Enveric Biosciences, Inc. - Quarter Report: 2015 March (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT UNDER SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2015

o	TRANSITION REPORT UNDER SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to .

Commission File Number 000-26460

SPATIALIZER AUDIO LABORATORIES, INC.
(Name of registrant in its charter)

DELAWARE		95-4484725
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

53 Forest Avenue, First Floor, Old Greenwich, Connecticut		06870
(Address of principal executive offices)		(Zip Code)

(203) 489-9500
(Issuer’s telephone number, including area code)


(Former name, former address and former fiscal year, if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety days. ☒ YES  NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ YES  NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

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

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

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 15,409,999 shares of Common Stock, $0.01 par value, as of May 8, 2015.

SPATIALIZER AUDIO LABORATORIES, INC.
Quarterly Report on Form 10-Q
For the Three Months Ended March 31, 2015

INDEX

PART I. FINANCIAL INFORMATION		2

Item 1.	Unaudited Financial Statements	2

	Balance Sheets as of March 31, 2015 and December 31, 2014	2

	Statements of Operations for the Three Months Ended March 31, 2015 and March 31, 2014	3

	Statements of Cash Flows for the Three Months Ended March 31, 2015 and March 31, 2014	4

	Notes to Unaudited Financial Statements	5-7

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	8-9

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	9

Item 4.	Risk Controls and Procedures	9

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	10

Item 1a.	Risk Factors	10

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	10

Item 3.	Defaults Upon Senior Securities	10

Item 4.	Mine Safety Disclosures	10

Item 5.	Other Information	10

Item 6.	Exhibits	11

Signatures		12

Exhibits		13

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SPATIALIZER AUDIO LABORATORIES, INC.

UNAUDITED BALANCE SHEETS

	March 31, 2015			December 31, 2014
ASSETS

Current Assets:
Cash and Cash Equivalents	$	3,898		$	5,085

Total Current Assets		3,898			5,085

Total Assets	$	3,898		$	5,085

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:
Accounts Payable and Accrued Liabilities	$	10,344		$	8,956

Total Current Liabilities		10,344			8,956

Commitments and Contingencies

Stockholders' Equity (Deficit):
Preferred shares, $.01 par value, 1,000,000 shares authorized, none issued and outstanding		--			--
Common shares, $.01 par value, 300,000,000 shares authorized, 15,409,999 shares issued and outstanding		154,099			154,099
Additional Paid-In Capital		47,268,208			47,268,208
Accumulated Deficit		(47,428,753	)		(47,426,178	)

Total Stockholders' Deficit		(6,446	)		(3,871	)

Total Liabilities and Stockholders' Deficit	$	3,898		$	5,085

The accompanying notes are an integral part of these statements.

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SPATIALIZER AUDIO LABORATORIES, INC.

UNAUDITED STATEMENTS OF OPERATIONS

	Three Months Ended March 31,
	2015			2014
Operating Expenses :
General and Administrative	$	2,300		$	7,584

Operating Loss		(2,300	)		(7,584	)

Loss Before Income Taxes		(2,300	)		(7,584	)
Income Taxes		275			283

Net Loss	$	(2,575	)	$	(7,867	)
Basic and Diluted Loss Per Share	$	(0.00	)	$	(0.00	)
Weighted Average Shares Outstanding – Basic and Diluted		15,409,999			14,901,647

The accompanying notes are an integral part of these statements.

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SPATIALIZER AUDIO LABORATORIES, INC.

UNAUDITED STATEMENTS OF CASH FLOWS

	Three Months Ended March 31,
	2015			2014
Cash Flows from Operating Activities:
Net Loss	$	(2,575	)	$	(7,867	)
Adjustments to reconcile net loss to net cash used in operating activities:
Net Change in Assets and Liabilities:
Accounts Payable and Accrued Liabilities		1,388			(19,912	)
Net Cash Used In Operating Activities		(1,187	)		(27,779	)

Cash Flows from Financing Activities:
Issuance of Common Stock		-			50,000
Net Cash Provided from Financing Activities		-			50,000

Increase (decrease) in Cash and Cash Equivalents		(1,187	)		22,221

Cash and Cash Equivalents, Beginning of Period		5,085			249
Cash and Cash Equivalents, End of Period	$	3,898		$	22,470
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest	$	-		$	-
Income Taxes		275			1,732

The accompanying notes are an integral part of these statements.

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SPATIALIZER AUDIO LABORATORIES, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS

March 31, 2015

OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Spatializer Audio Laboratories, Inc. (the "Company") was incorporated under the laws of Delaware in 1994. Until 2007, the Company was a developer, licensor and marketer of next generation technologies for the consumer electronics, personal computing, entertainment and cellular telephone markets. The principal business of the Company was closed down in 2007, and the Company has no further operating activities and is now a shell company.

Going Concern

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

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

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

Basis of presentation

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with instructions to Form 10-Q. Accordingly they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.

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

Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

Cash Equivalents

For the purposes of the statements of cash flows, the Company considers all highly liquid cash investments that mature in three months or less when purchased, to be cash equivalents. Cash equivalents are stated at cost, which approximates fair value.

Stock Options

Compensation cost relating to stock-based payments, including grants of employee stock options, is recognized in financial statements based on the fair value of the equity instruments issued on the grant date. The Company recognized the fair value of stock-based compensation awards as compensation expense in its statement of operations on a straight line basis, over the vesting period.

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SPATIALIZER AUDIO LABORATORIES, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

March 31, 2015

Income Taxes

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

Earnings Per Share

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

Fair Value of Financial Instruments

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

Recently Issued Accounting Pronouncements

In August 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which provides guidance under U.S. GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. In doing so, the amendments should reduce diversity in the timing and content of footnote disclosures. The ASU is effective for all entities and for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted. The adoption of ASU No. 2014-15 is not expected to have a significant impact on the Company's financial statements and related disclosures.

2. INCOME TAXES

At March 31, 2015, the Company had net operating loss carry-forwards for Federal income tax purposes of which may be available to offset future Federal taxable income, if any. These net operating loss carry forwards are subject to an annual limitation and utilization of these loss carryforwards is subject to further limitation as a result of change in ownership of the Company, as defined by Federal tax law. Management believes these loss-carryforwards will likely not be fully realized.

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

3. STOCK OPTION PLAN

There are no outstanding stock options as of March 31, 2015.

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SPATIALIZER AUDIO LABORATORIES, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

March 31, 2015

4. STOCKHOLDERS' EQUITY

On January 15, 2014, the Company issued 3,267,974 shares of common stock to Lone Star Value Investors, LP, an entity controlled by a former director and officer of the Company, for cash proceeds of $50,000. The proceeds of this issuance are used to assist in funding the Company's operating expenses.

5. SUBSEQUENT EVENTS

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

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

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

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SPATIALIZER AUDIO LABORATORIES, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

March 31, 2015

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

This Management's Discussion and Analysis and other parts of this report contain forward-looking statements that involve risks and uncertainties, as well as current expectations and assumptions. From time to time, the Company may publish forward-looking statements, including those that are contained in this report, relating to such matters as anticipated financial performance, business prospects, technological developments, new products, research and development activities and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause the Company's actual results and experience to differ materially from the anticipated results or other expectations expressed in the Company's forward-looking statements. The risks and uncertainties that may affect the operations, performance, development and results of the Company's business include, but are not limited to, its ability to maintain sufficient working capital, adverse changes in the economy, the ability to attract and maintain key personnel, its ability to identify or complete an acceptable merger or acquisition, and future results related to acquisition, merger or investment activities. The Company's actual results could differ materially from those anticipated in these forward-looking statements, including those set forth elsewhere in this report. The Company assumes no obligation to update any such forward-looking statements.

CRITICAL ACCOUNTING POLICIES AND COMMENTS RELATED TO OPERATIONS

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

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

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

RESULTS OF OPERATIONS

Revenues

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

General and Administrative

General and administrative expenses for the three months ended March 31, 2015 and March 31, 2014 were $2,300 and $7,584, respectively. The decrease is due to decreased legal fees.

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SPATIALIZER AUDIO LABORATORIES, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

March 31, 2015

LIQUIDITY AND CAPITAL RESOURCES

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

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

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Risk Controls and Procedures

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

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

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SPATIALIZER AUDIO LABORATORIES, INC.

OTHER INFORMATION

March 31, 2015

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1a. Risk Factors

In addition to the other information set forth in this Quarterly Report, stockholders should carefully consider the factors discussed in Item 1A, Risk Factors, of our Annual Report on Form 10-K for the year ended December 31, 2014, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

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Many of the items discussed in the Schedule 14C are relevant to shareholder's ownership and rights; thus the reader of this report should fully read the information contained within the Schedule 14C filed on May 6, 2015.

Item 6.

Exhibits:

The following exhibits are filed as part of this report:

31.1		CEO Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as Amended.

31.2		CFO Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as Amended.

32.1		CEO Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		CFO Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Cash Flows and (iv) the Notes to Consolidated Financial Statements, tagged as blocks of text and in detail (XBRL).

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SIGNATURES

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 thereunto duly authorized.

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

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INDEX TO EXHIBITS

Exhibit No.		Description

31.1		CEO Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as Amended.

31.2		CFO Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as Amended.

32.1		CEO Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		CFO Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Cash Flows and (iv) the Notes to Consolidated Financial Statements, tagged as blocks of text and in detail (XBRL).

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

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