United States securities and exchange commission logo
June 24, 2020
Brent Kelton
Chief Executive Officer
AMERI Holdings, Inc.
4080 McGinnis Ferry Road, Suite 1306
Alpharetta,GA 30005
Re: AMERI Holdings,
Inc.
Registration
Statement on Form S-4
Filed May 28, 2020
File No. 333-238742
Dear Mr. Kelton:
We have reviewed your registration statement and have the
following comments. In
some of our comments we may ask you to provide us information so that we
may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe that our comments apply to
your facts and
circumstances or do not believe that an amendment is appropriate, please
tell us why in your
response.
After reviewing any amendment to your registration statement and
the information that
you provide in response to these comments, we may have additional
comments.
Registration Statement on Form S-4 filed May 28, 2020
General, page i
1. Please provide us your
analysis on why you are not required to register the amalgamated
transactions as a
primary offering to the public. It appears that the purpose of these
transactions is to
create a market in the securities of Jay Pharma and Tikkun through
Ameri. For more
information, please refer to Interpretation 612.15 in the Securities Act
Rules section of our
Compliance and Disclosure Interpretations and Staff Legal Bulletin
No. 4 available on the
Commission's website.
2. In reviewing your
disclosures, it appears that you, Jay Pharma, and Tikkun are engaged in
offerings in addition
to the amalgamation that is the subject of this registration statement.
Please explain the
exemptions from registration relied upon.
Brent Kelton
FirstName LastNameBrent Kelton
AMERI Holdings, Inc.
Comapany NameAMERI Holdings, Inc.
June 24, 2020
June 24, 2020 Page 2
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3. Disclosure indicates that the value of amalgamation consideration that
Jay Pharma equity
holders will receive in the amalgamation will depend on the market
price of the shares of
Ameri common stock at the time the amalgamation is completed and could
be greater
than, less than, or the same as the market price of the shares of
Ameri common stock on
the date of the joint proxy statement/prospectus. Expand the
disclosure in the front or
forepart of the joint proxy statement/prospectus to include a range of
the market price of
the shares of Ameri common stock as of a recent date that you select.
We note the
disclosure on page 197.
4. To the extent practicable, include all non-Rule 430A information when
you first amend
the registration statement on Form S-4.
Outside Front Cover Page of Joint Proxy Statement/Prospectus, page 1
5. Limit to one page the letter to the stockholders of Ameri and the
shareholders of Jay
Pharma which serves as the outside front cover page of the joint proxy
statement/prospectus. See Item 501(b) of Regulation S-K.
6. Please disclose the name of the "Investor," or tell us why you are not
required to do so.
Questions and Answers about the Amalgamation, page 1
7. You repeat information about the special meetings of Ameri and Jay
Pharma in the
questions and answers or Q&A section and the summary section. The Q&A
section
should not repeat information that appears in the summary section and
vice versa. For
purposes of eliminating redundancies and grouping together like
information, view the
Q&A and the summary sections as one section. For example, discuss
procedural
questions such as the voting and the appraisal procedures specific to
the amalgamation
transaction in the Q&A, and place disclosure of the substantive
aspects of the
amalgamation agreement proposal and other proposals in the summary.
Summary, page 18
8. A summary term sheet beginning on the first or second page of the
disclosure document
provided to the stockholders of Ameri and the shareholders of Jay
Pharma is required by
Item 1001 of Regulation M-A. See Item 14(b)(1) of Schedule 14A and
instruction 2 to
Item 1001 of Regulation M-A. If you intend for the summary to serve as
the summary
term sheet, move it forward to begin on the first or second page of
the disclosure
document.
9. Please revise the summary to disclose more clearly and prominently the
following:
Subsequent to the amalgamation, the common shareholders of Ameri
will no longer
hold any ownership interest in the historical business and
operations of Ameri;
The business and operations of the Resulting Issuer will solely
consist of the business
and operations of Jay Pharma; and
A summary of the estimated costs and expenses that are expected as a
result of the
Brent Kelton
FirstName LastNameBrent Kelton
AMERI Holdings, Inc.
Comapany NameAMERI Holdings, Inc.
June 24, 2020
June 24, 2020 Page 3
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FirstName LastName
amalgamation and related transactions.
10. To facilitate understanding, please include an organizational chart
depicting the
organizational structure of the entities involved both before and
after the consummation of
the transactions. This chart also should illustrate the states or
countries of incorporation of
various legal entities and various affiliations that exist.
11. To facilitate understanding, you should consider including a timeline
which graphically
depicts the anticipated timeframe of each significant event in the
amalgamation and
divestiture transactions.
Interests of Ameri's Directors and Executive Officers in the Amalgamation (see
page 143)
Interests of Jay Pharma's Directors and Executive Officers in the Amalgamation
(see page 143),
page 35
12. For any interests of directors and executive officers of Ameri and Jay
Pharma in the
amalgamation that are different from or in addition to the interests
of the other
stockholders of Ameri or the other shareholders of Jay Pharma, not
only describe but also
quantify those interests and their value for each director and officer
individually, including
shares to be exchanged, cash received in lieu of any fractional
shares, cash payments
under any employment, retention, severance, or directorship
agreements, and any
outstanding options and warrants. Consider presenting this information
in bullet points or
tabular format so that it is easier for the stockholders of Ameri and
the shareholders of Jay
Pharma to read and understand.
U.S. Federal Income Tax Considerations (see page 145), page 44
13. We note the "should" qualify language. Explain why counsel is unable
to provide a "will"
qualify conclusion rather than a "should" qualify conclusion, and
disclose any resulting
risks to Jay Pharma's shareholders and warrant holders. Additionally,
we note that tax
opinions are to be filed by amendment as Exhibits 8.1, 8.2, and 8.3.
If each of the three
counsels elects to file a short form tax opinion, both the opinion and
the information in the
joint proxy statement/prospectus must state clearly that the
discussion in the joint proxy
statement/prospectus constitutes counsel's opinion.
Selected Historical Financial Information of Ameri, page 46
14. Please expand the selected financial information of Ameri to present
disclosures as of and
for each of the two years ended December 31, 2019 as required by Item
3(d) of Form S-4.
Selected Historical Financial Information of Jay Pharma , page 51
15. Please expand the selected financial information of Jay Pharma to
present disclosures as
of and for each of the two years ended December 31, 2019 as required
by Item 3(d) of
Form S-4.
Comparative Historical and Unaudited Pro Forma Per Share Data , page 55
Brent Kelton
FirstName LastNameBrent Kelton
AMERI Holdings, Inc.
Comapany NameAMERI Holdings, Inc.
June 24, 2020
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June 24, 2020 Page 4
FirstName LastName
16. Please correct Ameri's historical loss per share for the period ended
March 31, 2020.
17. Please expand the per share data to present Ameri's historical loss
per share, Jay Pharma's
historical loss per share, and the pro forma loss per share for the
year ended December 31,
2019 as required by Item 3(f) of Form S-4. In addition, please present
the pro forma
equivalent per share disclosures required by Item 3(f) of Form S-4.
Please be advised,
given the reverse acquisition, it appears to us the pro forma
equivalent disclosures should
be presented for the Ameri common shareholders and should be
calculated as each related
pro forma amount multiplied by the exchange ratio that the Ameri
common shareholders
will receive in the Resulting Issuer.
Risk Factors, page 56
18. Data on pages 57, 59, and 67 relating to the number of shares to be
issued to the financial
advisor and the percentage of the resulting issuer's shares those
shares represent; the
amount of the reimbursement expense upon termination of the
amalgamation agreement;
and the number of shares to be issued upon exercise of certain options
and warrants are
inconsistent with disclosures elsewhere in the joint proxy
statement/prospectus. Please
reconcile the disclosures throughout the joint proxy
statement/prospectus.
Jay Pharma may not be able to adequately protect its future product
candidates..., page 86
19. Clarify whether Jay Pharma has any issued patents. We note the
disclosure under
"Patents" on page 272.
Background of the Amalgamation, page 126
20. In the last paragraph on page 127, identify the advisors and the
additional advisors of
Ameri and Jay Pharma.
Ameri's Reasons for the Amalgamation
Jay Pharma's Reasons for the Amalgamation, page 131
21. The lists of factors on pages 131-133 merely repeat the disclosures on
pages 30-33 and do
not inform the stockholders of Ameri or the shareholders of Jay Pharma
how each factor
impacted the decisions of the boards of directors of Ameri and Jay
Pharma to approve the
amalgamation. Revise the disclosure to discuss each of the factors in
reasonable detail so
that the stockholders of Ameri and the shareholders of Jay Pharma may
understand why
the boards of directors of Ameri and Jay Pharma determined that each
factor supported or
detracted from the advisability of the amalgamation. By way of
example, Ameri should
elaborate on the factors relating to a diversified business platform,
a well-capitalized
company, and strategic alternatives. By way of example, Jay Pharma
should elaborate on
the factor relating to strategic alternatives, including whether and
how any actual
or potential strategic alternatives were explored, and, if not, why
not, and the factor
relating to short and long term strategic objectives and associated
risks.
Brent Kelton
FirstName LastNameBrent Kelton
AMERI Holdings, Inc.
Comapany NameAMERI Holdings, Inc.
June 24, 2020
Page 5
June 24, 2020 Page 5
FirstName LastName
Jay Pharma's Reasons for the Amalgamation, page 132
22. We note the disclosure that the board of directors of Jay Pharma
considered the financial
projections of Ameri in its decision to approve and adopt the
amalgamation agreement and
other transactions contemplated by the amalgamation agreement and to
recommend that
its shareholders approve the amalgamation agreement proposal. Include
in the joint proxy
statement/prospectus the financial projections of Ameri considered by
the board of
directors of Jay Pharma. Additionally, include a subsection in the
summary term sheet on
the financial projections of Ameri provided to Jay Pharma.
The Amalgamation Agreement, page 155
23. Notwithstanding the disclaimers in the second paragraph on page 155,
disclose that if
specific material facts exist which contradict the representations and
the warranties
contained in the amalgamation agreement, you have provided corrective
disclosure in the
joint proxy statement/prospectus. Additionally, if subsequent
information concerning the
subject matter of the representations and the warranties contained in
the amalgamation
agreement may or may not be fully reflected in your public
disclosures, disclose that your
public disclosures will include any material information necessary to
provide the
stockholders of Ameri and the shareholders of Jay Pharma a materially
complete
understanding of the amalgamation agreement disclosures.
Background of the Spin-off, page 190
24. Identify the members and the independent legal advisors of the special
committee, and
disclose how the members of the committee were chosen.
25. Elaborate on Ameri's active negotiations with three companies; Ameri's
review of
opportunities with several other companies; and Ameri's reasons for
terminating
discussions with Party B and Party C.
Comparative Market Price and Dividend Information , page 197
26. Please provide all the disclosures required by Item 3(g) of Form S-4.
Unaudited Pro Forma Condensed Combined Financial Statements, page 198
27. Please address the following:
More fully explain to us how you determined each transaction
reflected in the pro
forma financial statements is directly related to the amalgamation
and is factually
supportable;
Clearly disclose if there are any circumstances under which the
amalgamation could
proceed without one or more of the related transactions also
occurring and, if there
are, revise the pro forma financial statements to appropriately
reflect those
alternatives; and
Brent Kelton
FirstName LastNameBrent Kelton
AMERI Holdings, Inc.
Comapany NameAMERI Holdings, Inc.
June 24, 2020
Page 6
June 24, 2020 Page 6
FirstName LastName
Based on the current pro forma financial statements and the
intended spin-off
transaction, revise the disclosures in the first paragraph on
page 199 and the
disclosures related to Ameri's assets and liabilities in the
second paragraph on page
199 since they do not appear to be accurate. Since we assume the
intended spin-off
will occur before the amalgamation, it appears to us that as
disclosed under
"Accounting Treatment" on pages 44, 145, and 205 the amalgamation
will be
accounted for as a reverse acquisition with Ameri being treated
as the
acquired company for financial reporting purposes due to the
ownership interests of
Jay Pharma's shareholders in the Resulting Issuer and will be
considered a capital
transaction in substance.
28. In regard to the disclosures on pages 203 and 204 related to the
transactions with Alpha,
please more fully address here and throughout the filing the
following:
Explain why Alpha will receive Series B preferred stock rather than
common stock in
the Resulting Issuer;
Explain the material terms of the series B preferred stock,
including conversion
terms, participation rights, and the potential impact of the
Series B preferred stock on
EPS calculations;
Explain why Alpha will receive additional warrants with a nominal
exercise price,
and address how the additional warrant issuance will be accounted
for;
Explain who Alpha is, and disclose Alpha's total potential ownership
interest in the
Resulting Issuer; and
Based on the series of transactions with Alpha, disclose the
estimated fair value
implied for shares of the Resulting Issuer.
29. In regard to the disclosures on page 204 related to the Intellectual
Property Acquisition,
please disclose here and throughout the filing the reason why Tikkun
will sell 7,774,463
shares of the 10,360,007 shares of Jay Pharma common stock that it
received for the
intellectual property to Alpha for a nominal aggregate purchase price
of $10.00. Please
disclose and discuss any existing relationships between Tikkun and
Alpha. In addition,
please explain if and how the transaction between Tikkun and Alpha
impacted the
determination of the estimated fair value of the intellectual property
to be acquired.
30. In regard to the disclosures on page 204 related to the Ameri
Transaction, describing the
intended spin off as a "sale" to a "Buyer" seems confusing and does
not appear to
accurately convey the substance of the transaction. It appears that
essentially the entire
business and operations of Ameri will be spun-off to Ameri's current
Series A preferred
shareholders. Please clarify the disclosures here and throughout the
filing to disclose
more clearly and transparently the substance of this transaction.
31. Refer to note 9 on page 207. Please disclose the nature of the
intellectual property
acquired from Tikkun and the proposed accounting policy for this
asset, including the
estimated useful life. Please revise the annual and interim pro forma
statements of
operations to include pro forma adjustments to record any related
amortization expense.
In addition, please disclose how the estimated fair value of the
intellectual property was
Brent Kelton
FirstName LastNameBrent Kelton
AMERI Holdings, Inc.
Comapany NameAMERI Holdings, Inc.
June 24, 2020
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determined.
32. Refer to notes F and FF on page 208. Please disclose how the number of
pro forma shares
used in each pro forma loss per share calculation was determined.
Please also provide a
summary of any additional shares, options, and warrants that will also
be outstanding in
the Resulting Issuer but that are not included in the pro forma shares
because they are
anti-dilutive. In addition, please explain how and why it is
appropriate for the pro forma
financial statements not to reflect the proposed reverse stock split,
or revise the related
disclosures accordingly.
Management of Resulting Issuer, page 209
33. Disclose the beginning date of Mr. David Johnson's employment at
Alliqua BioMedical,
Inc. Additionally, describe briefly the business experience of Messrs.
John Van Buiten,
George Kegler, Henoch Cohn, and R. James Woolsey during the past five
years. See Item
401(e)(1) of Regulation S-K.
Principal Shareholders of Jay Pharma and the Resulting Issuer, page 225
34. Identify the natural person having voting and dispositive power over
the securities
beneficially owned by Tikkun. Additionally, clarify whether Mr. Konrad
Ackerman is the
natural person having voting and dispositive power over the securities
beneficially owned
by Alpha. If Mr. Ackerman is not that natural person, identify the
natural person having
voting and dispositive power over the securities beneficially owned by
Alpha.
Ameri Management's Discussion and Analysis of Financial Condition and Results
of Operations,
page 255
35. Please address the following:
Revise the disclosures related to Ameri's revenue recognition
policies on pages 255
and 263 to comply with the provisions of ASC 606;
Correct the disclosures related to Ameri's significant customers for
the period ended
March 31, 2020 on pages 255 and 258 to ensure that they are
accurate. The current
disclosures indicates five significant customers accounted for 59%
of revenues;
however, the specific disclosures related to the five significant
customers only
represent 46% of revenues; and
Provide liquidity disclosures for the annual periods presented. The
current
disclosures on page 261 appear to repeat the interim disclosures.
Jay Pharma Management's Discussion and Analysis of Financial Condition and
Results of
Operations, page 285
36. Please address the following:
Revise the disclosure on page 292 that cash flows from financing
activities during the
period ended March 31, 2020 were due to the sale of common stock
since it appears
that they were due to proceeds received from a loan; and
Brent Kelton
FirstName LastNameBrent Kelton
AMERI Holdings, Inc.
Comapany NameAMERI Holdings, Inc.
June 24, 2020
June 24, 2020 Page 8
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FirstName LastName
Revise the disclosures on page 289 to disclose and discuss short
term and long term
liquidity needs, including the estimated time-frames and
anticipated costs related to
the clinical trials and additional research efforts that you
disclose.
Exclusive Forum, page 304
37. Disclosure that Ameri's charter and bylaws do not provide for an
exclusive forum appears
inconsistent with Article VII, Section 7.8 of the amended and restated
bylaws of Ameri
filed as Exhibit 3.3 which stipulates that the Court of Chancery in
the state of Delaware
will be the sole and exclusive forum for any internal corporate
claims, including any
derivative action or proceeding. Please reconcile the disclosures.
Experts, page 305
38. The current disclosure that Ameri's annual financial statements
include a going concern
audit opinion do not appear to be accurate based on the auditors'
report provided with
Ameri's annual financial statements. Please clarify, or revise this
disclosure and the
related disclosure on page 262.
Ameri Financial Statements, page F-20
39. Please provide the disclosures required by ASC 205-40-50-1 through 14,
or explain how
and why you determined that no disclosures are required. This comment
is applicable to
Ameri's annual and interim financial statements.
40. Refer to "Basis of Presentation" in note 2 on page F-26. It appears
that the disclosures
indicating certain information and note disclosures have been omitted
and adjustments
have been reflected are inappropriate for annual financial statements
and should be
revised. Please also ensure that Ameri's annual financial statements
include all required
disclosures.
41. Refer to "New Standards to be Implemented" in note 2 on page F-28 and
note 2 on page
F-50. Please correct the required adoption date for ASC 842 based on
the provisions of
ASU 2019-10.
Signatures, page II-5
42. The company's principal accounting officer also must sign the
registration statement.
Additionally, any person who occupies more than one of the specified
positions, for
example, principal financial officer and principal accounting officer
or controller, must
indicate each capacity in which he signs the registration statement.
See instructions for
signatures on Form S-4, and revise.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments,
action, or absence of
Brent Kelton
AMERI Holdings, Inc.
June 24, 2020
Page 9
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment before the requested effective date of the
registration
statement.
You may contact Andi Carpenter, Staff Accountant, at (202) 551-3645 or
Anne M.
McConnell, Staff Accountant, at (202) 551-3709 if you have questions regarding
comments on
the financial statements and related matters. Please contact Edward M. Kelly,
Senior Counsel, at
(202) 551-3728 or Sherry Haywood, Senior Counsel, at (202) 551-3345 with any
other
questions.
Sincerely,
FirstName LastNameBrent Kelton
Division of
Corporation Finance
Comapany NameAMERI Holdings, Inc.
Office of
Manufacturing
June 24, 2020 Page 9
cc: Richard A. Friedman, Esq.
FirstName LastName