Item 1.01
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Entry into a Material Definitive Agreement.
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MoviePass Subscription Agreement
Background
As previously disclosed, on August 15, 2017,
Helios and Matheson Analytics Inc. (“Helios”) entered into a Securities Purchase Agreement with MoviePass Inc. (“MoviePass”),
which Helios and MoviePass amended on October 6, 2017 (collectively, the “MoviePass Purchase Agreement”). On December
11, 2017, pursuant to the MoviePass Purchase Agreement, Helios purchased shares of MoviePass’ common stock, par value $0.0001
per share (the “MoviePass Common Stock”) totaling 57.8% of the outstanding MoviePass Common Stock (excluding shares
underlying MoviePass options and warrants) after giving effect to the transaction (the “Acquisition”).
As previously disclosed, on October 11, 2017,
Helios and MoviePass entered into an investment option agreement (the “Option Agreement”), pursuant to which MoviePass
granted Helios an option to purchase additional shares of MoviePass Common Stock in an amount up to $20 million (the “Option”).
From November 2, 2017 through December 15, 2017, Helios exercised the Option in full. Upon full exercise of the Option, Helios
owned 62.41% of the outstanding shares of MoviePass Common Stock (excluding shares underlying MoviePass options and warrants).
Helios previously announced the closing of the
Acquisition in a Current Report on Form 8-K, filed on December 11, 2017, containing the audited financial statements of MoviePass
for the years ended December 31, 2016 and 2015, and the unaudited pro forma combined financial statements of Helios and MoviePass
(which Helios amended by filing a Current Report on Form 8-K/A on February 9, 2018).
New Subscription Agreement with MoviePass
Following the full exercise of the Option, from
December 19, 2017 through February 20, 2018, Helios provided cash advances to MoviePass to support MoviePass’ working capital
and operational requirements, as well as to support the expansion of MoviePass’ business plans and objectives. The total
amount advanced by Helios to MoviePass during this period totaled $55,525,000 (the “Advance”).
On March 8, 2018, Helios entered into a Subscription
Agreement with MoviePass (the “March 2018 Agreement”), pursuant to which, in lieu of MoviePass repaying the Advance,
MoviePass agreed to sell to Helios, and Helios agreed to accept, an amount of MoviePass Common Stock equal to 18.79% of the total
then outstanding MoviePass Common Stock (excluding shares underlying MoviePass options and warrants) (the “MoviePass Purchased
Shares”), based on a pre-money valuation of MoviePass of $240 million as of December 31, 2017 (the “Pre-Money Valuation
Amount”). Pursuant to the Agreement, MoviePass also agreed to issue to Helios, in addition to the MoviePass Purchased Shares,
without payment of additional consideration by Helios, for purposes of providing Helios with anti-dilution protection with respect
to Helios’ prior equity investments in MoviePass, an amount of shares of MoviePass Common Stock that caused Helios’
total ownership of the outstanding shares of MoviePass Common Stock (excluding shares underlying MoviePass options and warrants),
together with the MoviePass Purchased Shares, to equal 81.2% as of March 8, 2018.
Accordingly, as of March 8, 2018, Helios owns
81.2% of the outstanding shares of MoviePass Common Stock (excluding shares underlying MoviePass options and warrants). MoviePass
has no class of shares outstanding or designated other than Common Stock.
The above discussion does not purport to be
a complete description of the March 2018 Agreement and is qualified in its entirety by reference to the full text of the March
2018 Agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.