Ameri100 Secures Amendment in an Anticipated $1.5 Million in Annual Cash Savings

AMERI Holdings (NASDAQ:AMRH), a specialized SAP cloud, digital and enterprise services company announced that it has entered into an amendment agreement to amend and restate the terms of the certificate of designation of Rights and Preferences to the company’s existing 9 percent series A preferred stock.

The company entered the agreement with Lone Star Value Investors, the sole holder of the preferred stock.

As quoted in the text release:

Key terms of the Amendment, which will be filed with the Delaware Secretary of State following stockholder approval at the Company’s 2018 annual meeting, are:

• The elimination of any prior defaults with respect to non-payment of dividends.
• The cancellation of the existing cash dividend rate of 9.00% per annum or the payment of a penalty rate of 11.00% per annum for the payment of dividends in-kind through the issuance of additional Preferred Stock; in lieu thereof, the Company will pay Preferred Stockholders dividends in-kind through the issuance of additional Preferred Stock at a rate per annum equal to 2.00% for the next two years and then a cash dividend at the rate of 2.00% per annum. As a result of the Amendment, the Company anticipates approximately $1.5 million in annualized cash savings.

In addition, pursuant to the Agreement, Ameri100 will issue five-year warrants to holders of Preferred Stock to purchase 5,000,000 shares of the Company’s common stock promptly following the effectiveness of the Amendment. The warrants will be immediately exercisable upon their issuance at a cash conversion price of $1.50 per share. The warrants are subject to an accelerated termination date if the Company’s share price exceeds $2.00 for 10 out of 15 consecutive trading days. Should the Company elect to accelerate the termination date of the warrants, any unexercised at the termination date shall automatically be canceled without any further obligations on the part of the Company or the holders of the warrants.

The Amendment and warrant issuance are subject to approval by the Company’s stockholders at the Company’s 2018 annual meeting of stockholders which is anticipated to be held in August 2018.

Dev Nidhi, Founder and Vice Chairman of Ameri100, stated, “Replacing the Preferred Stock cash dividend with a paid in-kind payment over the next two years, together with a reduction in the dividend accretion rate, are the first of several steps being taken to preserve our capital and give us additional liquidity with which to pursue our growth goals, both organic and through the consummation of acquisition opportunities that will enhance value for shareholders. On behalf of the Board, I would like to thank LSV for working with us in support of the Company’s long-term success.”

Click here for the full text release.