reasonably necessary to enable Holders to avail themselves of the prospectus delivery mechanism set forth in Rule 153 (or successor thereto) under the Act.
 
(b)            Notwithstanding the obligations under Section 2(a)(v) or any provision of this Agreement, if (i) in the good faith judgment of the Company, following consultation with legal counsel, it would be detrimental to the Company and its stockholders for resales of Registrable Securities to be made pursuant to the Registration Statement due to the existence of a material development or potential material development involving the Company that the Company would be obligated to disclose in the Registration Statement, which disclosure would be premature or otherwise inadvisable at such time or would have a material adverse effect upon the Company and its stockholders, or (ii) in the good faith judgment of the Company, it would adversely affect or require premature disclosure of the filing of a Company-initiated registration of any class of its equity securities, then the Company will have the right to suspend the use of the Registration Statement for a period of not more than 30 consecutive calendar days, but only if the Company reasonably concludes, after consultation with outside legal counsel, that the failure to suspend the use of the Registration Statement as such would create a risk of a material liability or violation under applicable securities laws or regulations.
 
(c)            During the registration period, the Company will make available, upon reasonable advance notice during normal business hours, for inspection by any Holder whose Registrable Securities are being sold pursuant to a Registration Statement, all pertinent financial and other records, pertinent corporate documents and properties of the Company (collectively, the “ Records ”) as reasonably necessary to enable each such Holder to exercise its due diligence responsibility in connection with or related to the contemplated offering. The Company will cause its officers, directors and employees to supply all information that any Holder may reasonably request for purposes of performing such due diligence.
 
(d)            Each Holder will hold in confidence, use only in connection with the contemplated offering and not make any disclosure of all Records and other information that the Company determines in good faith to be confidential, and of which determination the Holders are so notified, unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement, (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court or government body of competent jurisdiction, (iii) the information in such Records has been made generally available to the public other than by disclosure in violation of this or any other agreement (to the knowledge of the relevant Holder), (iv) the Records or other information was developed independently by the Holder without breach of this Agreement, (v) the information was known to the Holder before receipt of such information from the Company, or (vi) the information was disclosed to the Holder by a third party not under an obligation of confidentiality. However, a Holder may make disclosure of such Records and other information to any attorney, adviser, or other third party retained by it that needs to know the information as determined in good faith by the Holder (the “ Holder Representative ”), if the Holder advises the Holder Representative of the confidentiality provisions of this Section 2(e), but the Holder will be liable for any act or omission of any of its Holder Representatives relative to such information as if the act or omission was that of the Holder. The Company is not required to disclose any confidential information in the Records to any Holder unless and until such Holder has entered into a confidentiality agreement (in form and substance satisfactory to the Company) with the Company with respect thereto, substantially to the effect of this Section 2(e).  Unless legally prohibited from so doing, each Holder will, upon learning that disclosure of Records containing confidential information is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at the Company’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential.  Nothing herein will be deemed to limit the Holder’s ability to sell Registrable Securities in a manner that is otherwise consistent with applicable laws and regulations.
 
 
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(e)            The Company shall file a Registration Statement with respect to any newly authorized and/or reserved Registrable Securities consisting of Conversion Shares and Warrant Shares described in clause (i) of the definition of Registrable Securities within ten (10) business days of any stockholders’ meeting authorizing same and shall use its best efforts to cause such Registration Statement to become effective within ninety (90) days of such stockholders’ meeting.  If the Holders become entitled, pursuant to an event described in clause (ii) and (iii) of the definition of Registrable Securities, to receive any securities in respect of Registrable Securities that were already included in a Registration Statement, subsequent to the date such Registration Statement is declared effective, and the Company is unable under the securities laws to add such securities to the then effective Registration Statement, the Company shall promptly file, in accordance with the procedures set forth herein, an additional Registration Statement with respect to such newly Registrable Securities. The Company shall use its best efforts to (i) cause any such additional Registration Statement, when filed, to become effective within 30 days of that date that the need to file the Registration Statement arose.  All of the registration rights and remedies under this Agreement shall apply to the registration of such newly reserved shares and such new Registrable Securities.
 
3.               Expenses of Registration .  All Registration Expenses in connection with any registration, qualification or compliance with registration pursuant to this Agreement shall be borne by the Company, and all Selling Expenses of a Holder shall be borne by such Holder.
 
 
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4.               Registration on Form S-3 .  The Company shall use its reasonable best efforts to meet the “registrant eligibility” requirements for a secondary offering set forth in the general instructions to Form S-3 or any comparable or successor form or forms, or in the event that the Company is ineligible to use such form, such form as the Company is eligible to use under the Securities Act, provided that if such other form is used, the Company shall convert such other form to a Form S-3 as soon as the Company becomes so eligible.
 
5.               Registration Period .  In the case of the registration effected by the Company pursuant to this Agreement, the Company shall keep such registration effective until the later of (a) the date on which all the Holders have completed the sales or distribution described in the Registration Statement relating thereto or, if earlier until such Registrable Securities may be sold by the Holders under Rule 144 (provided that the Company’s transfer agent has accepted an instruction from the Company to such effect) or (b) the second (2nd) anniversary of the Closing Date.
 
6.               Indemnification.
 
(a)             Company Indemnity .  The Company will indemnify each Holder, each of its officers, directors, agents and partners, and each person controlling each of the foregoing, within the meaning of Section 15 of the Securities Act and the rules and regulations thereunder with respect to which registration, qualification or compliance has been effected pursuant to this Agreement, and each underwriter, if any, and each person who controls, within the meaning of Section 15 of the Securities Act and the rules and regulations thereunder, any underwriter, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any final prospectus (as amended or supplemented if the Company files any amendment or supplement thereto with the SEC), Registration Statement filed pursuant to this Agreement or any post-effective amendment thereof or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances under which they were made, or any violation by the Company of the Securities Act or any state securities law or in either case, any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, and will reimburse each Holder, each of its officers, directors, agents and partners, and each person controlling each of the foregoing, for any reasonable legal fees of a single counsel and any other expenses reasonably incurred in connection with investigating and defending any such claim, loss, damage, liability or action, provided that the Company will not be liable in any such case to a Holder to the extent that any such claim, loss, damage, liability or expense arises out of or is based on (i) any untrue statement or omission based upon written information furnished to the Company by such Holder or underwriter (if any) therefor and stated to be specifically for use therein, (ii) any failure by any Holder to comply with prospectus delivery requirements or the Securities Act or Exchange Act or any other law or legal requirement applicable to them or any covenant or agreement contained in the Purchase Agreement or this Agreement or (iii) an offer of sale of Conversion Shares or Warrant Shares occurring during a period in which sales under the Registration Statement are suspended as permitted by this Agreement. The indemnity agreement contained in this Section 6(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent will not be unreasonably withheld).
 
 
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(b)             Holder Indemnity .  Each Holder will, severally but not jointly, if Registrable Securities held by it are included in the securities as to which such registration, qualification or compliance is being effected, indemnify the Company, each of its directors, officers, agents and partners, and any other stockholder selling securities pursuant to the Registration Statement and any of its directors, officers, agents, partners, and any person who controls such stockholder within the meaning of the Securities Act or Exchange Act and each underwriter, if any, of the Company’s securities covered by such a Registration Statement, each person who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act and the rules and regulations thereunder, each other Holder (if any), and each of their officers, directors and partners, and each person controlling such other Holder(s) against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on (i) any untrue statement (or alleged untrue statement) of a material fact contained in any such final prospectus (as amended or supplemented if the Company files any amendment or supplement thereto with the SEC), Registration Statement filed pursuant to this Agreement or any post- effective amendment thereof or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statement therein not misleading in light of the circumstances under which they were made or (ii) failure by any Holder to comply with prospectus delivery requirements or the Securities Act, Exchange Act or any other law or legal requirement applicable to them or any covenant or agreement contained in the Purchase Agreement or this Agreement, and will reimburse the Company and such other Holder(s) and their directors, officers and partners, underwriters or control persons for any reasonable legal fees or any other expenses reasonably incurred in connection with investigating and defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such final prospectus (as amended or supplemented if the Company files any amendment or supplement thereto with the SEC), Registration Statement filed pursuant to this Agreement or any post-effective amendment thereof in reliance upon and in conformity with written information furnished to the Company by such Holder and stated to be specifically for use therein, and provided that the maximum amount for which such Holder shall be liable under this indemnity shall not exceed the net proceeds received by the Holders from the sale of the Registrable Securities pursuant to the registration statement in question. The indemnity agreement contained in this Section 6(b) shall not apply to amounts paid in settlement of any such claims, losses, damages or liabilities if such settlement is effected without the consent of such Holder (which consent shall not be unreasonably withheld).
 
(c)             Procedure .  Each party entitled to indemnification under this Section 6 (the “ Indemnified Party ”) shall give notice to the party required to provide indemnification (the “ Indemnifying Party ”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim in any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at its own expense, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 6 except to the extent that the Indemnifying Party is materially and adversely affected by such failure to provide notice. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation.  Each Indemnified Party shall furnish such non-privileged information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with the defense of such claim and litigation resulting therefrom.
 
 
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7.               Contribution .  If the indemnification provided for in Section 6 herein is unavailable to the Indemnified Parties in respect of any losses, claims, damages or liabilities referred to herein (other than by reason of the exceptions provided therein), then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities as between the Company on the one hand and any Holder(s) on the other, in such proportion as is appropriate to reflect the relative fault of the Company and of such Holder(s) in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of any Holder(s) on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by such Holder(s).
 
In no event shall the obligation of any Indemnifying Party to contribute under this Section 7 exceed the amount that such Indemnifying Party would have been obligated to pay by way of indemnification if the indemnification provided for under Section 6(a) or 6(b) hereof had been available under the circumstances.
 
The Company and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraphs.  The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraphs shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this Section, no Holder shall be required to contribute any amount in excess of the amount equal to the net proceeds received by such Holder from the sale of Registrable Securities pursuant to the registration statement in question.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
 
8.               Survival .  The indemnity and contribution agreements contained in Sections 6 and 7 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement or the Purchase Agreement, and (ii) the consummation of the sale or successive resales of the Registrable Securities.
 
 
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9.               Information by Holders .  As a condition to the obligations of the Company to complete any registration pursuant to this Agreement with respect to the Registrable Securities of each Holder, such Holder will furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended methods of disposition of the Registrable Securities held by it as is reasonably required by the Company to effect the registration of the Registrable Securities.  At least ten business days prior to the first anticipated filing date of a Registration Statement for any registration under this Agreement, the Company will notify each Holder of the information the Company requires from that Holder whether or not such Holder has elected to have any of its Registrable Securities included in the Registration Statement.  If the Company has not received the requested information from a Holder by the business day prior to the anticipated filing date, then the Company may file the Registration Statement without including Registrable Securities of that Holder.
 
10.             Further Assurances .  Each Holder will cooperate with the Company, as reasonably requested by the Company, in connection with the preparation and filing of any Registration Statement hereunder, unless such Holder has notified the Company in writing of such Holder’s irrevocable election to exclude all of such Holder’s Registrable Securities from such Registration Statement.
 
11.             Suspension of Sales .  Upon receipt of any notice from the Company under Section 2(a)(v) or 2(b), each Holder will immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until (i) it receives copies of a supplemented or amended prospectus contemplated by Sections 2(a)(v) or (ii) the Company advises the Holder that a suspension of sales under Section 2(b) has terminated.  If so directed by the Company, each Holder will deliver to the Company (at the expense of the Company) or destroy all copies in the Holder’s possession (other than a limited number of file copies) of the prospectus covering such Registrable Securities that is current at the time of receipt of such notice.
 
12.             Replacement Certificates .  The certificate(s) representing the Registrable Securities held by the Purchaser (or then Holder) may be exchanged by the Purchaser (or such Holder) at any time and from time to time for certificates with different denominations representing an equal aggregate number of shares of Common Stock, as reasonably requested by such Purchaser (or such Holder) upon surrendering the same.  No service charge will be made for such registration or transfer or exchange.  Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of the Note or certificates for the underlying shares of Common Stock of any of the foregoing, and, in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it, or upon surrender and cancellation of such certificate if mutilated, the Company will make and deliver a new Note or certificate of like tenor and dated as of such cancellation at no charge to the holder.
 
13.             Transfer or Assignment .  Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.  The rights granted to the Purchaser by the Company under this Agreement to cause the Company to register Registrable Securities may be transferred or assigned (in whole or in part) to a transferee or assignee of the Notes, Warrants or Registrable Securities, and all other rights granted to the Purchaser by the Company hereunder may be transferred or assigned to any transferee or assignee of the Notes, Warrants or Registrable Securities; provided in each case that (i) the Company is given written notice by the Purchaser at the time of or within a reasonable time after such transfer or assignment, stating the name and address of said transferee or assignee and identifying the securities with respect to which such registration rights are being transferred or assigned; and provided further that the transferee or assignee of such rights agrees in writing to be bound by the registration provisions of this Agreement, (ii) such transfer or assignment is not made under the Registration Statement or Rule 144, (iii) such transfer is made according to the applicable requirements of the Purchase Agreement, and (iv) the transferee has provided to the Company an investor questionnaire (or equivalent document) evidencing that the transferee is a “qualified institutional buyer” or an “accredited investor” defined in Rule 501(a)(1),(2),(3), or (7) of Regulation D.
 
 
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14.             Miscellaneous.
 
(a)             Remedies .  The Company and the Purchaser acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which any of them may be entitled by law or equity.
 
(b)             Jurisdiction .  Each of the Company and the Purchaser (i) hereby irrevocably submits to the exclusive jurisdiction of the United States District Court, the New York state courts and other courts of the United States sitting in New York, New York for the purposes of any suit, action or proceeding arising out of or relating to this Agreement and (ii) hereby waives, and agrees not to assert in any such suit action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper. The Company and the Purchaser consent to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing in this paragraph shall affect or limit any right to serve process in any other manner permitted by law.
 
(c)             Notices .  Any notice or other communication required or permitted to be given hereunder shall be in writing by facsimile, mail or personal delivery and shall be effective upon actual receipt of such notice.  The addresses for such communications shall be:
 
to the Company:
 
AMERI Holdings, Inc. (formerly Spatializer Audio Laboratories, Inc.)
100 Menlo Park Drive
Edison, New Jersey 08837
Telephone: (732) 243-9250
Fax: (732) 243-9254
Attention: Mr. Giri Devanur, President and Chief Executive Officer
 
 
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If to the Purchaser:
 
Lone Star Value Investors, LP
53 Forest Avenue, 1 st Floor
Old Greenwich, Connecticut  06870
Telephone:  (203) 489-9500
Fax: (203) 990-0727
Attention: Mr. Jeffrey E. Eberwein

Any party hereto may from time to time change its address for notices by giving at least five days’ written notice of such changed address to the other parties hereto.
 
(d)             Waivers .  No waiver by any party of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter.  The representations and warranties and the agreements and covenants of the Company and each Purchaser contained herein shall survive the Closing.
 
(e)             Execution in Counterpart .  This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement, it being understood that all parties need not sign the same counterpart.
 
(f)              Signatures .  Facsimile signatures shall be valid and binding on each party submitting the same.
 
(g)             Entire Agreement: Amendment .  This Agreement, together with the Purchase Agreement, the Notes, the Warrants, and the agreements and documents contemplated hereby and thereby, contains the entire understanding and agreement of the parties, and may not be amended, modified or terminated except by a written agreement signed by the Company and the Holder of the Registrable Securities seeking registration of such securities.
 
(h)             Governing Law .  This Agreement and the validity and performance of the terms hereof shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts executed and to be performed entirely within such state, except to the extent that the law of the State of Delaware regulates the Company’s issuance of securities.
 
(i)              Jury Trial .  EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY JURY.
 
(j)              Force Majeure .  The Company shall not be deemed in breach of its commitments under this Agreement and no payments by the Company as set forth in Section 2 shall be required if the Company is unable to fulfill its obligations hereunder in a timely fashion if the SEC or the Nasdaq Stock Market are closed or operating on a limited basis as a result of the occurrence of a Force Majeure.  As used herein, “ Force Majeure ” means war or armed hostilities or other national or international calamity, or one or more acts of terrorism, which are having a material adverse effect on the financial markets in the United States.  Furthermore, any payments owed as a result of Section 2 shall not accrue during any period during which the Company’s performance hereunder has been delayed or the Company’s ability to fulfill its obligations hereunder has been impaired by a Force Majeure.
 
 
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(k)             Titles .  The titles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
 
(l)              No Strict Construction .  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party.
 
IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be duly executed as of the date first above written.
 
COMPANY:
 
AMERI HOLDINGS, INC.
(formerly Spatializer Audio Laboratories, Inc.)
 
 
By:
/s/ Giri Devanur
 
Name:  Giri Devanur
Title:  President and Chief Executive Officer
 
 
PURCHASER:
 
LONE STAR VALUE INVESTORS, LP
 
By: Lone Star Value Investors GP, LLC, General Partner
 
 
By:
/s/ Jeffrey E. Eberwein
 
Name:  Jeffrey E. Eberwein
 
Title:  Manager
 
 
 
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Exhibit 10.3
 
STOCK PURCHASE AGREEMENT
 
STOCK PURCHASE AGREEMENT, dated as of May 26, 2015 (the “ Agreement ”), by and between Spatializer Audio Laboratories, Inc., a Delaware corporation (“ Purchaser ”), and each of the undersigned shareholders (each a “ Shareholder ” and, collectively, the “ Shareholders ”) of Ameri Consulting Service Private Limited, a corporation organized under the laws of India (“ Ameri India ”).
 
WITNESSETH:
 
WHEREAS, the Shareholders are the owners of all of the outstanding shares of Ameri India (the “ Shares ”); and
 
WHEREAS, Purchaser wishes to acquire the Shares from the Shareholders, and the Shareholders are willing to sell the Shares, subject to the terms and conditions set forth herein;
 
NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency whereof is hereby mutually acknowledged, the parties agree as follows:
 
 
1.
Purchase of Shares
 
1.1             Purchase of Initial Shares.
 
(a)             Purchase .  Subject to the terms and conditions herein stated, the Shareholders hereby agree to sell, assign, transfer and deliver to Purchaser on the Initial Closing Date, as defined below, and Purchaser hereby agrees to purchase from the Shareholders on the Initial Closing Date all right, title and interest of the Shareholders in and to 24.9% of the outstanding Shares in Ameri India (the “ Initial Shares ”) for aggregate consideration of (a) $1.00 and (b) the consideration furnished by Purchaser to the Shareholders and their affiliates pursuant to that certain Merger Agreement, dated as of the date hereof, among Spatializer Audio Laboratories, Inc. and Ameri and Partners Inc., (the “ Merger Agreement ”), the value and sufficiency of which is hereby mutually acknowledged.
 
(b)             Initial Closing .  The date and time of the Initial Closing (the “ Initial Closing Date ”) shall take place simultaneously with the execution and delivery of this Agreement and the consummation of the Merger Agreement (or such other date as is mutually agreed to by Purchaser and Seller) after notification of satisfaction (or waiver) of the conditions to Closing set forth in Section 6 below, at the offices of Olshan Frome Wolosky LLP, Park Avenue Tower, 65 East 55 th Street, New York, New York 10022.
 
1.2             Purchase of Remaining Interests .
 
(a)             Purchase .  Subject to the terms and conditions herein stated, the Shareholders hereby agree to sell, assign, transfer and deliver to Purchaser on the Final Closing Date, as defined below, and Purchaser hereby agrees to purchase from the Shareholders on the Final Date all right, title and interest of the Shareholders in and to the remaining 75.1% of the outstanding Shares in Ameri India (the “ Remaining Shares ”), so that Purchaser will then have received 100% of the outstanding Shares, for aggregate consideration of (a) $1.00 and (b) the consideration furnished by Purchaser to the Shareholders and their affiliates pursuant to the Merger Agreement.
 
 
 

 
 
(b)             Final Closing .  The date and time of the Final Closing (the “ Final Closing Date ”) shall be 5:00 p.m., New York City time, on the third business day following notification of satisfaction (or waiver) of the conditions to Closing set forth in Section 6 below (or such other date as is mutually agreed to by Purchaser and the Shareholders), at the offices of Olshan Frome Wolosky LLP, Park Avenue Tower, 65 East 55 th Street, New York, New York 10022.
 
1.3             Shareholders’ Deliveries .  At the Initial Closing and the Final Closing, as applicable, the Shareholders shall deliver, or cause to be delivered, to Purchaser or its designee, the certificated securities and all other documentation evidencing the Initial Shares and Remaining Shares, respectively, including duly executed instruments of transfer or assignment with respect to the Initial Shares and Remaining Shares, respectively, in form and substance reasonably satisfactory to Purchaser.
 
1.4             Purchaser’s Deliveries .  At the Final Closing, Purchaser shall deliver, or cause to be delivered, to the Shareholders or its designee, $2.00 cash.
 
 
2.
Representations and Warranties
 
2.1             The Shareholders and Ameri India .  The Shareholders and Ameri India represent and warrant as follows and acknowledge that Purchaser is relying upon such representations and warranties in connection with the purchase by Purchaser of the Shares:
 
(a)            Ameri India is duly incorporated under the Indian Companies Act of 1956 and validly existing under the laws of India;
 
(b)            The authorized capital stock of Ameri India consists of 7,500,000 shares, par value 10 Indian Rupees, and includes the Shares, and the Shares have been duly issued and are outstanding and are fully paid and non-assessable;
 
(c)            No person, corporation or other entity has any agreement, option, warrant or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, option or warrant for the purchase from either the Shareholders or Ameri India of any securities (including convertible securities) of Ameri India;
 
(d)            All of the Shares are owned by the Shareholders as the registered and beneficial owners of record, with good and marketable title thereto, free and clear of all mortgages, liens, charges, security interests, adverse claims, pledges, encumbrances, restrictions and demands whatsoever;
 
(e)            No person, corporation or other entity (other than the Purchaser) has any agreement, option or warrant or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, option or warrant for the purchase from the Shareholders of any of the Shares;
 
 
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(f)            None of the Shareholders or Ameri India is party to, bound or affected by or subject to any indenture, mortgage, lease, agreement, instrument, charter or by-law provision, statute, regulation, order, judgment, decree or law which would be violated, contravened or breached by, or under which any default would occur as a result of the consummation of the transactions provided for herein; and
 
(g)            This Agreement has been duly authorized, executed and delivered by the Shareholders and constitutes a legal, valid, binding and enforceable obligation of the Shareholders.
 
2.2             By Purchaser .  Purchaser represents and warrants as follows and acknowledges that the Shareholders are relying upon such representations and warranties in connection with the sale by the Shareholders of the Shares:
 
(a)            Purchaser is a corporation duly incorporated and validly existing under the laws of State of Delaware;
 
(b)            Purchaser has full power and authority to consummate the terms and provisions of this Agreement;
 
(c)            Purchaser is not a party to, bound or affected by or subject to any indenture, mortgage, lease, agreement, instrument, charter or by-law provision, statute, regulation, order, judgment, decree or law which would be violated, contravened or breached by, or under which any default would occur as a result of the consummation of the transactions provided for herein;
 
(d)            Purchaser is purchasing the Shares for investment purposes and not with a view to distribution in violation of any applicable securities law; and
 
(e)            This Agreement has been duly authorized, executed and delivered by Purchaser and constitutes a legal, valid, binding and enforceable obligation of Purchaser.
 
 
3.
Survival of Representations and Warranties
 
3.1             The Shareholders .  The representations and warranties of the Shareholders contained in this Agreement, or any agreement, certificate or other document delivered or given pursuant to this Agreement, shall survive the completion of the transactions contemplated by this Agreement and, notwithstanding such completion or any investigation made by or on behalf of Purchaser, shall continue in full force and effect for the benefit of Purchaser and any claim in respect thereof shall be made in writing for a period of three years after the Final Closing Date.
 
 
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3.2             Purchaser .  The representations and warranties of Purchaser contained in this Agreement, or any agreement, certificate or other document delivered or given pursuant to this Agreement, shall survive the completion of the transactions contemplated by this Agreement and, notwithstanding such completion or any investigation made by or on behalf of the Shareholders, shall continue in full force and effect for the benefit of the Shareholders and any claim in respect thereof shall be made in writing:
 
(a)            with respect to representations and warranties of Purchaser, relating to matters other than tax matters, for a period of three years after the Final Closing Date; and
 
(b)            with respect to representations and warranties of Purchaser, relating to tax liability or other tax matters, within the period commencing on the Initial Closing Date and expiring on the date on which the last applicable limitation period under any applicable taxation legislation expires with respect to any fiscal year of Ameri India which is relevant in determining any relevant tax liability of Ameri India.
 
 
4.
Transfer
 
This Agreement shall operate as an immediate and effective transfer and assignment of the Initial Shares and the Remaining Shares by the Shareholders to Purchaser as at the Initial Closing Date and Final Closing Date, respectively.  The parties agree to do all such other acts and things as may be necessary to give effect to the provisions hereof, and without limiting the generality of the foregoing, to validly and effectively transfer of the Initial Shares and the Remaining Shares from the Shareholders to Purchaser as at the Initial Closing Date and Final Closing Date, respectively.  The Shareholders hereby irrevocably constitutes and appoints the Secretary of Ameri India as its attorney to transfer the Initial Shares and the Remaining Shares to Purchaser as at the Initial Closing Date and Final Closing Date, respectively, on the books of Ameri India, with full power of substitution in the premises.
 
 
5.
Additional Covenants
 
5.1            Each of Purchaser and the Shareholders covenants and agrees to take all such actions as are within such party’s power to control, and to use all reasonable efforts to cause other actions to be taken which are not within such party’s power to control, so as to ensure compliance with any conditions of Closing as set forth in this Agreement which are for the benefit of the other party.
 
5.2            Each of Purchaser and the Shareholders shall take or cause to be taken all necessary or desirable actions, steps and corporate proceedings to approve or authorize the transactions contemplated by this Agreement and the execution and delivery of this Agreement and other agreements and documents contemplated hereby and shall cause all necessary meetings of directors and stockholders of Ameri India to be held for such purpose.
 
 
6.
Conditions
 
6.1             Conditions to the Obligation of the Shareholders .  The obligation of the Shareholders to complete the transactions contemplated herein is subject to the satisfaction of, or compliance with, on or before the Initial Closing Date and the Final Closing Date, as applicable, each of the following conditions (each of which is acknowledged to be for the exclusive benefit of the Shareholders and may be waived by them in whole or in part):
 
 
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(a)            the representations and warranties of Purchaser contained herein shall be true and correct as at the Initial Closing Date and Final Closing Date, as applicable;
 
(b)            Purchaser shall have performed all of its obligations under this Agreement to be performed by it on or prior to the Initial Closing Date and Final Closing Date, as applicable, and Purchaser shall not be in breach of any agreement on its part contained in this Agreement; and
 
(c)            all documents relating to the due authorization and completion of the transactions contemplated hereby and all actions and proceedings taken on or prior to the Initial Closing Date and Final Closing Date, as applicable, in connection with the performance by the Purchaser of its obligations under this Agreement shall be satisfactory to the Shareholders and their counsel and the Shareholders shall have received copies of all such documents or other evidence as it may reasonably request in form and substance satisfactory to the Shareholders and their counsel.
 
If any of the conditions contained in Section 6.1 hereof shall not be fulfilled or performed at or before the Initial Closing Date and Final Closing Date, as applicable, to the reasonable satisfaction of the Shareholders, the Shareholders may, by written notice to Purchaser, terminate all their obligations hereunder.
 
6.2             Conditions to the Obligation of Purchaser .  The obligation of Purchaser to complete the transactions contemplated hereunder is subject to the satisfaction of, or compliance with, on or before the Initial Closing Date and Final Closing Date, as applicable, each of the following conditions (each of which is acknowledged to be for the exclusive benefit of Purchaser and may be waived by it in whole or in part):
 
(a)            the representations and warranties of the Shareholders contained herein shall be true and correct as at the Initial Closing Date and Final Closing Date, as applicable;
 
(b)            the Shareholders shall have performed all their obligations under this Agreement to be performed by them on or prior to the Initial Closing Date and Final Closing Date, as applicable, and the Shareholders shall not be in breach of any agreement on their part contained in this Agreement;
 
(c)            the Shareholders and Ameri India shall have obtained all governmental, regulatory or third party consents and approvals, including from the Reserve Bank of India and all other applicable national and state governmental and regulatory agencies of India and pursuant to India’s Foreign Exchange Management Act, necessary for the sale of the Initial Shares and Remaining Shares to be transferred to Purchaser at the Initial Closing Date and Final Closing Date, respectively; and
 
(d)            all documents relating to the due authorization and completion of the transactions contemplated hereby and all actions and proceedings taken on or prior to the Initial Closing Date and Final Closing Date, as applicable, in connection with the performance by the Shareholders of their obligations under this Agreement shall be satisfactory to Purchaser and its counsel and Purchaser shall have received copies of all such documents or other evidence as it may reasonably request in form and substance satisfactory to Purchaser and its counsel.
 
 
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If any of the conditions contained in Section 6.2 hereof shall not be fulfilled or performed on or before the Initial Closing Date and Final Closing Date, as applicable, to the reasonable satisfaction of Purchaser, Purchaser may, by written notice to the Shareholders, terminate all its obligations hereunder.
 
 
7.
Termination
 
This Agreement may be terminated at any time prior to the Initial Closing Date referred to in Section 1.1(b) hereof by Purchaser.  In the event of such termination, neither party shall have any liability of any kind to the other party.
 
 
8.
Indemnification
 
8.1            Purchaser agrees to indemnify and hold harmless the Shareholders from any loss, claim, cost, damage, expense or liability which the Shareholders may suffer or incur, whether at law or equity, arising out of or resulting from, under or pursuant to the inaccuracy of any representation or warranty contained herein for the time periods provided in Section 2.1 hereof.
 
8.2            No claim for indemnification will arise until notice thereof is given to Purchaser.  Such notice shall be sent within a reasonable time following the determination by the Shareholders that a claim for indemnity exists.  In the event that any legal proceedings shall be instituted or any claim or demand is asserted by any third party in respect of which Purchaser may have an obligation to indemnify the Shareholders, the Shareholders shall give or cause to be given to Purchaser written notice thereof and such party shall have the right, at its option and expense, to be present at the defense of such proceedings, claim or demand, but not to control the defense, negotiation or settlement thereof, which control shall at all times rest with the Shareholders, unless Purchaser irrevocably acknowledges full and complete responsibility for indemnification of the Shareholders, in which case Purchaser may assume such control through counsel of his choice, provided however, that no settlement shall be entered into without the Shareholders’s prior written consent (which shall not be unreasonably withheld). The parties agree to cooperate fully with each other in connection with the defense, negotiation or settlement of any such third party legal proceeding, claim or demand.
 
8.3            Notwithstanding anything in this Agreement to the contrary, the indemnity provided for in this Section 8 shall apply to any loss, claim, cost, damage, expense or liability, whether or not the actual amount thereof shall have been ascertained prior to the final day upon which a claim for indemnity with respect thereto may be made hereunder, so long as written notice thereof shall have been given to Purchaser prior to said date, setting forth specifically and in reasonable detail, so far as is known, the matter as to which indemnification is being sought, but nothing herein shall be construed to require payment of any claim for indemnity until the actual amount payable shall have been finally ascertained.
 
 
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9.
Governing Law
 
This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
 
 
10.
Entire Agreement
 
This Agreement, together with the exhibit hereto, constitutes the entire agreement between the parties relating to the subject matter hereof.  There are no verbal statements, representations, warranties, undertakings or agreements between the parties.  This agreement may be amended only by an instrument in writing signed by the parties.
 
 
11.
Time of the Essence
 
Time shall be of the essence of this Agreement.
 
 
12.
Assignment
 
This Agreement and any rights or obligations hereunder may not be assigned by either party except with the prior written consent of the other party which consent may be unreasonably withheld.
 
 
13.
Binding Effect
 
This Agreement shall inure to the benefit of and be binding upon the parties and their respective heirs, legal representatives, successors and permitted assigns.
 
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
 

SPATIALIZER AUDIO LABORATORIES, INC.
 
 
By:
/s/ Kyle Hartley
 
Name:
Kyle Hartley
 
Title:
Chairman, President, Chief Executive Officer and Chief Financial Officer
 
 
SHAREHOLDERS OF
AMERI CONSULTING SERVICE
PRIVATE LIMITED
 
 
/s/ Giri Devanur
 
/s/ Srinidhi Devanur
Giri Devanur
 
Srinidhi Devanur
 
 
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Exhibit 10.4
 
AMERI HOLDINGS, INC.
100 Menlo Park Drive
Edison, New Jersey 08837
 
May 26, 2015
 
Mr. Giri Devanur
100 Menlo Park Drive
Edison, New Jersey 08837
 
Dear Giri:
 
This letter will confirm the terms of your employment by AMERI Holdings, Inc. (formerly Spatializer Audio Laboratories, Inc.), a Delaware corporation (the “Company”).  This employment letter is being entered into by us contemporaneously with the execution of the Agreement of Merger and Plan of Reorganization, dated as of the date hereof, among the Company, Ameri100 Acquisition, Inc. and Ameri and Partners Inc. (the “Merger Agreement”).
 
1.
TITLE
 
You shall be employed by the Company as its President and Chief Executive Officer.
 
2.
SALARY
 
Your salary shall be $120,000 per year, payable in bi-weekly installments.  Your bonus will be $50,000 per year, at the discretion of the Company’s Board of Directors.
 
3.
TERM
 
The term of your employment shall be three (3) years, beginning immediately following the Closing (as defined in the Merger Agreement).
 
4.
EQUITY INCENTIVE AWARD PLAN
 
The Company has established the 2015 Equity Incentive Award Plan in which you will be eligible to participate.  The number of stock options or other securities awarded to you, if any, and the terms thereof will be determined by the Company’s Board of Directors (or Compensation Committee, when established).
 
5.
TERMINATION
 
If, during the term of your employment, (a) you are terminated by the Company other than for “Cause” (as defined below), or (b) you resign for “Good Reason” (as defined below), then you will continue to receive for a period of one year following such termination your then current salary payable on the same basis as you were then being paid.
 
 
 

 
 
“Cause” means:
 
(i)            deliberate refusal or deliberate failure to carry out any reasonable order, consistent with your position, of the Board of Directors of the Company after reasonable written notice from such persons; (ii) a material and willful breach of this employment letter, the Confidentiality and Non-Competition Agreement referenced below or similar agreements with the Company or any of its subsidiaries; (iii) gross negligence or willful misconduct in the execution of the your assigned duties as an employee; (iv) engaging in repeated intemperate use of alcohol or drugs; or (v) conviction of a felony or other serious crime.
 
“Good Reason” means:
 
(i)            you shall have been assigned duties materially inconsistent with your position; (ii) your salary is reduced more than 15% below its then current level; or (iii) material benefits and compensation plans then currently in existence are not continued in effect for your benefit.
 
You will not be terminated by the Company for any reason except upon thirty (30) days prior written notice.
 
6.
RESPONSIBILITIES
 
Your responsibilities and duties shall be those ordinarily possessed by the President and Chief Executive Officer of a publicly-traded company.
 
7.
CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
 
You will be required to execute the Company’s standard form of Confidentiality and Non-Competition Agreement, a copy of which is included with this letter.  Such Confidentiality and Non-Competition Agreement, which is hereby incorporated into this letter agreement as if set forth herein in its entirety, forms part of the consideration given by you for the Company entering into this employment letter with you.
 
8.
GOVERNING LAW
 
This agreement shall be governed by and construed in accordance with the laws of the State of New York, U.S.A., as applied to agreements whose only parties are residents of such state and which are to be performed entirely within such state.
 
 
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9.
COUNTERPARTS
 
This agreement may be executed in counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument.
 
 
Very truly yours,
   
 
AMERI HOLDINGS, INC.
 
 
   
 
By:
/s/ Srirangan “Ringo” Rajagopal
   
Name:
Srirangan “Ringo” Rajagopal
   
Title:
Executive Vice President – Client Relations


ACCEPTED AND AGREED:


/s/ Giri Devanur
Giri Devanur

 
3

 
Exhibit 10.5
 
AMERI HOLDINGS, INC.
100 Menlo Park Drive
Edison, New Jersey 08837
May 26, 2015
 
Mr. Srinidhi “Dev” Devanur
100 Menlo Park Drive
Edison, New Jersey 08837
 
Dear Srinidhi:
 
This letter will confirm the terms of your employment by AMERI Holdings, Inc. (formerly Spatializer Audio Laboratories, Inc.), a Delaware corporation (the “Company”).  This employment letter is being entered into by us contemporaneously with the execution of the Agreement of Merger and Plan of Reorganization, dated as of the date hereof, among the Company, Ameri100 Acquisition, Inc. and Ameri and Partners Inc. (the “Merger Agreement”).
 
1.
TITLE
 
You shall be employed by the Company as its Executive Vice Chairman of the Board.
 
2.
SALARY
 
Your salary shall be $120,000 per year, payable in bi-weekly installments.  Your bonus will be $50,000 per year, at the discretion of the Company’s Board of Directors.
 
3.
TERM
 
The term of your employment shall be three (3) years, beginning immediately following the Closing (as defined in the Merger Agreement).
 
4.
EQUITY INCENTIVE AWARD PLAN
 
The Company has established the 2015 Equity Incentive Award Plan in which you will be eligible to participate.  The number of stock options or other securities awarded to you, if any, and the terms thereof will be determined by the Company’s Board of Directors (or Compensation Committee, when established).
 
5.
TERMINATION
 
If, during the term of your employment, (a) you are terminated by the Company other than for “Cause” (as defined below), or (b) you resign for “Good Reason” (as defined below), then you will continue to receive for a period of one year following such termination your then current salary payable on the same basis as you were then being paid.
 
“Cause” means:
 
 
 

 
 
(i)            deliberate refusal or deliberate failure to carry out any reasonable order, consistent with your position, of the Board of Directors of the Company after reasonable written notice from such persons; (ii) a material and willful breach of this employment letter, the Confidentiality and Non-Competition Agreement referenced below or similar agreements with the Company or any of its subsidiaries; (iii) gross negligence or willful misconduct in the execution of the your assigned duties as an employee; (iv) engaging in repeated intemperate use of alcohol or drugs; or (v) conviction of a felony or other serious crime.
 
“Good Reason” means:
 
(i)            you shall have been assigned duties materially inconsistent with your position; (ii) your salary is reduced more than 15% below its then current level; or (iii) material benefits and compensation plans then currently in existence are not continued in effect for your benefit.
 
You will not be terminated by the Company for any reason except upon thirty (30) days prior written notice.
 
6.
RESPONSIBILITIES
 
Your responsibilities and duties shall be those ordinarily possessed by the Executive Vice Chairman of the Board of a publicly-traded company.
 
7.
CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
 
You will be required to execute the Company’s standard form of Confidentiality and Non-Competition Agreement, a copy of which is included with this letter.  Such Confidentiality and Non-Competition Agreement, which is hereby incorporated into this letter agreement as if set forth herein in its entirety, forms part of the consideration given by you for the Company entering into this employment letter with you.
 
8.
GOVERNING LAW
 
This agreement shall be governed by and construed in accordance with the laws of the State of New York, U.S.A., as applied to agreements whose only parties are residents of such state and which are to be performed entirely within such state.
 
 
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9.
COUNTERPARTS
 
This agreement may be executed in counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument.
 
Very truly yours,
 
AMERI HOLDINGS, INC.
 
 
By:
/s/ Giri Devanur
 
Name:
Giri Devanur
 
Title:
President and Chief Executive Officer


ACCEPTED AND AGREED:


/s/ Srinidhi “Dev” Devanur
Srinidhi “Dev” Devanur

 
 
3

 
Exhibit 10.6
 
INDEMNIFICATION AGREEMENT
 
THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of June 8, 2015, by and between AMERI Holdings, Inc., a Delaware corporation (the “Company”), and ______________________ (the “Indemnitee”).

RECITALS:
 
WHEREAS , the Board of Directors of the Company (the “Board of Directors”) has reviewed and analyzed the protection from liability available to Directors and Officers of the Company and its subsidiaries under the Company’s existing corporate documents, applicable law and liability insurance;

WHEREAS , the Board of Directors has determined that the risks of litigation and possible liability for Directors and Officers arising out of the performance of their duties have substantially increased, and that the protection offered by the Company’s existing corporate documents, applicable law, and liability insurance is not sufficient to fully protect Directors and Officers from liability;

WHEREAS , the Board of Directors has determined that highly competent persons will be difficult to attract and retain as Directors and/or Officers unless they are adequately protected against liabilities incurred in performance of their duties in such capacity;

WHEREAS , the Board of Directors has determined that the use of indemnification agreements will allow the Company to offer some protection from liability to its Directors and Officers;

WHEREAS , the Indemnitee is a Director and/or Officer of the Company;
 
WHEREAS , Article NINTH of the Company’s Certificate of Incorporation provides for indemnification of Directors and Officers acting on behalf of the Company; and

WHEREAS , Section 145 of the Delaware General Corporation Law (the “Statute”) specifically provides that the indemnification provided by the Statute is not exclusive.

NOW THEREFORE, in consideration of the Indemnitee’s past and continued services to the Company, the mutual agreements and covenants contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
 
 
 

 
 
1.            Indemnification .  The Company agree to indemnify the Indemnitee to the fullest extent now or hereafter permitted by applicable law (including, without limitation, the indemnification permitted by the Statute) in the event that the Indemnitee was or is made or is threatened to be made a party to or a witness in any threatened, pending or completed action, suit, proceeding or appeal, whether civil, criminal, administrative or investigative, by reason of the fact that the Indemnitee was or is a Director and/or Officer of the Company or any of its subsidiaries, both as to action in his official capacity and as to action in another capacity while holding such directorship or office, where he acts or acted in that capacity at the Company’s request, against all reasonable expenses (including attorneys’ fees and disbursements), judgments, fines (including excise taxes and penalties) and amounts paid in settlement actually and reasonably incurred by the Indemnitee in connection with such action, suit, proceeding or appeal.  This Agreement is intended to cover all actions, suits, proceedings and appeals arising out of or connected with the Indemnitee’s service as a Director and/or Officer which are currently pending or threatened or which arise in the future, even if the Indemnitee is no longer a Director and/or Officer when such action, suit, proceeding or appeal arises or is threatened.
 
2.            Advance Payment of Expenses .  Expenses incurred by the Indemnitee in connection with any action, suit, proceeding or appeal, as described herein, shall be paid by the Company in advance of the final disposition of such action, suit, proceeding or appeal within thirty (30) days of Company’s receipt of any invoice for reasonable and actual expenses incurred by Indemnitee; provided however , Indemnitee has within ten (10) days after the Company’s request, executed a written agreement satisfactory to the Company’s counsel to repay all such amounts it if is ultimately determined that he is not entitled to be indemnified by the Company under applicable law. Notwithstanding the foregoing, the Company shall not be required to advance expenses for the defense of Indemnitee for any cause of action that relate to activities that the Company in its good faith determines are outside the scope of the duties required of Indemnitee under this Agreement, including without limitation, causes of action such as sexual harassment, personal torts and the like.
 
3.            Changes in the Law; Partial Indemnification .
 
(a)           In the event of any changes after the date of this Agreement in any applicable law, statute or rule (including judicial interpretation thereof) which expand the right of the Company to indemnify its Directors and Officers, the Indemnitee’s rights and the Company’s obligations under this Agreement shall be expanded to include such changes in applicable law, statute or rule. In the event of any changes in any applicable law, statute or rule (including judicial interpretation thereof) which narrow the right of the Company to indemnify its Directors and Officers, such changes, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties’ rights and obligations hereunder.
 
(b)           The indemnification provided by this Agreement shall not be deemed exclusive of any rights to which the Indemnitee may be entitled under the Company’s Certificate of Incorporation, its By-laws, any agreement, any vote of shareholders or Directors, applicable law or otherwise, both as to action in the Indemnitee’s official capacity and as to action in another capacity while holding such directorship or office, where he acts or acted in that capacity at the Company’s request.
 
 
2

 
 
(c)           If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the expenses, judgments, fines or penalties actually or reasonable incurred by the Indemnitee in the preparation, investigation defense, appeal or settlement of any civil or criminal action, suit, proceeding or appeal, but not, however, for the total amount thereof, the Company shall nevertheless indemnify the Indemnitee for the portion of such expenses, judgments, fines or penalties to which the Indemnitee is entitled.
 
4.            Contribution .  If the indemnification provided in Section 1 hereof may not be paid to the Indemnitee under applicable law, then in any threatened, pending or completed action, suit, proceeding or appeal in which the Company is jointly liable with the Indemnitee, the Company shall contribute to the amount of reasonable expenses (including attorneys’ fees and disbursements), judgments, fines (including expense taxes and penalties) and amounts paid in settlement actually and reasonably incurred and paid or payable by the Indemnitee in such proportion as is appropriate to reflect (a) the relative benefits received by the Company on the one hand and the Indemnitee on the other hand from the transaction from which such action, suit, proceeding or appeal arise, and (b) the relative fault of the Company on the one hand and of the Indemnitee on the other in connection with the events which resulted in such expenses, judgments, fines or settlement amounts, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of the Indemnitee on the other shall be determined by reference to, among other things, the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent the circumstances resulting in such expenses, judgments, fines or settlement amounts.  The Company agrees that it would not be just and equitable if contribution pursuant to this Section 4 were determined by pro rata allocation or any other method of allocation which does not take account of the foregoing equitable considerations.
 
5.            Exclusions .
 
(a)           The Company shall not be liable to make any payment hereunder (whether in the nature of indemnification or contribution) to the extent payment is actually made to the Indemnitee under an insurance policy (an “Insurance Policy”) or any other method outside of this Agreement. Before payment is reasonable expended to be made under an Insurance Policy or such other method, if the Indemnitee is required to pay any amount that the Company would otherwise be obligated to pay except for the exclusion in this subparagraph (a), the Company shall promptly advance the amount the Indemnitee is required to pay for which the Company is liable hereunder. In the event that the Company makes any advance to the Indemnitee under this subparagraph (a), the Indemnitee shall promptly execute an assignment, if a form satisfactory to the Company’s counsel, under which the funds the Indemnitee later receives under such Insurance Policy or such other method are assigned to the Company in an amount not to exceed the amount which the Company advanced pursuant to this subparagraph (a).
 
(b)           The Company shall not be liable hereunder for any amounts paid in settlement of a proceedings effected without its prior written consent, which shall not be unreasonably withheld.
 
 
3

 
 
6.            Term .  All obligations of the Company contained herein shall continue during the period the Indemnitee is a Director and/or Officer of the Company and shall continue thereafter (a) until both parties agree in writing to terminate this Agreement, or (b) as long as the Indemnitee remains subject to any possible claim or threatened, pending or completed action, suit, proceeding or appeal, whether civil, criminal, administrative or investigative, arising out of the Indemnitee’s service as a Director or Officer or in any other capacity in which he served at the Company’s request while a Director or Officer.
 
7.            Enforcement .  In the event the Indemnitee is required to bring any action to enforce rights or to collect funds due under this Agreement and is successful in such action, the Company shall reimburse the Indemnitee for all of the Indemnitee’s reasonable expenses (including attorneys’ fees and disbursements) in bringing and pursuing such action. The burden of proving that indemnification or advances are not reasonable shall be on the Company.
 
8.            Obligations of the Indemnitee .
 
(a)           Promptly after receipt by the Indemnitee of notice of the commencement of any action, suit, proceeding or appeal in which the Indemnitee is made or is threatened to be made a part or a witness, the Indemnitee shall notify the Company in writing of the commencement of such action, suit, proceeding or appeal, but the Indemnitee’s failure to notify the Company shall not relieve the Company from any obligation to indemnify or advance expenses to the Indemnitee under this Agreement, except to the extent such delay in providing notice has caused actual damages to the Company through prejudice to the Company’s rights or its ability to defend the action, suit, proceeding or appeal.
 
(b)           The Indemnitee shall reimburse the Company for all or an appropriate portion of the expenses advanced to the Indemnitee pursuant to Section 2 above if it is finally judicially adjudicated that the Indemnitee is not entitled to be indemnified, or not entitled to be fully indemnified because of indemnification in the particular circumstances is not permitted under applicable law.
 
(c)           The Indemnitee shall not settle any claim or action in any manner which would impose on the Company any penalty, constraint, or obligation to hold harmless or indemnify the Indemnitee pursuant to this Agreement without the Company’s prior written consent, which shall not be unreasonably withheld.
 
9.            Defense of Claim .
 
(a)           Except as otherwise provided below, in the case of any action, suit, proceeding or appeal commenced against the Indemnitee, the Company shall be entitled to participate therein at its own expense and, to the extent that it may wish, to assume the defense thereof.  If the Company wishes to assume the defense of any action, suit, proceeding or appeal hereunder, the Company must give written notice to the Indemnitee of such assumption of defense and of its choice of counsel.  Such choice of counsel must be approved in writing by the Indemnitee in his sole discretion, which will not be unreasonably withheld, before the Company’s assumption of defense hereunder may proceed.  After notice from the Company to Indemnitee of its election to assume the defense of any action, suit, proceeding or appeal and the Indemnitee’s approval of the Company’s choice of counsel, the Company shall not be obligated to the Indemnitee under this Agreement for any legal or other expenses subsequently incurred by the Indemnitee in connection with the defense thereof other than reasonable costs of investigation, travel and lodging expenses arising out of the Indemnitee’s participation in such action, suit, proceeding or appeal, except as otherwise provided herein. The Indemnitee shall have the right to employ the Indemnitee’s own counsel in such action, suit, proceeding or appeal, but the fees and expenses of such counsel incurred after notice from the Company to the Indemnitee of its assumption of the defense thereof shall be a the Indemnitee’s expense (i) unless the employment of such counsel has been requested by the Indemnitee and authorized in writing by the Company, or (ii) unless the Company shall have employed counsel to assume the defense of such action, suit, proceeding or appeal, in which case the reasonable fees and expenses of the Indemnitee’s counsel shall be at the expense of the Company, or (iii) unless counsel for the Indemnitee shall have provided a written opinion to Company in accordance with applicable standards of professional conduct that there may be a conflict of interest between the Company and the Indemnitee in the defense of such action, suit, proceeding or appeal; and (iv) except for reasonable costs and expenses for counsel for Indemnitee to monitor proceedings ( provided , however , that such counsel for will not appear as counsel of record in any such proceeding).
 
 
4

 
 
(b)           In the event that counsel for the Indemnitee concludes that there may be a conflict of interest between the Company and the Indemnitee in the defense of an action, suit, proceeding or appeal, (i) the Company shall not have the right to assume and direct the defense of such action, suit, proceeding or appeal on behalf of the Indemnitee, and (ii) the Company shall indemnify the Indemnitee for all reasonable legal fees and other reasonable expenses, but the Company shall not be liable for any settlement or negotiated disposition of such action, suit, proceeding or appeal or any part thereof effected without the written consent of the Company, which shall not be unreasonably withheld.
 
10.            Severability .  In any provision of this Company shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement.
 
11.            Notices .  Any notices or other communications required or desired hereunder shall be written and shall be given by (a) certified mail, return receipt requested, (b) overnight courier service, or (c) personal delivery. Such notice or communication shall be deemed to be given upon receipt or on the date of courier or personal delivery, as applicable, and shall be given to the Indemnitee at the address set forth on the signature line, and to the Company at the following addresses:
 
 
the Company:
AMERI Holdings, Inc.
 
100 Menlo Park Drive
 
Edison, New Jersey 08837
 
Attention:  Giri Devanur

or to such other address as either party may specify by written notice to the other party.
 
 
5

 

 
12.            Miscellaneous .
 
(a)           This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.
 
(b)           This Agreement shall be binding upon the Indemnitee, his heirs, personal representatives and permitted assigns, and upon the Company, its successors and assigns. This Agreement shall inure to the benefit of the Indemnitee, his heirs, personal representatives and permitted assigns, and to the benefit of the Company, its successors and assigns. No assignment of this Agreement or of any duty or obligation hereunder shall be made by the Indemnitee without the prior written consent of the Company, which shall not be unreasonably withheld.
 
(c)           This Agreement supersedes any other oral or written agreements between the Company and the Indemnitee which would restrict or lessen any of the rights granted to the Indemnitee hereunder.
 
(d)           No amendment, modification, termination or claimed waiver of any of the provisions hereof shall be valid unless in writing and signed by the party or an authorized representative of the party against whom such modification is sought to be enforced.
 
IN WITNESS WHEREOF , the parties hereto have executed this Indemnification Agreement as of the date first above written.
 

 
AMERI HOLDINGS, INC.
   
 
By:
 
   
Name:
 
   
Title:
 


 
INDEMNITEE:
   
   
 
Name:
 
 
Address:
 

 
6

 
Exhibit 10.7
 
[FORM OF OPTION GRANT LETTER]

AMERI HOLDINGS, INC.
100 Menlo Park Drive
Edison, NJ 08837

 

 
 
_________, 2015
 


To:           [NAME OF RECIPIENT]


We are pleased to inform you that on _________, 2015 the [Compensation Committee (the “Committee”) and the] Board of Directors (the “Board”) of AMERI Holdings, Inc. (the “Company”) granted you [(i) an incentive stock option (the “Incentive Option”), as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), to purchase _________ shares of the Company’s common stock, par value $0.01 per share, and (ii)] a non-qualified option ([the “Nonqualified Option” and together with the Incentive Option,] the “Options”) to purchase ______ shares of the Company’s common stock, each at a price of $______ per share and otherwise in accordance with the Company’s 2015 Equity Incentive Award Plan (the “Plan”).  The shares of Common Stock issuable upon exercise of the Options are referred to hereinafter as the “Stock.”

The Options will become exercisable [as follows: (i) the Incentive Option on or after _______, 2016; and (ii) the Nonqualified Option] on or after ________, 2016, and each such Option will expire on _________, 2021.

These Options are issued in accordance with and are subject to and conditioned upon all of the terms and conditions of the Plan (a copy of which in its present form is attached hereto), as from time to time amended, provided, however, that no future amendment or termination of the Plan shall, without your consent, alter or impair any of your rights or obligations under the Options.  Reference is made to the terms and conditions of the Plan, all of which are incorporated by reference in this option agreement as if fully set forth herein.
 
Notwithstanding any other provision in this option agreement or the Plan, no Option may be exercised unless and until the Stock to be issued upon the exercise of the Option has been registered under the Securities Act of 1933 (the “Securities Act”) and applicable state securities laws, or are, in the opinion of counsel to the Company, exempt from such registration in the United States.  The Company shall not be under any obligation to register the Stock, although the Company may in its sole discretion register the Stock at such time as the Company shall determine.  If the Company chooses to comply with an exemption from registration, the Stock may, at the direction of the [Committee and the] Board, bear an appropriate restrictive legend restricting the transfer or pledge of the Stock, and the [Committee and the] Board may also give appropriate stop transfer instructions with respect to the Stock to the Company’s transfer agent.
 
 
 

 
 
You understand and acknowledge that, under existing law, unless at the time of the exercise of these Options a registration statement under the Securities Act is in effect as to the Stock (i) any Stock purchased by you upon exercise of these Options may be required to be held indefinitely unless the Stock is subsequently registered under the Securities Act or an exemption from such registration is available; (ii) any sales of the Stock made in reliance upon Rule 144 promulgated under the Securities Act may be made only in accordance with the terms and conditions of that rule (which, under certain circumstances, restricts the number of shares which may be sold and the manner in which shares may be sold); (iii) in the case of securities to which Rule 144 is not applicable, some other exemption will be required; (iv) certificates for Stock to be issued to you hereunder shall bear a legend to the effect that the Stock has not been registered under the Securities Act and that the Stock may not be sold, hypothecated or otherwise transferred in the absence of an effective registration statement under the Securities Act relating thereto or an opinion of counsel satisfactory to the Company that such registration is not required; (v) the Company may place an appropriate “stop transfer” order with its transfer agent with respect to the Stock; and (vi) the Company has undertaken no obligation to register the Stock or to include the Stock in any registration statement which may be filed by it subsequent to the issuance of the Stock to you.  In addition, you understand and acknowledge that the Company has no obligation to you to furnish information necessary to enable you to make sales under Rule 144.
 
These Options (or installments thereof) are to be exercised by delivering to the Company a written notice of exercise in the form attached hereto as Exhibit A , specifying the number of shares of Stock to be purchased, together with payment of the purchase price of the Stock to be purchased.  The purchase price is to be paid in cash or, at the discretion of the [Committee and the] Board, by one of the other means provided in the Plan and referenced on Exhibit A .
 
 
Kindly evidence your acceptance of these Options and your agreement to comply with the provisions hereof and of the Plan by executing this option agreement under the words “Agreed To and Accepted.”
 
 
Very truly yours,
   
 
AMERI HOLDINGS, INC.
   
   
   
 
By:
 
   
Name:
 
   
Title:
 
       
AGREED TO AND ACCEPTED:
     
       
       
         
[NAME]
     

 
2

 
 
Exhibit A
 
AMERI HOLDINGS, INC.
100 Menlo Park Drive
Edison, NJ 08837

Ladies and Gentlemen:
 
Notice is hereby given of my election to purchase _____ shares of Common Stock, $0.01 par value (the “Stock”), of AMERI Holdings, Inc. (the “Company”), at a price of $_____ per share, pursuant to the provisions of the stock option granted to me on _________, 2015 under the Company’s 2015 Equity Incentive Award Plan.  Enclosed in payment for the Stock is:
 
    o  
my check in the amount of $________.
*
  o  
_________ shares of Stock having a total value of $____________, such value based on the Fair Market Value (as defined in the Plan) of the Stock.
*
  o  
the cancellation of ________ shares of Stock pursuant to the cashless exercise provision of the Plan having a total value of $____________, such value based on the Fair Market Value (as defined in the Plan) of the Stock.
*
  o  
a combination of the foregoing, as indicated above.
 
 
The following information is supplied for use in issuing and registering the Stock purchased hereby:
 
Number of Certificates
and Denominations
 
   
Name
 
   
Address
 
   
   
   
Social Security Number
 
 
 
Dated:
     
   
 
Very truly yours,
   
   
   
____________________
* Subject to the approval of the Committee or the Board.
 
 
3

 
Exhibit 10.8
 
SPATIALIZER AUDIO LABORATORIES, INC.
 
2015 Equity Incentive Award Plan
 
Article 1
Establishment and Purpose
 
1.1             Establishment of the Plan .  Spatializer Audio Laboratories, Inc., a Delaware corporation (the “Company”), hereby establishes an incentive compensation plan (the “Plan”), as set forth in this document.
 
1.2             Purpose of the Plan .  The purpose of the Plan is to promote the success and enhance the value of the Company by linking the personal interests of Participants to those of the Company’s stockholders, and by providing Participants with an incentive for outstanding performance.
 
1.3             Effective Date of the Plan .  The Plan is effective as of the date the Plan is approved by the Company’s stockholders (the “Effective Date”).  The Plan will be deemed to be approved by the stockholders if it receives the affirmative vote of the holders of a majority of the shares of stock of the Company present or represented and entitled to vote at a meeting duly held in accordance with the applicable provisions of the Company’s Amended and Restated By-laws.
 
Article 2
Definitions
 
Whenever used in the Plan, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized:
 
(a)            “Applicable Law” means the legal requirements relating to the administration of options and share-based or performance-based awards under any applicable laws of the United States, any other country, and any provincial, state, or local subdivision, any applicable stock exchange or automated quotation system rules or regulations, as such laws, rules, regulations and requirements shall be in place from time to time.
 
(b)            “Award” means, individually or collectively, a grant or award under this Plan of Stock Options, Stock Appreciation Rights, Restricted Stock (including unrestricted Stock), Restricted Stock Units, Performance Stock Units, Performance Shares, Deferred Stock Awards or Other Stock-Based Awards, Dividend Equivalents Awards and Performance Bonus Awards.
 
(c)            “Award Agreement” means an agreement which may be entered into by each Participant and the Company, setting forth the terms and provisions applicable to Awards granted to Participants under this Plan.  In the event of any inconsistency between the Plan and an Award Agreement, the terms of the Plan shall govern.
 
(d)            “Board” or “Board of Directors” means the Board of Directors of the Company.
 
 
 

 
 
(e)            “Cause” means willful and gross misconduct on the part of a Participant that is materially and demonstrably detrimental to the Company or any Subsidiary as determined by the Company in its sole discretion.
 
(f)            “Change in Control” shall be deemed to have occurred if (1) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities; or (2) during any period of two (2) consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company and any new Director whose election by the Board of Directors or nomination for election by the Company’s stockholders was approved by a vote of a majority of the Directors then still in office who either were Directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or (3) the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all the Company’s assets.
 
(g)            “Code” means the Internal Revenue Code of 1986, as amended from time to time.
 
(h)            “Committee” means the committee or committees of the Board of Directors given authority to administer the Plan as provided in Article 3.
 
(i)            “Consultant” means any consultant or adviser if:
 
(i)             The consultant or adviser renders bona fide services to the Company;
 
(ii)            The services rendered by the consultant or adviser are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company’s securities; and
 
(iii)           The consultant or adviser is a natural person who has contracted directly with the Company to render such services.
 
(j)            “Covered Employee” means an Employee who is, or could be, a “covered employee” within the meaning of Section 162(m) of the Code.
 
 
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(k)            “Deferred Stock” means a right to receive a specified number of shares of Stock during specified time periods pursuant to Article 9.
 
(l)            “Director” means any individual who is a member of the Board of Directors.  “Independent Director” means a member of the Board who is not an Employee of the Company.
 
(m)            “Disability” means absence of an Employee from work under the relevant Company or Subsidiary long term disability plan; provided, however, that to entitle a Participant to an extended exercise period for an Incentive Stock Option, or for accelerated vesting upon the occurrence of a disability, the Participant must be described in Section 22(m)(3) of the Code.
 
(n)            “Dividend Equivalents” means a right granted to a Participant pursuant to Article 9 to receive the equivalent value (in cash or Stock) of dividends paid on Stock.
 
(o)            “Employee” means any employee, as defined in accordance with Section 3401(c) of the Code, of the Company or of one of the Company’s Subsidiaries.  “Employment” means the employment of an Employee by the Company or one of its Subsidiaries.  Directors who are not otherwise employed by the Company shall not be considered Employees under this Plan.
 
(p)            “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor Act thereto.
 
(q)            “Exercise Price” means the price at which a Share may be purchased by a Participant pursuant to an Option, as determined by the Committee.
 
(r)            “Fair Market Value” means the closing price on the applicable tier of the NASDAQ Stock Market (“NASDAQ”) for a Share on the relevant date, or if such date was not a trading day, the immediately preceding trading date, all as determined by the Company.  A trading day is any day that the Shares are traded on NASDAQ.  In lieu of the foregoing, the Committee may, from time to time, select any other index or measurement to determine the Fair Market Value of Shares under the Plan, including but not limited to an average determined over a period of trading days, in a manner consistent with Section 409A of the Code for Awards subject to Section 409A of the Code, and in a manner consistent with Section 422 of the Code for Incentive Stock Options.
 
(s)            “Incentive Stock Option” means an Option that is intended to meet the requirements of Section 422 of the Code.
 
(t)            “Insider” means an Employee who is, on the relevant date, an officer, director, or ten percent (10%) beneficial owner of the Company, as those terms are defined under Section 16 of the Exchange Act.
 
(u)           “Non-Employee Director” means a member of the Board who qualifies as a “Non-Employee Director” as defined in Rule 16b-3(b)(3) of the Exchange Act, or any successor definition adopted by the Board.
 
 
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(v)           “Non-Qualified Stock Option” means an Option that is not intended to be an Incentive Stock Option.
 
(w)          “Option” means an option to purchase Shares from the Company.  An Option may be either an Incentive Stock Option or Non-Qualified Stock Option.
 
(x)            “Other Stock-Based Award” means an Award granted or denominated in Stock or units of Stock pursuant to Section 9.6 of the Plan.
 
(y)            “Participant” means an Employee or former Employee, a Consultant, or a member of the Board who holds an outstanding Award granted under the Plan.
 
(z)            “Performance-Based Award” means an Award granted to selected Covered Employees pursuant to Articles 7 and 9 (other than SARs awarded under Section 9.5), but which is subject to the terms and conditions set forth in Article 8.  All Performance-Based Awards are intended to qualify as Qualified Performance-Based Compensation.
 
(aa)          “Performance Criteria” means the criteria provided in Section 8.6.
 
(bb)         “Performance Period” means the one or more periods of time, which may be of varying and overlapping durations, as the Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to, and the payment of, a Performance-Based Award.
 
(cc)         “Performance Stock Unit” and “Performance Share” each mean an Award granted to an Employee pursuant to Article 9 herein.
 
(dd)         “Plan” means the Spatializer Audio Laboratories, Inc. 2015 Equity Award Incentive Plan, as it may be amended from time to time.
 
(ee)         “Qualified Performance-Based Compensation” means any compensation that is intended to qualify as “qualified performance-based compensation” as described in Section 162(m) of the Code.
 
(ff)           “Restricted Stock” means Stock awarded to a Participant pursuant to Article 7 that is subject to certain restrictions and may be subject to risk of forfeiture.
 
(gg)         “Restricted Stock Unit” means an Award granted pursuant to Section 7.9.
 
(hh)         “Shares” or “Stock” means the shares of common stock of the Company.
 
(ii)            “Stock Appreciation Right” or “SAR” means a right granted pursuant to Section 9.5 to receive a payment equal to the excess of the Fair Market Value of a specified number of shares of Stock on the date the SAR is exercised over the Fair Market Value on the date the SAR was granted as set forth in the applicable Award Agreement.
 
(jj)            “Subsidiary” means any corporation, partnership, venture or other entity in which the Company holds, directly or indirectly, a fifty percent (50%) or greater ownership interest, provided, however, that with respect to an Incentive Stock Option, a Subsidiary must be a corporation.  The Committee may, at its sole discretion, designate, on such terms and conditions as the Committee shall determine, any other corporation, partnership, limited liability company, venture, or other entity a Subsidiary for purposes of this Plan.
 
 
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(kk)          “Termination of Employment” or a similar reference means the event where the Employee is no longer an Employee of the Company or of any Subsidiary, including but not limited to where the employing company ceases to be a Subsidiary.  With respect to any Participant who is not an Employee, “Termination of Employment” shall mean cessation of the performance of services.  With respect to any Award that provides “non-qualified deferred compensation” within the meaning of Section 409A of the Code, “Termination of Employment” shall mean a “separation from service” as defined under Section 409A of the Code.
 
(ll)            “Treasury Regulation” or “Treas. Reg.” means any regulation promulgated under the Code, as such regulation may be amended from to time.
 
Article 3
Administration
 
3.1             The Committee .  The Plan shall be administered by the Compensation Committee of the Board.  The Committee shall consist of at least two individuals, each of whom qualifies as (a) a Non-Employee Director, (b) an “outside director” pursuant to Section 162(m) of the Code, and (c) an “independent director” under the listing requirements of NASDAQ, or any similar rule or listing requirement that may be applicable to the Company from time to time.  Reference to the Committee shall refer to the Board if the Compensation Committee ceases to exist and the Board does not appoint a successor Committee.
 
3.2             Authority of the Committee .  The Committee shall have complete control over the administration of the Plan and shall have the authority in its sole discretion to (a) exercise all of the powers granted to it under the Plan, (b) construe, interpret and implement the Plan, grant terms and grant notices, and all Award Agreements, (c) prescribe, amend and rescind rules and regulations relating to the Plan, including rules governing its own operations, (d) make all determinations necessary or advisable in administering the Plan, (e) correct any defect, supply any omission and reconcile any inconsistency in the Plan, (f) amend the Plan to reflect changes in applicable law (whether or not the rights of the holder of any Award are adversely affected, unless otherwise provided by the Committee), (g) grant Awards and determine who shall receive Awards, when such Awards shall be granted and the terms and conditions of such Awards, including, but not limited to, conditioning the exercise, vesting, payout or other term of condition of an Award on the achievement of Performance Goals (defined below), provided, however, that except as provided in Article 12 and upon death or Disability, the minimum vesting period for any Award shall be twelve (12) months, (h) unless otherwise provided by the Committee, amend any outstanding Award in any respect, not materially adverse to the Participant, including, without limitation, to (1) accelerate the time or times at which the Award becomes vested, unrestricted or may be exercised (and, in connection with such acceleration, the Committee may provide that any Shares acquired pursuant to such Award shall be Restricted Shares, which are subject to vesting, transfer, forfeiture or repayment provisions similar to those in the Participant’s underlying Award), provided, however, that except as provided in Article 12, and upon death or Disability, the minimum vesting period for any Award shall be twelve (12) months, (2) accelerate the time or times at which shares of Stock are delivered under the Award (and, without limitation on the Committee’s rights, in connection with such acceleration, the Committee may provide that any shares of Stock delivered pursuant to such Award shall be Restricted Shares, which are subject to vesting, transfer, forfeiture or repayment provisions similar to those in the Grantee’s underlying Award), or (3) waive or amend any goals, restrictions or conditions applicable to such Award, or impose new goals, restrictions and (i) determine at any time whether, to what extent and under what circumstances and method or methods (1) Awards may be (A) settled in cash, shares of Stock, other securities, other Awards or other property (in which event, the Committee may specify what other effects such settlement will have on the Participant’s Award), (B) exercised or (C) canceled, forfeited or suspended, (2) Shares, other securities, cash, other Awards or other property and other amounts payable with respect to an Award may be deferred either automatically or at the election of the Participant or of the Committee, or (3) Awards may be settled by the Company or any of its Subsidiaries or any of its or their designees.
 
 
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No Award may be made under the Plan after the tenth anniversary of the Effective Date.
 
All determinations and decisions made by the Company pursuant to the provisions of the Plan and all related orders or resolutions of the Committee shall be final, conclusive, and binding on all persons, including but not limited to the Company, its stockholders, Employees, Participants, and their estates and beneficiaries.
 
Article 4
 
Shares Subject to the Plan
 
4.1             Number of Shares .  Subject to adjustment as provided in Sections 4.2 and 4.3, the aggregate number of shares of Stock which may be issued or transferred pursuant to Awards under the Plan shall be 2,000,000 shares.  Notwithstanding the foregoing, in order that the applicable regulations under the Code relating to Incentive Stock Options be satisfied, the maximum number of shares of Stock that may be delivered upon exercise of Incentive Stock Options shall be 2,000,000, as adjusted under Sections 4.2 and 4.3.
 
4.2             Share Accounting .  Without limiting the discretion of the Committee under this section, the following rules will apply for purposes of the determination of the number of Shares available for grant under the Plan or compliance with the foregoing limits:
 
(a)            If an outstanding Award for any reason expires or is terminated or canceled without having been exercised or settled in full, or if Shares acquired pursuant to an Award subject to forfeiture are forfeited under the terms of the Plan or the relevant Award, the Shares allocable to the terminated portion of such Award or such forfeited Shares shall again be available for issuance under the Plan.
 
(b)           Shares shall not be deemed to have been issued pursuant to the Plan with respect to any portion of an Award that is settled in cash, other than an Option.
 
(c)            If the exercise price of an Option is paid by tender to the Company, or attestation to the ownership, of Shares owned by the Participant, or an Option is settled without the payment of the exercise price, or the payment of taxes with respect to any Award is settled by a net exercise, the number of shares available for issuance under the Plan shall be reduced by the gross number of shares for which the Option is exercised or other Awards that have vested.
 
 
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4.3             Adjustments in Authorized Plan Shares and Outstanding Awards .  In the event of any merger, reorganization, consolidation, recapitalization, separation, split-up, liquidation, Share combination, Stock split, Stock dividend, or other change in the corporate structure of the Company affecting the Shares, an adjustment shall be made in a manner consistent with Section 422 of the Code for Incentive Stock Options and in a manner consistent with Section 409A of the Code for Non-Qualified Stock Options and, for Qualified Performance-Based Compensation, in accordance with Section 162(m) of the Code in the number and class of Shares which may be delivered under the Plan (including but not limited to individual limits), and in the number and class of and/or price of Shares subject to outstanding Awards granted under the Plan, and/or the number of outstanding Options, Shares of Restricted Stock, and Performance Shares (and Restricted Stock Units, Performance Stock Units and other Awards whose value is based on a number of Shares) constituting outstanding Awards, as may be determined to be appropriate and equitable by the Committee, in its sole discretion, to prevent dilution or enlargement of rights.
 
4.4             Limitation on Number of Shares Subject to Awards.   Notwithstanding any provision in the Plan to the contrary, and subject to Section 4.3, the maximum number of shares of Stock with respect to one or more Awards that may be granted to any one Participant during each calendar year shall be 2,000,000 shares, provided that in no event shall any Participant receive one or more Awards of Restricted Stock or Other Stock-Based Awards in excess of 2,000,000 shares of Stock.
 
Article 5
Eligibility and Participation
 
5.1             General .  Persons eligible to participate in this Plan include Employees, Consultants and all members of the Board, as determined by the Committee.
 
5.2             Foreign Participants .  In order to assure the viability of Awards granted to Participants employed in foreign countries, the Committee may provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy, or custom.  Moreover, the Committee may approve such supplements to, or amendments, restatements, or alternative versions of, the Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the Plan as in effect for any other purpose; provided, however, that no such supplements, amendments, restatements, or alternative versions shall increase the share limitations contained in Section 4.1 of the Plan.
 
Article 6
Stock Options
 
6.1             Grant of Options .  Subject to the terms and provisions of the Plan, Options may be granted to eligible Employees at any time and from time to time, and under such terms and conditions, as shall be determined by the Committee; provided, however, that no Award of an Incentive Stock Option may be made pursuant to this Plan after the tenth (10 th ) anniversary of the Effective Date.  In addition, the Committee may, from time to time, provide for the payment of Dividend Equivalents on Options, prospectively and/or retroactively, on such terms and conditions as the Committee may require.  The Committee shall have discretion in determining the number of Shares subject to Options granted to each Employee, subject to the limitations set forth in Article 4.
 
 
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6.2             Form of Issuance .  Each Option grant may be issued in the form of an Award Agreement and/or may be recorded on the books and records of the Company for the account of the Participant.  If an Option is not issued in the form of an Award Agreement, then the Option shall be deemed granted as determined by the Committee.  The terms and conditions of an Option shall be set forth in the Award Agreement, in the notice of the issuance of the grant, or in such other documents as the Committee shall determine.  Such terms and conditions shall include the Exercise Price, the duration of the Option, the number of Shares to which an Option pertains (unless otherwise provided by the Committee, each Option may be exercised to purchase one Share), and such other provisions as the Committee shall determine.
 
6.3             Exercise Price .  Unless a greater Exercise Price is determined by the Committee, the Exercise Price for each Option awarded under this Plan shall be equal to one hundred percent (100%) of the Fair Market Value of a Share on the date the Option is granted.  Subject to adjustment as provided in Section 4.3 herein or as otherwise provided herein, the terms of an Option may not be amended to reduce the exercise price nor may Options be cancelled or exchanged for cash, other awards or Options with an exercise price that is less than the exercise price of the original Options.
 
In the case of an Incentive Stock Option granted to any individual who, at the date of grant, owns stock possessing more than ten percent (10%) of the total combined voting power all classes of stock of the Company, such Incentive Stock Option shall be granted at a price that is not less than one hundred ten percent (110%) of Fair Market Value on the date of grant and such Incentive Stock Option shall be exercisable for no more than five (5) years from the date of grant.
 
6.4             Duration of Options .  Each Option shall expire at such time as the Committee shall determine at the time of grant (which duration may be extended by the Committee); provided, however, that no Option shall be exercisable later than the tenth (10th) anniversary date of its grant.  In the event the Committee does not specify the expiration date of an Option, then such Option will expire on the tenth (10th) anniversary date of its grant, except as otherwise provided herein.
 
In the case of an Incentive Stock Option, such Incentive Stock Option may not be exercised to any extent by anyone after the first to occur of the following events:
 
(a)            The expiration date of the Incentive Stock Option.
 
(b)            One year after the date of the Participant’s Termination of Employment on account of Disability or death.  Upon the Participant’s Disability or death, any Incentive Stock Options exercisable at the Participant’s Disability or death may be exercised by the Participant’s legal representative or representatives, by the person or persons entitled to do so pursuant to the Participant’s last will and testament, or, if the Participant fails to make testamentary disposition of such Incentive Stock Option or dies intestate, by the person or persons entitled to receive the Incentive Stock Option pursuant to the applicable laws of descent and distribution.
 
 
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(c)            Three (3) months after the date of the Participant’s Termination of Employment for any reason other than Disability or death.  Whether a Participant continues to be an employee shall be determined in accordance with Treas. Reg. Section 1.421-1(h)(2).
 
6.5             Vesting of Options .  A grant of Options shall vest at such times and under such terms and conditions as determined by the Committee including, without limitation, suspension of a Participant’s vesting during all or a portion of a Participant’s leave of absence.  The Committee shall have the right to accelerate the vesting of any Option, provided, however, except as provided in Article 12 and upon death or Disability, the minimum vesting period for any Option shall be twelve (12) months; however, the Chairman of the Board, or his successors, or such other persons designated by the Committee, shall have the authority to accelerate the vesting of Options to the extent provided in this sentence, for any Participant who is not an Insider.
 
6.6             Exercise of Options .  Options granted under the Plan shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance approve, which need not be the same for each grant or for each Participant; provided, however, that during a Participant’s lifetime, an Incentive Stock Option may be exercised only by the Participant.  Exercises of Options may be effected only on days and during the hours NASDAQ is open for regular trading.  The Company may change or limit the times or days Options may be exercised.  If an Option expires on a day or at a time when exercises are not permitted, then the Options may be exercised no later than the immediately preceding date and time that the Options were exercisable.
 
An Option shall be exercised by providing notice to the designated agent selected by the Company (if no such agent has been designated, then to the Company), in the manner and form determined by the Company, which notice shall be irrevocable, setting forth the exact number of Shares with respect to which the Option is being exercised and including with such notice payment of the Exercise Price, as applicable.  When an Option has been transferred, the Company or its designated agent may require appropriate documentation that the person or persons exercising the Option, if other than the Participant, has the right to exercise the Option.  No Option may be exercised with respect to a fraction of a Share.
 
Additionally, the Participant shall give the Company prompt notice of any disposition of shares of Stock acquired by exercise of an Incentive Stock Option within (i) two years from the date of grant of such Incentive Stock Option or (ii) one year after the transfer of such shares of Stock to the Participant.
 
6.7             Individual Dollar Limitation .  The aggregate Fair Market Value (determined as of the time the Option is granted) of all shares of Stock with respect to which Incentive Stock Options are first exercisable by a Participant in any calendar year may not exceed $100,000 or such other limitation as imposed by Section 422(d) of the Code.  To the extent that Incentive Stock Options are first exercisable by a Participant in excess of such limitation, the excess shall be considered Non-Qualified Stock Options.
 
 
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6.8             Payment .  Unless otherwise determined by the Committee, the Exercise Price shall be paid in full at the time of exercise.  No Shares shall be issued or transferred until full payment has been received or the next business day thereafter, as determined by the Company.
 
The Committee may, from time to time, determine or modify the method or methods of exercising Options or the manner in which the Exercise Price is to be paid.  Unless otherwise provided by the Committee in full or in part:
 
(a)           Payment may be made in cash.
 
(b)           Payment may be made by delivery of Shares owned by the Participant in partial (if in partial payment, then together with cash) or full payment.
 
(c)           If the Company has designated a stockbroker to act as the Company’s agent to process Option exercises, an Option may be exercised by issuing an exercise notice together with instructions to such stockbroker irrevocably instructing the stockbroker: (i) to immediately sell (which shall include an exercise notice that becomes effective upon execution of a sale order) a sufficient portion of the Shares to be received from the Option exercise to pay the Exercise Price of the Options being exercised and the required tax withholding, and (ii) to deliver on the settlement date the portion of the proceeds of the sale equal to the Exercise Price and tax withholding to the Company.  In the event the stockbroker sells any Shares on behalf of a Participant, the stockbroker shall be acting solely as the agent of the Participant, and the Company disclaims any responsibility for the actions of the stockbroker in making any such sales.  However, if the Participant is an Insider, then the instruction to the stock broker to sell in the preceding sentence is intended to comply with the requirements of Rule 10b5-1(c)(1)(i)(B) of the Exchange Act to the extent permitted by law.  No Shares shall be issued until the settlement date and until the proceeds (equal to the Exercise Price and tax withholding) are paid to the Company.
 
(d)            At any time, the Committee may, in addition to or in lieu of the foregoing, provide that an Option may be “stock settled,” which shall mean upon exercise of an Option, the Company may fully satisfy its obligation under the Option by delivering that number of shares of Stock found by taking the difference between (i) the Fair Market Value of the Stock on the exercise date, multiplied by the number of Options being exercised and (ii) the total Exercise Price of the Options being exercised, and dividing such difference by the Fair Market Value of the Stock on the exercise date.
 
If payment is made by the delivery of Shares, the value of the Shares delivered shall be equal to the then most recent Fair Market Value of the Shares established before the exercise of the Option.
 
Restricted Stock may not be used to pay the Exercise Price.
 
Notwithstanding any other provision of the Plan to the contrary, no Participant who is a member of the Board or an “Executive Officer” of the Company shall be permitted to pay the Exercise Price of an Option in any method which would violate Section 13(h) of the Exchange Act.
 
 
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6.9             Termination of Employment .  Unless otherwise provided by the Committee, the following limitations on exercise of Options shall apply upon Termination of Employment:
 
(a)             Termination by Death or Disability .  In the event of the Participant’s Termination of Employment by reason of death or Disability, all outstanding Options granted to that Participant shall immediately vest as of the date of Termination of Employment and may be exercised, if at all, no more than five (5) years from the date of the Termination of Employment, unless the Options, by their terms, expire earlier.
 
(b)             Termination for Cause .  In the event of the Participant’s Termination of Employment by the Company for Cause, all outstanding Options held by the Participant shall immediately be forfeited to the Company and no additional exercise period shall be allowed, regardless of the vested status of the Options.
 
(c)             Other Termination of Employment .  In the event of the Participant’s Termination of Employment for any reason other than the reasons set forth in (a) or (b), above:
 
(i)             All outstanding Options which are vested as of the effective date of Termination of Employment may be exercised, if at all, no more than five (5) years from the date of Termination of Employment if the Participant is eligible to retire, or three (3) months from the date of the Termination of Employment if the Participant is not eligible to retire, as the case may be, unless in either case the Options, by their terms, expire earlier; and
 
(ii)            In the event of the death of the Participant after Termination of Employment, this paragraph (c) shall still apply and not paragraph (a), above.
 
(d)             Options not Vested at Termination .  Except as provided in paragraph (a)  above, all Options held by the Participant which are not vested on or before the effective date of Termination of Employment shall immediately be forfeited to the Company (and the Shares subject to such forfeited Options shall once again become available for issuance under the Plan).
 
(e)             Other Terms and Conditions .  Notwithstanding the foregoing, the Committee may, in its sole discretion, establish different, or waive, terms and conditions pertaining to the effect of Termination of Employment on Options, whether or not the Options are outstanding, but no such modification shall shorten the terms of Options issued prior to such modification or otherwise be materially adverse to the Participant.
 
6.10           Restrictions on Exercise and Transfer of Options .  Unless otherwise provided by the Committee:
 
(a)            During the Participant’s lifetime, the Participant’s Options shall be exercisable only by the Participant or by the Participant’s guardian or legal representative.  After the death of the Participant, except as otherwise provided by Article 10, an Option shall only be exercised by the holder thereof (including, but not limited to, an executor or administrator of a decedent’s estate) or his or her guardian or legal representative.
 
 
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(b)            No Option shall be transferable except: (i) in the case of the Participant, only upon the Participant’s death and in accordance with Article 10; and (ii) in the case of any holder after the Participant’s death, only by will or by the laws of descent and distribution; and (iii) pursuant to a domestic relations order.
 
Article 7
Restricted Stock
 
7.1             Grant of Restricted Stock .  Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Shares of Restricted Stock to eligible Employees in such amounts, subject to the limitations in Article 4, and upon such terms and conditions as the Committee shall determine.  In addition to any other terms and conditions imposed by the Committee, vesting of Restricted Stock may be conditioned upon the achievement of Performance Goals in the same manner as provided in Section 8.6, herein, with respect to Performance-Based Awards.
 
7.2             Restricted Stock Agreement .  The Committee may require, as a condition to receiving a Restricted Stock Award, that the Participant enter into a Restricted Stock Award Agreement, setting forth the terms and conditions of the Award.  In lieu of a Restricted Stock Award Agreement, the Committee may provide the terms and conditions of an Award in a notice to the Participant of the Award, on the Stock certificate representing the Restricted Stock, in the resolution approving the Award, or in such other manner as it deems appropriate.
 
7.3             Transferability .  Except as otherwise provided in this Article 7, and subject to any additional terms in the grant thereof, Shares of Restricted Stock granted herein may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until fully vested.
 
7.4             Restrictions .  The Restricted Stock shall be subject to such vesting terms, including the achievement of Performance Goals (as described in Section 8.6), as may be determined by the Committee in accordance with Section 3.2.  Unless otherwise provided by the Committee, to the extent Restricted Stock is subject to any condition to vesting, if such condition or conditions are not satisfied by the time the period for achieving such condition has expired, such Restricted Stock shall be forfeited.  The Committee may impose such other conditions and/or restrictions on any Shares of Restricted Stock granted pursuant to the Plan as it may deem advisable including but not limited to a requirement that Participants pay a stipulated purchase price for each Share of Restricted Stock and/or restrictions under applicable Federal or state securities laws; and may legend the certificates representing Restricted Stock to give appropriate notice of such restrictions.  The Committee may also grant Restricted Stock without any terms or conditions in the form of vested Stock Awards.
 
The Company shall also have the right to retain the certificates representing Shares of Restricted Stock in the Company’s possession until such time as the Shares are fully vested and all conditions and/or restrictions applicable to such Shares have been satisfied.
 
7.5             Removal of Restrictions .  Except as otherwise provided in this Article 7 or otherwise provided in the grant thereof, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan shall become freely transferable by the Participant after completion of all conditions to vesting, if any.  However, the Committee, in its sole discretion, but subject to Section 3.2, shall have the right to immediately vest the shares and waive all or part of the restrictions and conditions with regard to all or part of the Shares held by any Participant at any time.
 
 
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7.6             Voting Rights, Dividends and Other Distributions .  Participants holding Shares of Restricted Stock granted hereunder may exercise full voting rights and shall receive all dividends and distributions paid with respect to such Shares.  The Committee may require that dividends and other distributions, other than regular cash dividends, paid to Participants with respect to Shares of Restricted Stock be subject to the same restrictions and conditions as the Shares of Restricted Stock with respect to which they were paid.  If any such dividends or distributions are paid in Shares, the Shares shall automatically be subject to the same restrictions and conditions as the Shares of Restricted Stock with respect to which they were paid.
 
7.7             Termination of Employment Due to Death or Disability .  In the event of the Participant’s Termination of Employment by reason of death or Disability, unless otherwise determined by the Committee, all restrictions imposed on outstanding Shares of Restricted Stock held by the Participant shall immediately lapse and the Restricted Stock shall immediately become fully vested as of the date of Termination of Employment.
 
7.8             Termination of Employment for Other Reasons .  Unless otherwise provided by the Committee in accordance with Section 3.2, in the event of the Participant’s Termination of Employment for any reason other than those specifically set forth in Section 7.7 herein, all Shares of Restricted Stock held by the Participant which are not vested as of the effective date of Termination of Employment immediately shall be forfeited and returned to the Company.
 
7.9             Restricted Stock Units .  In lieu of or in addition to Restricted Stock, the Committee may grant Restricted Stock Units under such terms and conditions as shall be determined by the Committee in accordance with Section 3.2.  Restricted Stock Units shall be subject to the same terms and conditions under this Plan as Restricted Stock except as otherwise provided in this Plan or as otherwise provided by the Committee.  Except as otherwise provided by the Committee, the award shall be settled and paid out promptly upon vesting (to the extent permitted by Section 409A of the Code), and the Participant holding such Restricted Stock Units shall receive, as determined by the Committee, Shares (or cash equal to the Fair Market Value of the number of Shares as of the date the Award becomes payable) equal to the number of such Restricted Stock Units.  Restricted Stock Units shall not be transferable, shall have no voting rights, and shall not receive dividends, but shall, unless otherwise provided by the Committee, receive Dividend Equivalents at the time and at the same rate as dividends are paid on Shares with the same record and pay dates.  Upon a Participant’s Termination of Employment due to death or Disability, the Committee will determine whether there should be any acceleration of vesting.
 
Article 8
Performance-Based Awards
 
8.1             Purpose .  The purpose of this Article 8 is to provide the Committee the ability to qualify Awards other than Options and SARs and that are granted pursuant to Articles 7 and 9 (other than SARs awarded under Section 9.5) as Qualified Performance-Based Compensation.  If the Committee, in its discretion, decides to grant a Performance-Based Award to a Covered Employee, the provisions of this Article 8 shall control over any contrary provision contained in Articles 7 or 9; provided, however, that the Committee may in its discretion grant Awards to Covered Employees that are based on Performance Criteria or Performance Goals but that do not satisfy the requirements of this Article 8.
 
 
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8.2             Applicability .  This Article 8 shall apply only to those Covered Employees selected by the Committee to receive Performance-Based Awards.  The designation of a Covered Employee as a Participant for a Performance Period shall not in any manner entitle the Participant to receive an Award for the period.  Moreover, designation of a Covered Employee as a Participant for a particular Performance Period shall not require designation of such Covered Employee as a Participant in any subsequent Performance Period and designation of one Covered Employee as a Participant shall not require designation of any other Covered Employees as a Participant in such period or in any other period.
 
8.3             Procedures with Respect to Performance-Based Awards .  To the extent necessary to comply with the Qualified Performance-Based Compensation requirements of Section 162(m) of the Code, with respect to any Award granted under Articles 7 and 9 which may be granted to one or more Covered Employees, no later than ninety (90) days following the commencement of any fiscal year in question or any other designated fiscal period or period of service, and not later than after twenty-five percent (25%) of such period has elapsed (or such other time as may be required or permitted by Section 162(m) of the Code), the Committee shall, in writing, (a) designate one or more Covered Employees, (b) select the Performance Criteria applicable to the Performance Period, (c) establish the Performance Goals, and amounts of such Awards, as applicable, which may be earned for such Performance Period, and (d) specify the relationship between Performance Criteria and the Performance Goals and the amounts of such Awards, as applicable, to be earned by each Covered Employee for such Performance Period.  Following the completion of each Performance Period, the Committee shall certify in writing whether the applicable Performance Goals have been achieved for such Performance Period.  In determining the amount earned by a Covered Employee, the Committee shall have the right to reduce or eliminate (but not to increase) the amount payable at a given level of performance to take into account additional factors that the Committee may deem relevant to the assessment of individual or corporate performance for the Performance Period.
 
8.4             Payment of Performance-Based Awards .  Unless otherwise provided in the applicable Award Agreement, a Participant must be employed by the Company or a Subsidiary on the day a Performance-Based Award for such Performance Period is paid to the Participant.  Furthermore, a Participant shall be eligible to receive payment pursuant to a Performance-Based Award for a Performance Period only if the Performance Goals for such period are achieved.
 
8.5             Performance Period .  The Performance Period is set by the Committee for each Award.
 
8.6             Performance Goals .  For each Performance-Based Award, the Committee shall establish (and may establish for other Awards) performance objectives (“Performance Goals”) for the Company, its Subsidiaries, and/or divisions of any of foregoing, using the Performance Criteria and other factors set forth in (a) and (b), below.  It may also use other criteria or factors in establishing Performance Goals in addition to or in lieu of the foregoing.  A Performance Goal may be stated as an absolute value or as a value determined relative to an index, budget, prior period, similar measures of a peer group of other companies or other standard selected by the Committee.  Performance Goals shall include payout tables, formulas or other standards to be used in determining the extent to which the Performance Goals are met, and, if met, the number of Performance Shares and/or Performance Stock Units which would be converted into Stock and/or cash (or the rate of such conversion) and distributed to Participants in accordance with Section 8.6.  Unless previously canceled or reduced, Performance Shares and Performance Stock Units which may not be converted because of failure in whole or in part to satisfy the relevant Performance Goals or for any other reason shall be canceled at the time they would otherwise be distributable.
 
 
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The Performance Criteria which the Committee is authorized to use, in its sole discretion, are any of the following criteria or any combination thereof, including but not limited to the offset against each other of any combination of the following criteria:
 
(a)            Financial performance of the Company (on a consolidated basis), of one or more of its Subsidiaries, and/or a division of any of the foregoing.  Such financial performance may be based on net income, economic value added (as determined by the Committee), EBITDA (earnings before interest, taxes, depreciation and amortization), revenues, sales, expenses, costs, gross margin, operating margin, profit margin, pre-tax profit, market share, volumes of a particular product or service or category thereof, including but not limited to a product’s life cycle (for example, products introduced in the last two years), number of customers, number of products for sale, return on net assets, return on assets, return on capital, return on invested capital, cash flow, free cash flow, operating cash flow, operating revenues, operating expenses, operating income, and/or completion of capital raising transaction.
 
(b)            Service performance of the Company (on a consolidated basis), of one or more of its Subsidiaries, and/or of a division of any of the foregoing.  Employee satisfaction, employee retention, product development, completion of a joint venture or other corporate transaction, completion of an identified special project, and effectiveness of management.
 
(c)            The Company’s Stock price, return on stockholders’ equity, total stockholder return (Stock price appreciation plus dividends, assuming the reinvestment of dividends), and/or earnings per Share.
 
(d)            Impacts of acquisitions, dispositions, or restructurings, on any of the foregoing.
 
Unless otherwise provided by the Committee at any time, no such adjustment shall be made for a current or former executive officer to the extent such adjustment would cause an Award to fail to satisfy the performance based exemption of Section 162(m) of the Code.
 
If the material terms of the Performance Criteria are not changed, they will be disclosed to and reported to the stockholders no later than the first stockholder meeting that occurs in the fifth year following the year in which stockholders previously approved the Performance Criteria.
 
 
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8.7             Additional Limitations .  Notwithstanding any other provision of the Plan, any Award which is granted to a Covered Employee and is intended to constitute Qualified Performance-Based Compensation shall be subject to any additional limitations set forth in Section 162(m) of the Code that are requirements for qualification as qualified performance-based compensation as described in Section 162(m) of the Code, and the Plan shall be deemed amended to the extent necessary to conform to such requirements.
 
8.8             Termination of Employment for Cause .  In the event of the Termination of Employment of a Participant by the Company for Cause, all Performance Stock Units and Performance Shares shall be forfeited by the Participant to the Company.
 
8.9             Nontransferability .  Performance Stock Units and Performance Shares may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than in accordance with Article 10 or pursuant to a domestic relations order.
 
Article 9
Other Types of Awards
 
9.1             Performance Share Awards .  Any Participant selected by the Committee may be granted one or more Performance Share awards which shall be denominated in a number of shares of Stock and which may be linked to any one or more of the Performance Criteria or other specific performance criteria determined appropriate by the Committee, in each case on a specified date or dates or over any period or periods determined by the Committee.  In making such determinations, the Committee shall consider (among such other factors as it deems relevant in light of the specific type of award) the contributions, responsibilities and other compensation of the particular Participant.
 
9.2             Performance Stock Units .   Any Participant selected by the Committee may be granted one or more Performance Stock Unit awards which shall be denominated in units of value including dollar value of shares of Stock and which may be linked to any one or more of the Performance Criteria or other specific performance criteria determined appropriate by the Committee, in each case on a specified date or dates or over any period or periods determined by the Committee.  In making such determinations, the Committee shall consider (among such other factors as it deems relevant in light of the specific type of award) the contributions, responsibilities and other compensation of the particular Participant.
 
9.3             Dividend Equivalents .
 
(a)            Any Participant selected by the Committee may be granted Dividend Equivalents based on the dividends declared on the shares of Stock that are subject to any Award, to be credited as of dividend payment dates, during the period between the date the Award is granted and the date the Award is exercised, vests or expires, as determined by the Committee.  Such Dividend Equivalents shall be converted to cash or additional shares of Stock by such formula and at such time and subject to such limitations as may be determined by the Committee, in a matter consistent with the rules of Section 409A of the Code.
 
 
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(b)            Dividend Equivalents granted with respect to Options or SARs shall be payable, with respect to pre-exercise periods, regardless of whether such Option or SAR is subsequently exercised.
 
9.4             Deferred Stock .  Any Participant selected by the Committee may be granted an award of Deferred Stock in the manner determined from time to time by the Committee.  The number of shares of Deferred Stock shall be determined by the Committee and may be linked to the Performance Criteria or other specific performance criteria determined to be appropriate by the Committee, in each case on a specified date or dates or over any period or periods determined by the Committee.  Stock underlying a Deferred Stock Award will not be issued until the Deferred Stock Award has vested, pursuant to a vesting schedule or performance criteria set by the Committee.  Unless otherwise provided by the Committee, a Participant awarded Deferred Stock shall have no rights as a Company stockholder with respect to such Deferred Stock until such time as the Deferred Stock Award has vested and the Stock underlying the Deferred Stock Award has been issued.
 
9.5             Stock Appreciation Rights .  Any Participant selected by the Committee may be granted one or more SARs.  SARs may be granted alone or in tandem with Options.  With respect to SARs granted in tandem with Options, the exercise of either such Options or such SARs shall result in the simultaneous cancellation of the same number of tandem SARs or Options, as the case may be.  The exercise price per share of Stock covered by a SAR granted pursuant to the Plan shall be equal to or greater than Fair Market Value on the date the SAR was granted.  The term of each SAR shall be determined by the Committee in its sole discretion, but in no event shall the term exceed ten (10) years from the date of grant.  SARs may be settled in the form of cash, shares of Stock or a combination of cash and shares of Stock, as determined by the Committee.
 
9.6             Other Stock-Based Awards .  Any Participant selected by the Committee may be granted one or more Awards that provide Participants with shares of Stock or the right to purchase shares of Stock or that have a value derived from the value of, or an exercise or conversion privilege at a price related to, or that are otherwise payable in shares of Stock and which may be linked to any one or more of the Performance Criteria or other specific performance criteria determined appropriate by the Committee, in each case on a specified date or dates or over any period or periods determined by the Committee.  In making such determinations, the Committee shall consider (among such other factors as it deems relevant in light of the specific type of Award) the contributions, responsibilities and other compensation of the particular Participant.
 
9.7             Performance Bonus Awards .  Any Participant selected by the Committee may be granted one or more Performance-Based Awards in the form of a cash bonus (a “ Performance Bonus Award ”) payable upon the attainment of Performance Goals that are established by the Committee and relate to one or more of the Performance Criteria, in each case on a specified date or dates or over any period or periods determined by the Committee.  Any such Performance Bonus Award paid to a Covered Employee shall be based upon objectively determinable bonus formulas established in accordance with Article 8.  The maximum amount of any Performance Bonus Award payable to a Covered Employee with respect to any fiscal year of the Company shall not exceed $1,000,000.
 
 
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9.8             Term .  Except as otherwise provided herein, the term of any Award of Performance Shares, Performance Stock Units, Dividend Equivalents, Deferred Stock, Restricted Stock Units or Other Stock-Based Award shall be set by the Committee in its discretion.
 
9.9             Exercise or Purchase Price .  The Committee may establish the exercise or purchase price, if any, of any Award of Performance Shares, Performance Stock Units, Deferred Stock, Restricted Stock Units or Other Stock-Based Award; provided, however, that such price shall not be less than the par value of a share of Stock on the date of grant, unless otherwise permitted by applicable state law.
 
9.10           Exercise Upon Termination of Employment or Service .  An Award of Performance Shares, Performance Stock Units, Dividend Equivalents, Deferred Stock, Restricted Stock Units and Other Stock-Based Award shall only be exercisable or payable while the Participant is an Employee, Consultant or a member of the Board, as applicable; provided, however, that subject to Section 3.2, the Committee in its sole and absolute discretion may provide that an Award of Performance Shares, Performance Stock Units, Dividend Equivalents, Deferred Stock, Restricted Stock Units or Other Stock-Based Award may be exercised or paid subsequent to a Termination of Employment, or following a Change in Control of the Company, or because of the Participant’s retirement, death or disability, or otherwise; provided, however, that any such provision with respect to Performance Shares or Performance Stock Units shall be subject to the requirements of Section 162(m) of the Code that apply to Qualified Performance-Based Compensation.
 
9.11           Form of Payment .  Payments with respect to any Awards granted under this Article 9 shall be made in cash, in Stock or a combination of both, as determined by the Committee.
 
9.12          Award Agreement .  All Awards under this Article 9 shall be subject to such additional terms and conditions as determined by the Committee and shall be evidenced by a written Award Agreement.
 
9.13          Termination of Employment for Cause .  In the event of the Termination of Employment of a Participant by the Company for Cause, all Awards under this Article 9 shall be forfeited by the Participant to the Company.
 
9.14           Nontransferability .  Unless otherwise provided by the Committee, all Awards under this Article 9 may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than in accordance with Article 10 or pursuant to a domestic relations order.
 
Article 10
Beneficiary Designation
 
Notwithstanding Section 6.10, 7.3, 7.9 and 9.14, a Participant may, in the manner determined by the Committee, designate a beneficiary to exercise the rights of the Participant and to receive any distribution with respect to any Award upon the Participant’s death.  A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to the Participant, except to the extent the Plan and Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Committee.  If the Participant is married and resides in a community property state, a designation of a person other than the Participant’s spouse as his or her beneficiary with respect to more than fifty percent (50%) of the Participant’s interest in the Award shall not be effective without the prior written consent of the Participant’s spouse.  If no beneficiary has been designated or survives the Participant, payment shall be made to the person entitled thereto pursuant to the Participant’s will or the laws of descent and distribution.  Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time provided the change or revocation is filed with the Committee.
 
 
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Article 11
Employee Matters
 
11.1           Employment Not Guaranteed .  Nothing in the Plan shall interfere with or limit in any way the right of the Company or any Subsidiary to terminate any Participant’s Employment at any time, nor confer upon any Participant any right to continue in the employ of the Company or one of its Subsidiaries.
 
11.2           Participation .  No Employee shall have the right to be selected to receive an Award under this Plan, or, having been so selected, to be selected to receive a future Award.
 
11.3           Reimbursement of Company for Unearned or Ill-gotten Gains .  Unless otherwise specifically provided in an Award Agreement, and to the extent permitted by Applicable Law, if the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, the Committee may, without obtaining the approval or consent of the Company’s stockholders or of any Participant, require that (i) any Participant who personally engaged in one of more acts of fraud or misconduct that have caused or partially caused the need for such restatement; or (ii) any current or former chief executive officer, chief financial officer, or executive officer who received incentive-based compensation during the 3 year period preceding the date on which the Company is required to prepare an accounting restatement, regardless of their conduct, reimburse the Company in a manner consistent with Section 409A of the Code, if the Award constitutes “Non-Qualified Deferred Compensation,” for all or any portion of any Awards granted or settled under this Plan (with each such case being a “Reimbursement”), or the Committee may require the Termination or rescission of, or the recapture associated with, any Award, in excess of the amount the Participant would have received under the accounting restatement.   This provision is intended to satisfy the requirements of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Clawback Provision”).  Accordingly, to the extent of any inconsistency between this Section and the Dodd-Frank Clawback Provision, the Dodd-Frank Clawback Provision will prevail.  Additionally, to the extent that future rules and regulations are promulgated by the Securities and Exchange Commission or any other federal regulatory agency that would amend, modify or supplement the Dodd-Frank Clawback Provision, this Section shall be deemed modified to the extent required to make this Section consistent with the revised Dodd-Frank Clawback Provision.
 
 
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Article 12
Change in Control
 
Unless the Committee provides otherwise prior to the grant of an Award, upon the occurrence of a Change in Control, the following shall apply to such Award:
 
(a)            Any and all Options granted hereunder to a Participant immediately shall become vested and exercisable upon the Termination of Employment of the Participant by the Company or by the Participant for “Good Reason”;
 
(b)            Any restriction periods and all restrictions imposed on Restricted Stock and Restricted Stock Units shall lapse and they shall immediately become fully vested upon the Termination of Employment of the Participant by the Company or by the Participant for “Good Reason” provided, Restricted Stock Units shall be settled in accordance with the terms of the grant without regard to the Change in Control unless the Change in Control constitutes a “change in control event” within the meaning of Section 409A of the Code and such Termination of Employment occurs within two years following such Change in Control, in which case the Restricted Stock Units shall be settled and paid out with such Termination of Employment;
 
(c)            Unless otherwise determined by the Committee, the payout of Performance Stock Units and Performance Shares shall be determined exclusively by the attainment of the Performance Goals established by the Committee, which may not be modified after the Change in Control, and the Company shall not have the right to reduce the Awards for any other reason; and
 
(d)            For purposes of this Plan, “Good Reason” means in connection with a termination of employment by a Participant within two (2) years following a Change in Control, (a) a material adverse alteration in the Participant’s position or in the nature or status of the Participant’s responsibilities from those in effect immediately prior to the Change in Control, or (b) any material reduction in the Participant’s base salary rate or target annual bonus, in each case as in effect immediately prior to the Change in Control, or (c) the relocation of the Participant’s principal place of employment to a location that is more than fifty (50) miles from the location where the Participant was principally employed at the time of the Change in Control or materially increases the time of the Participant’s commute as compared to the Participant’s commute at the time of the Change in Control (except for required travel on the Company’s business to an extent substantially consistent with the Participant’s customary business travel obligations in the ordinary course of business prior to the Change in Control).
 
In order to invoke a Termination of Employment for Good Reason, a Participant must provide written notice to the Company or the Employer with respect to which the Participant is employed or providing services of the existence of one or more of the conditions constituting Good Reason within ninety (90) days following the Participant’s knowledge of the initial existence of such condition or conditions, specifying in reasonable detail the conditions constituting Good Reason, and the Company shall have thirty (30) days following receipt of such written notice (the “Cure Period”) during which it may remedy the condition.  In the event that the Company or the Employer fails to remedy the condition constituting Good Reason during the applicable Cure Period, the Participant’s “separation from service” (within the meaning of Section 409A of the Code) must occur, if at all, within two (2) years following such Cure Period in order for such termination as a result of such condition to constitute a Termination of Employment for Good Reason.
 
 
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Article 13
Amendment, Modification, and Termination
 
13.1           Amendment, Modification, and Termination .  With the approval of the Board, at any time and from time to time, the Committee may terminate, amend or modify the Plan; provided, however, that (a) to the extent necessary and desirable to comply with any applicable law, regulation, or stock exchange rule, the Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as required, and (b) stockholder approval is required for any amendment to the Plan that (i) increases the number of shares available under the Plan (other than any adjustment as provided by Section 4.3), or (ii) permits the Committee to grant Options with an Exercise Price that is below Fair Market Value on the date of grant, or (iii) permits the Committee to extend the exercise period for an Option beyond ten (10) years from the date of grant, or (iv) results in a material increase in benefits or a change in eligibility requirements, or (v) change the granting corporation or (vi) the type of stock.  Notwithstanding any provision in this Plan to the contrary, absent approval of the stockholders of the Company, no Option may be amended to reduce the per share Exercise Price of the shares subject to such Option below the per share exercise price as of the date the Option is granted and, except as permitted by Section 4.3, no Option may be granted in exchange for, or in connection with, the cancellation or surrender of an Option having a higher per share Exercise Price.
 
13.2           Awards Previously Granted .  No termination, amendment, or modification of the Plan or any Award (other than Performance Shares or Performance Stock Units) shall adversely affect in any material way any Award previously granted under the Plan, without the written consent of the Participant holding such Award; provided, however, that any such modification made for the purpose of complying with Section 409A of the Code may be made by the Company without the consent of any Participant.
 
13.3           Delay in Payment .  To the extent required in order to avoid the imposition of any interest and/or additional tax under Section 409A(a)(1)(B) of the Code, any amount that is considered deferred compensation under the Plan or Agreement and that is required to be postponed pursuant to Section 409A of the Code, following the a Participant’s Termination of Employment shall be delayed for six (6) months if a Participant is deemed to be a “specified employee” as defined in Section 409A(a)(2)(i)(B) of the Code; provided that, if the Participant dies during the postponement period prior to the payment of the postponed amount, the amounts withheld on account of Section 409A of the Code shall be paid to the executor or administrator of the decedent’s estate within 60 days following the date of his death.  A “Specified Employee” means any Participant who is a “key employee” (as defined in Section 416(i) of the Code without regard to paragraph (5) thereof), as determined by the Company in accordance with its uniform policy with respect to all arrangements subject to Section 409A of the Code, based upon the twelve (12) month period ending on each December 31st (such twelve (12) month period is referred to below as the “identification period”).  All Participants who are determined to be key employees under Section 416(i) of the Code (without regard to paragraph (5) thereof) during the identification period shall be treated as Specified Employees for purposes of the Plan during the twelve (12) month period that begins on the first day of the 4th month following the close of such identification period.
 
 
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Article 14
Withholding
 
14.1           Tax Withholding .  Unless otherwise provided by the Committee, the Company shall deduct or withhold any amount needed to satisfy any foreign, federal, state, or local tax (including but not limited to the Participant’s employment tax obligations) required by law to be withheld with respect to any taxable event arising or as a result of this Plan (“Withholding Taxes”).
 
14.2           Share Withholding .  Unless otherwise provided by the Committee, upon the exercise of Options, the lapse of restrictions on Restricted Stock, the vesting of Restricted Stock Units the distribution of Performance Shares in the form of Stock, or any other taxable event hereunder involving the transfer of Stock to a Participant, the Company shall withhold Stock equal in value, using the Fair Market Value on the date determined by the Company to be used to value the Stock for tax purposes, to the Withholding Taxes applicable to such transaction.
 
Any fractional Share of Stock payable to a Participant shall be withheld as additional Federal withholding, or, at the option of the Company, paid in cash to the Participant.
 
Unless otherwise determined by the Committee, when the method of payment for the Exercise Price is from the sale by a stockbroker pursuant to Section 6.9(c), herein, of the Stock acquired through the Option exercise, then the tax withholding shall be satisfied out of the proceeds.  For administrative purposes in determining the amount of taxes due, the sale price of such Stock shall be deemed to be the Fair Market Value of the Stock.
 
If permitted by the Committee, prior to the end of any Performance Period a Participant may elect to have a greater amount of Stock withheld from the distribution of Performance Shares to pay withholding taxes; provided, however, the Committee may prohibit or limit any individual election or all such elections at any time.
 
Alternatively, or in combination with the foregoing, the Committee may require Withholding Taxes to be paid in cash by the Participant or by the sale of a portion of the Stock being distributed in connection with an Award, or by a combination thereof.
 
The withholding of taxes is intended to comply with the requirements of Rule 10b5-1(c)(1)(i)(B) of the Exchange Act to the extent permitted by law.
 
Article 15
Successors
 
All obligations of the Company under the Plan, with respect to Awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.
 
 
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Article 16
Legal Construction
 
16.1           Gender and Number .  Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural.
 
16.2           Severability .  In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
 
16.3           Requirements of Law .  The granting of Awards and the issuance of Shares under the Plan shall be subject to Applicable Law and to such approvals by any governmental agencies or national securities exchanges as may be required.
 
16.4           Errors .  At any time the Company may correct any error made under the Plan without prejudice to the Company.  Such corrections may include, among other things, changing or revoking an issuance of an Award.
 
16.5           Elections and Notices .  Notwithstanding anything to the contrary contained in this Plan, all elections and notices of every kind shall be made on forms prepared by the Company or the General Counsel, Secretary or Assistant Secretary, or their respective delegates or shall be made in such other manner as permitted or required by the Company or the General Counsel, Secretary or Assistant Secretary, or their respective delegates, including but not limited to elections or notices through electronic means, over the Internet or otherwise.  An election shall be deemed made when received by the Company (or its designated agent, but only in cases where the designated agent has been appointed for the purpose of receiving such election), which may waive any defects in form.  The Company may limit the time an election may be made in advance of any deadline.
 
Where any notice or filing required or permitted to be given to the Company under the Plan, it shall be delivered to the principal office of the Company, directed to the attention of the General Counsel of the Company or his or her successor.  Such notice shall be deemed given on the date of delivery.
 
Notice to the Participant shall be deemed given when mailed (or sent by telecopy) to the Participant’s work or home address as shown on the records of the Company or, at the option of the Company, to the Participant’s e-mail address as shown on the records of the Company.
 
It is the Participant’s responsibility to ensure that the Participant’s addresses are kept up to date on the records of the Company.  In the case of notices affecting multiple Participants, the notices may be given by general distribution at the Participants’ work locations.
 
16.6           Governing Law .  To the extent not preempted by Federal law, the Plan, and all awards and agreements hereunder, and any and all disputes in connection therewith, shall be governed by and construed in accordance with the substantive laws of the State of New York, without regard to conflict or choice of law principles which might otherwise refer the construction, interpretation or enforceability of this Plan to the substantive law of another jurisdiction.
 
 
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16.7           Venue .  The Company and the Participant to whom an award under this Plan is granted, for themselves and their successors and assigns, irrevocably submit to the exclusive and sole jurisdiction and venue of the state or federal courts of New York with respect to any and all disputes arising out of or relating to this Plan, the subject matter of this Plan or any awards under this Plan, including but not limited to any disputes arising out of or relating to the interpretation and enforceability of any awards or the terms and conditions of this Plan.  To achieve certainty regarding the appropriate forum in which to prosecute and defend actions arising out of or relating to this Plan, and to ensure consistency in application and interpretation of the Governing Law to the Plan, the parties agree that (a) sole and exclusive appropriate venue for any such action shall be an appropriate federal or state court in New York, and no other, (b) all claims with respect to any such action shall be heard and determined exclusively in such New York court, and no other, (c) such New York court shall have sole and exclusive jurisdiction over the person of such parties and over the subject matter of any dispute relating hereto and (d) that the parties waive any and all objections and defenses to bringing any such action before such New York court, including but not limited to those relating to lack of personal jurisdiction, improper venue or forum non conveniens .
 
16.8           409A Compliance .  Awards under the Plan may be structured to be exempt from or be subject to Section 409A of the Code.  To the extent that Awards granted under the Plan are subject to Section 409A of the Code, the Plan will be construed and administered in a manner that enables the Plan and such Awards to comply with the provisions of Section 409A of the Code.
 
16.9           No Obligation to Notify .  The Company shall have no duty or obligation to any holder of an Option to advise such holder as to the time or manner of exercising such Option.  Furthermore, the Company shall have no duty or obligation to warn or otherwise advise such holder of a pending transaction or expiration of an Option or a possible period in which the Option may not be exercised.  The Company has no duty or obligation to minimize the tax consequences of an Option to the holder of such Option.
 
16.10         Indemnification .  To the extent allowable pursuant to applicable law, each member of the Committee or of the Board shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf.  The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Company’s Articles of Incorporation or By-laws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
 
 
24

 
 
16.11         Reporting .  The Company will provide grantees who are awarded Incentive Stock Options with statements in accordance with Section 6039(b) of the Code and will file a return with the Internal Revenue Service with respect to grantees who are awarded Incentive Stock Options in accordance with Section 6039(a)(1) of the Code.  The Company will provide grantees who are awarded Non-Qualified Stock Options with a statement containing the information set forth in Treas. Reg. Section 1.61-15(c)(3).
 
Adopted: April 20, 2015
 
 
25

 
 
Exhibit 16.1
 
 
 
1900 Main Street, Suite 375
Irvine, California 92614
tel 949-852-1600
fax 949-852-1606
 
4187 Flat Rock Drive, Suite 100
Riverside, CA 92505
tel 951-689-0680
fax 951-689-0681
 
www.rjicpas.com
 
 
 
 
June 1, 2015
 
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
 
Dear Sir or Madam:
 
We have read Item 4.01 in the current report on Form 8-K dated June 1, 2015 of AMERI Holdings, Inc. f/k/a Spatializer Audio Laboratories, Inc. filed with the Securities and Exchange Commission and are in agreement with the statements contained therein concerning our Firm.  However, we have no basis to disagree with the reason for the replacement of our Firm or whether this decision was recommended and approved by the Board.
 
Very truly yours,
 
/s/ Ramirez Jimenez International CPAs
 
Ramirez Jimenez International CPAs
Exhibit 21.1
 
LIST OF SUBSIDIARIES OF AMERI HOLDINGS, INC.
 
Entity Name
Jurisdiction of Formation
Ameri and Partners Inc.
Delaware
WinHire Inc.
Delaware
Linear Logics Corp.
Pennsylvania

 
Exhibit 99.1
 
Ameri and Partners Inc. and Subsidiaries

Consolidated Financial Statements

Year Ended March 31, 2015 and For the Period From
November 27, 2013 (Date of Inception) to March. 31, 2014

 
 
 

 
 
Ameri and Partners Inc. and Subsidiaries
 
TABLE OF CONTENTS
 
  Page  
 
Report of Independent Registered Public Accounting Firm
1
   
Consolidated Financial Statements
 
   
     Consolidated Balance Sheets as of March 31, 2015 and 2014
2
   
     Consolidated Statements of Income
     For the Year Ended March 31, 2015 and For the Period from
     November 27, 2013 (Date of Inception) to March 31, 2014
3
   
     Consolidated Statements of Changes in Stockholders’ Equity
     For the Year Ended March 31, 2015 and For the Period from
     November 27, 2013 (Date of Inception) to March 31, 2014
4
   
     Consolidated Statements of Cash Flows
     For the Year Ended March 31, 2015 and For the Period from
     November 27, 2013 (Date of Inception) to March 31, 2014
5
   
     Notes to Consolidated Financial Statements
6-15

 
 
 

 
 

 
Certified public Accountants
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
The Board of Directors and Stockholders
Ameri and Partners, Inc.
 
We have audited the accompanying consolidated balance sheets of Ameri and Partners, Inc. (the "Company") as of March 31, 2015 and 2014 and the related consolidated statements of operations, stockholders' equity and cash flows for the year ended March 31, 2015 and for the period from November 27,2013 (Date of Inception) to March 31,2014. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform tire audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such, opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 31, 2015 and 2014 and the results of its operations and its cash flows for the year ended March 31, 2015 and for the period from November 27, 201.3 (Date of Inception) to March 31, 2014, in conformity with accounting principles generally accepted in the United States of America.
 
 
/s/ Ram Associates
 
Ram Associates
Hamilton, NJ
 
May 20, 2015.
 
3240 East State Street Ext. ♦ Hamilton, NJ 086 1 9 ♦ (609) 63 1 -9552/63 1 -9553 ♦ FAX (888) 3 1 9-8898
PKRAM@ RAM ASSOCIATES. US
 
 
 

 
 
Ameri and Partners Inc. and Subsidiaries
Consolidated Balance Sheets
March 31 ,
 
Assets
 
   
2015
   
2014
 
Current assets:
           
Cash and cash equivalents
  $ 825,621     $ 374,706  
Accounts receivable
    2,981,574       2,937,292  
Other current assets
    180,622       125,864  
Total current assets
    3,987,817       3,437,862  
                 
Investments
    340,000       -  
                 
Fixed assets - net
    29,906       3,084  
                 
Intangible assets - net
    100,000       -  
                 
Security deposit
    3,750       -  
                 
Total assets
  $ 4,461,473     $ 3,440,946  
                 
                 
Liabilities and Stockholders' Equity
 
                 
Current liabilities:
               
Accounts payable
  $ 2,936,608     $ 2,802,825  
Other current liabilities
    146,791       -  
Taxes payable
    405,218       213,561  
Total current liabilities
    3,488,617       3,016,386  
                 
Stockholders' equity:
               
Common stock, $0.01 par value; 150,000 shares authorized, 99,225 and 65,509 issued and outstanding as of March 31, 2015 and March 31, 2014, respectively
    992       655  
Additional paid-in capital
    134,008       9,345  
Retained earnings
    837,856       414,560  
Total stockholders' equity
    972,856       424,560  
                 
Total liabilities and stockholders' equity
  $ 4,461,473     $ 3,440,946  
 

 
- see accompanying notes to consolidated financial statements -
 
 
2

 
 
Ameri and Partners Inc. and Subsidiaries
Consolidated Statements of Income
 
For the year ended March 31, 2015 and for the period from November 27, 2013 (Date of Inception)
to March 31, 2014
 
 
   
2015
   
Period from
November 27,
2013 (Date of
inception) to
March 31, 2014
 
             
Net revenue
  $ 16,804,379     $ 6,144,402  
                 
Cost of revenue
    15,114,400       5,233,361  
                 
Gross profit
    1,689,979       911,041  
                 
Operating expenses:
               
                 
Selling, general and administration expenses
    1,015,249       282,819  
                 
Operating income before other income / (expenses):
    674,730       628,222  
                 
Depreciation and amortization
    (33,372 )     (116 )
                 
Interest income
    -       15  
                 
Net income before income tax
    641,358       628,121  
                 
Income tax expense
    (218,062 )     (213,561 )
                 
Net income
  $ 423,296     $ 414,560  
 
 
- see accompanying notes to consolidated financial statements -
 
 
3

 
 
Ameri and Partners Inc. and Subsidiaries
 
Consolidated Statement of Changes in Stockholders' Equity
 
For the year ended March 31 , 2015 and for the period from November 27 , 2013 (Date of Inception) to March 31 , 2014
 
 
   
Common Stock
                   
   
Shares
   
Amount
   
Additional
paid-in-capital
   
Retained
earnings
   
Total
stockholders’
equity
 
Balance at November 27, 2013 (Date of Inception)
    -     $ -           $ -     $ -  
                                       
Issuance of capital
    65,509       655       9,345       10,000          
                                         
Net income
                            414,560       414,560  
                                         
Balance at March 31, 2014
    65,509     $ 655     $ 9,345     $ 414,560     $ 415,215  
                                         
Issuance of capital - April 1, 2014
    33,716       337       124,663               125,000  
                                         
Net income
                            423,296       423,296  
                                         
Balance at March 31, 2015
    99,225     $ 992     $ 134,008     $ 837,856     $ 963,511  
 
 
- see accompanying notes to consolidated financial statements -
 
 
4

 
 
Ameri and Partners Inc. and Subsidiaries
 
Consolidated Statements of Cash Flows

For the year ended March 31, 2015 and for the period from November 27, 2013 (Date of Inception)
to March 31, 2014
 
 
   
2015
   
Period from
November 27,
2013 (Date of
inception) to
March 31, 2014
 
Cash flows from operating activities:
           
Net income
  $ 423,296     $ 414,560  
Adjustment to reconcile net income to net cash provided by operating activities
               
Depreciation and amortization
    33,372       116  
Changes in assets and liabilities:
               
(Increase) decrease in:
               
Accounts receivable
    (44,282 )     (2,937,292 )
Other current assets
    (54,758 )     (125,864 )
Security deposit
    (3,750 )     -  
Increase (decrease) in:
               
Accounts payable and accrued expenses
    133,783       2,802,825  
Other current liabilities
    146,791       -  
Taxes payable
    191,657       213,561  
Net cash provided by operating activities
    826,109       367,906  
                 
Cash flows from investing activities:
               
Purchase of fixed assets
    (35,194 )     (3,200 )
Increase in intangibles
    (125,000 )     -  
Investments
    (340,000 )     -  
Net cash used in investing activities
    (500,194 )     (3,200 )
                 
Cash flows from financing activities:
               
Issuance of capital
    125,000       10,000  
Net cash provided by financing activities
    125,000       10,000  
                 
Net increase in cash and cash equivalents
    450,915       374,706  
Cash at the beginning of the year
    374,706       -  
Cash at the end of the year
  $ 825,621     $ 374,706  
                 
Supplementary disclosure of cash flows information
               
Cash paid during the period for:
               
Interest
  $ -     $ -  
Income taxes
    26,405       -  
 
- see accompanying notes to consolidated financial statements -
 
 
5

 
 
AMERI AND PARTNERS, INC AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
 
March 31, 2015 and 2014
 
1) Organization and Description of Business

Ameri and Partners, LLC (“Ameri100” or “the Company”)) a Delaware Limited Liability Company was formed on November 27, 2013. Ameri100 is a Technology Management Solution Company. The Company’s  Architect and Implement  solutions are designed to transform technology operations of client organizations. Ameri100’s Lean Enterprise Architecture Partner (LEAP), program enables clients to plan and implement both short and long term IT strategy. The Company leverages its global partner ecosystem which enables it to leverage a global talent pool. The global partner ecosystem helps Ameri100 to leverage the best talent at the right time. Ameri100 focuses on providing Transactional, Transitional and Transformational IT strategy and implementation to its clients.

Winhire Inc.

The Company entered into a Business Transfer Agreement on April 1, 2014 to acquire Winhire, Inc. (the “Subsidiary”). The Subsidiary, incorporated on July 2, 2011 is a Delaware corporation. As of April 1, 2014 the Company owns 100% of the Subsidiary.

2) Summary of Significant Accounting Policies

Basis of consolidated financial statements

The consolidated financial statements include the financial statements of the Company and its Subsidiaries. For the period from November 27, 2013 (Date of Inception) to March 31, 2014, the financial statements consist of the Company alone. All significant related party accounts and transactions between the Company and the Subsidiary have been eliminated upon consolidation. Previous year’s numbers are regrouped wherever necessary.

Accounting Policies

These financial statements are prepared on the accrual basis of accounting in conformity with accounting    principles    generally    accepted   in   the   United   States   of   America   (US GAAP); consequently, revenue is recognized when services are rendered and expenses are reflected when costs are incurred.

Business combination

In accordance with FASB ASC 805  “Business Combinations” , assets and liabilities are recorded at their acquisition date fair values.  Any differences between those fair values and the purchase price is recorded as goodwill or gain.
 
 
6

 

Management makes estimates of fair values based upon assumptions believed to be reasonable.  These estimates are based on historical experience and information obtained from the management of the acquired companies. Critical estimates in valuing certain of the intangible assets include but are not limited to: future expected cash flows from revenues, customer relationships, key management and market positions, assumptions about the period of time the acquired trade names will continue to be used in the Company’s combined product portfolio, and discount rates used to establish fair value.  These estimates are inherently uncertain and unpredictable. Assumptions may be incomplete or inaccurate, and unanticipated events and circumstances may occur which may affect the accuracy or validity of such assumptions, estimates or actual results.
 
Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and use assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are often based on judgments, probabilities and assumptions that management believes are reasonable but that are inherently uncertain and unpredictable. As a result, actual results could differ from those estimates. Management periodically evaluates estimates used in the preparation of the financial statements for continued reasonableness. Appropriate adjustments, if any, to the estimates used are made prospectively based on such periodic evaluations.
 
Revenue Recognition

The Company recognizes revenue in accordance with the Accounting Standard Codification 605 “Revenue Recognition.” Revenue is recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the seller’s price to buyer is fixed and determinable, and (4) collectability is reasonably assured.

The Company recognizes revenue from information technology services as the services are provided. Service revenues are recognized based on contracted hourly rates, as services are rendered or upon completion of specified contracted services and acceptance by the customer.
 
 
7

 

Cash and Cash Equivalents

The Company considers all highly-liquid investments (including money market funds) with an original maturity at acquisition of three months or less to be cash equivalents. The Company maintains cash balances, which may exceed federally insured limits. The Company does not believe that this results in any significant credit risk.

Accounts Receivable

The Company extends credit to clients based upon management’s assessment of their credit-worthiness on an unsecured basis. The Company provides an allowance for uncollectible accounts based on historical experience and management evaluation of trend   analysis.   The Company includes any balances that are determined to be uncollectible in its allowance for doubtful accounts. The allowances for uncollectible accounts as of March 31, 2015 and for the period from November 27, 2013 to March 31, 2014 were $ Nil. Based on the information available, management believes the Company’s accounts receivable, net of allowance for doubtful accounts, are collectible.

Property and Equipment

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

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

Investments

Investments in an entity where the Company owns less than twenty percent of the voting stock of the entity and does not exercise significant influence over operating and financial policies of the entity are accounted for using the cost method. Investments in the entity where the Company owns twenty percent or more but not in excess of fifty percent of the voting stock of the entity or less than twenty percent and exercises significant influence over operating and financial policies of the entity are accounted for using the equity method. The Company has a policy in place to review its investments at least annually, to evaluate the carrying value of the investments in these companies. The cost method investment is subject to impairment assessment if there are identified events or changes in circumstance that may have a significant adverse effect on the fair value of investments.  If the Company believes that the carrying value of an investment is in excess of estimated fair value, it is the Company's policy to record an impairment charge to adjust the carrying value to the estimated  fair value, if the impairment is  considered other-than-temporary.
 
 
8

 

Income Taxes

The Company was formed as a Limited Liability Company and subsequently converted to into a corporation. The Company has elected to be taxed as a C Corporation. Income taxes have been provided for using an assets and liability approach in which deferred tax assets and liabilities are recognized for the differences between  the  financial  statement  and  tax  basis  of  assets  and  liabilities using enacted tax rates in  effect  for  the years in  which  the  differences  are  expected  to  reverse. A valuation allowance is provided for the portion of deferred tax assets when, based on available evidence, it is not “more-likely-than-not” that a portion of the deferred tax assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rate and laws.

The Company’s effective tax rate is 34% for the fiscal year ended March 31, 2015 and for the period from November 27, 2013 to March 31, 2014. The future effective income tax rate depends on various factors, such as the Company’s income (loss) before taxes, tax legislation and the geographic composition of pre-tax income.

The Company files income tax returns in the U.S. federal jurisdiction, and various State jurisdictions.  The Company is generally subject to U.S. Federal, State and local examinations by tax authorities for the calendar year 2013 and 2014, and the last three years of the Subsidiary’s tax returns are subject examinations by tax authorities.

Fair Value of Financial Instruments

The Company measures its financial assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., exit price) in an orderly transaction between market participants at the measurement date. Additionally, the Company is required to provide disclosure and categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e., inputs) used in the valuation. Level 1 provides the most reliable measure of fair value while level 3 generally requires significant management judgment. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. The fair value hierarchy is defined as follows:
 
 
9

 

Level 1 – Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 – Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly.

Level 3 – Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate of what market participants would use in valuing the asset or liability at the measurement date.

The following table summarizes fair value measurements at March 31, 2015 and 2014 for assets and liabilities measured at fair value on a recurring basis:

March 31, 2015
 
Level 1
   
Level 2
   
Level 3
   
Total
 
Cash and cash equivalents
  $ 825,621     $ -     $ -     $ 825,621  
Investment
    340,000       -       -       -  

March 31, 2014
 
Level 1
   
Level 2
   
Level 3
   
Total
 
Cash and cash equivalents
  $ 374,706     $ -     $ -     $ 374,706  

The carrying amount of certain of the Company’s financial instruments, including accounts receivable and accounts payable, approximates fair value due to the relatively short maturity of such instruments.

Concentrations

For the year ended March 31, 2015 sales to three major customers accounted for 93% of total revenue. These same customers accounted for 85% of the accounts receivable balance at March 31, 2015. For the period from November 27, 2013 to March 31, 2014, sales to one customer (Axalta Coating Systems LLC) accounted for 100% of total revenue. The same customer accounted for 100% of the accounts receivable at March 31, 2014. The Company maintains cash balances in two financial institutions. The balances are generally insured by the Federal Deposit Insurance Corporation up to $250,000 per institution. At March 31, 2015 and 2014, the Company had cash balances totaling $825,621 and $374,706, respectively, held in different institutions.
 
 
10

 

3) Property and Equipment

Property and equipment consisted of the following at March 31,
   
2015
   
2014
 
Computer Equipment
  $ 11,642     $ 2,929  
Office Equipment
    2,491       271  
Furniture and Fixtures
    1,292       -  
Vehicle
    23,768       -  
      39,193       3,200  
Less : Accumulated Depreciation and Amortization
    (9,287 )     (116 )
Net Fixed Assets
  $ 29,906     $ 3,084  

Depreciation expense during the year ended March 31, 2015 and for the period from November 27, 2013 to March 31, 2014 was $ 8,372 and $116, respectively.

4) Intangible Assets

The Company periodically reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist.  Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, requires that goodwill and certain intangible assets be assessed annually for impairment using fair value measurement techniques. During the year ended March 31, 2015, no such impairment was assessed.

Intangible assets consisted of the following at March 31, 2015:

Customer List
  $ 125,000  
Accumulated amortization
    25,000  
    Total
  $ 100,000  
 
 
11

 

 
Amortization expense during the year ended March 31, 2015 was $ 25,000.

Estimated amortization expenses for intangible assets for each of the next four years are as follows:

Year ending March 31,
       
     2016
  $ 25,000  
     2017
    25,000  
     2018
    25,000  
     2019
    25,000  
         Total
  $ 100,000  

5) Related Party Transactions

 
a.
Loans and advances

As of March 31, 2015, the Subsidiary has provided a short-term advance of $ 138,808 to Giri Devanur, a shareholder of the company. The amount has been classified under other current assets in the accompanying balance sheet. The advance has been provided on a short-term basis and do not carry any interest. Accordingly, no interest income was accrued in the accompanying financial statement.

 
b.
Product development charges – Langer Index

As of March 31, 2015, the Company has paid a total amount of $30,762 to Ameri India and $147,300 to Winhire Technology Pvt Ltd., an entity owned by Giri Devanur and his spouse towards product development charges.

 
c.
Consultancy Charges

During the year ended March 31, 2015 and the period from November 27, 2013 to March 31, 2014, the Company received consulting services from Ameri India for $1,270,225 and $ 895,000, respectively as per the Master Services Agreement between Ameri and Partners and Ameri Consulting Service Pvt Ltd.

 
d.
Accounts Payable

As of March 31, 2015 and 2014, the Company had accounts payable balance of $ 77,715 and $379,000, respectively, due to Ameri India for the services rendered as per the MSA.
 
 
12

 

 6) New Accounting Pronouncements

i)           In August 2014, the Financial Accounting Standards Board (“FASB”) issued amended guidance related to disclosure of uncertainties about an entity’s ability to continue as a going concern. The new guidance requires management to evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern and, as necessary, to provide related footnote disclosures. The guidance has an effective date of December 31, 2016. The Company believes that the adoption of this new standard will not have a material impact on its consolidated financial statements.
 
ii)           In May 2014, the Financial Accounting Standards Board, or (“FASB”), issued Accounting Standard Update, or (“ASU”), 2014-09- Revenue from Contracts with Customers , which provides a single, comprehensive revenue recognition model for all contracts with customers. The core principal of this ASU is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2016. Early adoption is not permitted. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements.
 
iii)           In January 2015, the Financial Accounting Standards Board, or (“FASB”), issued Accounting Standard Update, or ASU, 2015-01- Income Statement-Extraordinary and Unusual Items , which seeks to simplify income statement presentation by eliminating the concept of Extraordinary Items. This Update eliminates from GAAP the concept of extraordinary items. Subtopic 225-20, Income Statement—Extraordinary and Unusual Items, required that an entity separately classify, present, and disclose extraordinary events and transactions. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption.
 
 
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7) License Agreement – Langer Index

The Company entered into a License Agreement on March 26, 2015. The agreement between the Licensor and the Company grants a license for the Langer Model to generate the Langer Index. The agreement provides for an exclusive, perpetual, irrevocable and worldwide use of the Langer Model by the Company. License fees are payable to the Licensor at the rate of $10,000 per customer for the first 100 customer contracts. Thereafter, the fees will be payable at the rate of $5,000 for every 100 customer contracts, which will be payable upon signing of every block of 100 customers.

8) Commitments

Legal Matters

Currently, the Company is not involved in any action, arbitration and / or other legal proceedings  that  it   expects  to  have  a  material  adverse  effect on  the  business, financial condition, results of operations or liquidity of the Company. All legal cost is expensed as incurred.

Operating Lease

The Company has entered into an operating lease for its office facility and equipment lease expiring through September 2015.

Future minimum payments under leases with a term greater than one-year as of March 31, 2015 are as follows:
 
Years ending March 31,
 
Total
 
     2016
  $ 6,073  
     Total
  $ 6,073  
 
Rent expense amounted to $ 15,145 for the year ended March 31, 2015.

9) Acquisition of Winhire Inc.

The Company has entered into a Business Transfer Agreement (“Agreement”) to acquire 100% ownership in Winhire Inc., a Delaware Corporation on April 01, 2014. The Company has offered and issued 33,716 number of its common shares for a total value of $125,000 as consideration for the Agreement. The purchase consideration of $125,000 is allocated towards the value of customer accounts acquired and has been classified under intangible assets in the accompanying balance sheet. The customer accounts is subject to amortization and will be amortized over a period of five years.
 
 
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10) Investments

The Company has entered into a Share Purchase Agreement (“Agreement”) to acquire 100% ownership in Linear Logics Corp., a Pennsylvania Corporation on April 1, 2015 for a total price of $2,250,000. A total of $1,000,000 is payable in cash and balance amount is payable in the form of shares of the Company. The Company has paid the first installment of $340,000 towards the cash price which is classified as an investment in the accompanying balance sheet. The balance is payable in two installments. The Agreement is subject to various preconditions subject to which the balance amount of $660,000 is payable. The agreement has not been fully executed and closed as of the balance sheet date and hence, the financial statements of Linear Logics Corp. is not part of the accompanying consolidated financial statements. The Company has not been issued the shares and is not in control of the affairs of Linear Logics Corp. as of the balance sheet date.

11) Subsequent Events

The Company has evaluated subsequent events through May 20, 2015, the date which the financial statements were available to be issued. The Company is pursuing various investment options through mergers and acquisitions. As of the balance sheet date and through the date of the report, the Company has not finalized any transaction. No other reportable subsequent events have occurred through May 20, 2015 which would have a significant effect on the financial statements as of March 31, 2015, except as otherwise disclosed.
 
 
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Exhibit 99.2
 
 
AMERI HOLDINGS, INC.
 
Unaudited Pro Forma Consolidated Balance Sheet
 
March 31, 2015
 
                           
   
Ameri Holdings, Inc.
   
Ameri &
Partners, Inc.
 
Notes
 
Pro Forma 
Adjustments
   
Pro Forma 
Combined
 
ASSETS
 
Current assets:
                         
Cash and cash equivalents
  $ 3,898     $ 825,621       $ -     $ 829,519  
Accounts receivable
    -       2,981,574         -       2,981,574  
Other current assets
    -       180,622         -       180,622  
Total current assets
    3,898       3,987,817         -       3,991,715  
                                   
Investments
    -       340,000                 340,000  
                                   
Fixed assets
    -       29,906         -       29,906  
                                   
Intangible assets-net
    -       100,000         -       100,000  
                                   
Security deposit
    -       3,750         -       3,750  
                                   
TOTAL ASSETS
  $ 3,898     $ 4,461,473       $ -     $ 4,465,371  
                                   
LIABILITIES AND STOCKHOLDER'S EQUITY
 
                                   
Current liabilities:
                                 
Accounts payable
  $ 10,344     $ 2,936,608               $ 2,946,952  
Other current liabilities
    -       146,791         -       146,791  
Taxes payable
    -       405,218         -       405,218  
Total current liabilities
    10,344       3,488,617         -       3,498,961  
                                   
Stockholder's equity:
                                 
Preferred shares
    -       -                 -  
Common stock
    154,099       992      a     (30,091 )     125,000  
Additional paid-in capital
    47,268,208       134,008      a     (47,398,662 )     3,554  
Accumulated deficit
    (47,428,753 )     837,856     a     47,428,753       837,856  
Total stockholder's deficit
    (6,446 )     972,856           -       966,410  
                                     
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT
  $ 3,898     $ 4,461,473         $ -     $ 4,465,371  
                                     
See Notes to Unaudited Pro Forma Consolidated Financial Statements
 
 
 
 

 
 
 
AMERI HOLDINGS, INC.
 
Unaudited Pro Forma Combined Statement of Operations
 
For the Year Ended March 31, 2015
 
                         
                         
   
Ameri
Holdings, Inc.
   
Ameri &
Partners, Inc.
   
Pro Forma 
Adjustments
   
Pro Forma 
Combined
 
Revenue
  $ -     $ 6,804,379     $ -     $ 6,804,379  
Cost of revenue
    -       15,114,400       -       15,114,400  
Gross profit
    -       1,689,979       -       1,689,979  
Operating expenses:
                               
Selling, general and administrative
    27,527       1,015,249       -       1,042,776  
                                 
Income before other income / (expenses)
    (27,527 )     674,730       -       647,203  
                                 
Depreciation and amortization
    -       (33,372 )             (33,372 )
                                 
Net income before income tax
    (27,527 )     641,358       -       613,831  
Provision for income taxes
    (825 )     (218,062 )     -       (218,887 )
                                 
Income (loss) from continuing operations
  $ (28,352 )   $ 423,296     $ -     $ 394,944  
                                 
Net income (loss) per common share from continuing operations:
                               
                                 
Basic and diluted
    (0.00 )     4.27               0.03  
Diluted
  $ (0.00 )   $ 4.27             $ 0.03  
                                 
Weight average common share outstanding:
                               
Basic and diluted
    15,409,999       99,225       (3,009,154 )     12,500,070  
                                 
 
See Notes to Unaudited Pro Forma Consolidated Financial Statements
 
                                 
Pro Forma Adjustments
                               
                                 
The preceding unaudited condensed combined consolidated pro forma balance sheet has been prepared as if the Merger was completed on March 31, 2015; the preceding unaudited condensed combined consolidated pro forma statement of operations has been prepared as if the Merger was completed on April 1, 2015. The following is the pro forma adjustment:
 
                                 
(a) Adjust the accounts of the companies to reflect the Merger resulting in Ameri & Partners, Inc. as the accounting acquirer. After the closing of the Merger and the Private Placement, the Company will have 12,500,070 shares of common stock outstanding.
 
                                 
                                 
Income (loss) Per Share from Continuing Operations
                               
                                 
Pro forma basic and diluted shares outstanding include the weighted average number of common shares outstanding for Ameri & Partners, Inc. during the respective periods, in addition to the common stock issued as a result of the Merger assuming they had been issued at the beginning of the period. The common stock issued in connection with the Merger is assumed to be outstanding for the entire period presented.