|
Item 1.01
|
Entry Into a Material Definitive Agreement.
|
As previously reported, on August 16, 2017 (the “Closing Date”), Helios and Matheson Analytics
Inc. (the “Company”) issued to an institutional investor (the “Investor”), pursuant to a securities purchase
agreement dated August 15, 2017 (the “August Securities Purchase Agreement”), senior secured convertible notes in the
aggregate principal amount of $10,300,000 (the “August 2017 Notes”) together with a warrant to purchase common stock
of the Company (the “August Warrant”). Pursuant to a registration rights agreement entered into between the Company
and the Investor on the Closing Date, the Company agreed to file a registration statement (the “Registration Statement”)
registering the common stock that could be issued to the Investor upon conversion of the August 2017 Notes and exercise of the
August Warrant.
On November 7, 2017, pursuant to a securities
purchase agreement (the “November Securities Purchase Agreement”) entered into by the Company and certain institutional
investors, including the Investor (collectively, the “Buyers”), on November 6, 2017, the Company sold and issued senior
convertible notes in the aggregate principal amount of $100,000,000 (the “November 2017 Notes”).
The Fourth Amendment and Exchange Agreement
On November 21, 2017 (the “Exchange
Date”), the Company and the Investor entered into a Fourth Amendment and Exchange Agreement (the “Fourth Exchange Agreement”)
for the purpose of:
(i) agreeing to reduce
the number of shares of common stock required to be included in the Registration Statement such that the Registration Statement
will include only 1,560,391 of the total 2,050,720 shares of common stock issued or issuable upon exercise of the August Warrant
(the “August Warrant Shares”) and 1,455,302 shares of common stock issuable upon exercise of $5,821,208 in aggregate
principal amount of the August 2017 Notes (the remaining $4,630,624 in aggregate principal amount of the August 2017 Notes, which
are convertible into 1,157,656 shares of common stock that are not included on such Registration Statement, is referred to in this
Current Report as the “Remaining August Note”);
(ii) exchanging the August Warrant for the
purchase of 10,000 of the August Warrant Shares for a new warrant (the “Exchange Warrant”); and
(iii) amending the August 2017 Notes and
the November 2017 Notes to obtain the right to amend the MoviePass SPA (as defined in the November Securities Purchase Agreement),
in order to issue to MoviePass Inc. (“MoviePass”) upon the closing of the transactions contemplated by the MoviePass
SPA, in lieu of shares of common stock, one or more promissory notes convertible into or exchangeable for up to an aggregate of
4,000,001 shares of common stock subject to obtaining approval of the Nasdaq Stock Market, pursuant to Listing Rule 5635, of the
issuance of such shares of common stock (collectively, the “Modified MP Transaction”) and (ii) to obtain a waiver such
that neither the Modified MP Transaction nor any other transactions contemplated by the MoviePass SPA (as may be amended to effect
the Modified MP Transaction) or the Investment Option Agreement, dated October 11, 2017, between the Company and MoviePass shall
be deemed to be a Fundamental Transaction (as defined in the November Notes and the August Notes) or a transaction that would trigger
a redemption of the August Warrant pursuant to Section 4(c)(i) of the August Warrant. Pursuant to the Fourth Exchange Agreement,
the Investor also:
(A) waived
any right that the holders of the November 2017 Notes may have to adjust the Conversion Price (as defined in the November 2017
Notes) as a result of the issuance of the Exchange Warrant or any of the shares issued pursuant to the Exchange Warrant (the “Exchange
Warrant Shares”);
(B) waived
any right that the holders of the August Warrant may have to adjust the Exercise Price and the number of August Warrant Shares
(each as defined in the August Warrant) as a result of the issuance of the Exchange Warrant or any of the Exchange Warrant Shares;
(C) waived
the Investor’s right to substitute the Variable Price (as defined in the August 2017 Notes) of the Exchange Warrant for the
Conversion Price (as defined in the August 2017 Notes) and to waive the Investor’s right to substitute the Variable Price
(as defined in the August Warrants) of the Exchange Warrant for the Exercise Price (as defined in the August Warrants);
(D) waived
any prohibition that may exist under any provision of the Transaction Documents (as defined in the August Securities Purchase Agreement)
and the Transaction Documents (as defined in the November Securities Purchase Agreement) with respect to the issuance of the Exchange
Warrant and any of the Exchange Warrant Shares and with respect to any cash payments that the Company may make pursuant to the
Exchange Warrant;
(E) amended
the definition of Permitted Indebtedness set forth in the August 2017 Notes and the November 2017 Notes to include the Exchange
Warrant, to the extent the Exchange Warrant is deemed to constitute Indebtedness (as defined in the August 2017 Notes and the November
2017 Notes); and
(F) effective
as of the 5th trading day after the Registration Statement is declared effective, the August Securities Purchase Agreement, the
August 2017 Notes, the November Securities Purchase Agreement and the November 2017 Notes will be amended and restated, automatically
without any further action on the part of the Company or the Investor required, to intentionally omit or to delete the provisions
(i) prohibiting the filing of additional registration statements by the Company and (ii) prohibiting the issuance of additional
securities by the Company without the consent of the Investor (the “Additional Offering Prohibition Waiver”).
The Exchange Warrant
The Exchange Warrant is in substantially
the form of the August Warrant, except that:
|
●
|
The Exchange Warrant has an exercise price of $14.31
|
|
●
|
The expiration date of the Exchange Warrant is November 21, 2022.
|
|
●
|
The Exchange Warrant may not be exercised into shares of common stock unless the stockholders of the Company approve the issuance
in compliance with the rules and regulations of the Nasdaq Capital Market (the “Stockholder Approval”).
|
|
●
|
The Exchange Warrant is subject to redemption, refund or alternate cashless exercise after the Remaining August Note is no
longer outstanding (or, if early, after February 16, 2018, if the Company fails to remain current in its filings or an event of
default under the August 2017 Notes occurs) (the “Adjustment Time”). See “Redemption, Refund and Alternate Cashless
Exercise” below.
|
Redemption, Refund and Alternate Cashless Exercise
In exchange for the Company’s receipt
of the waivers described above, including without limitation, the Additional Offering Prohibition Waiver, the Company and the holder
of the Exchange Warrant agreed that after the Adjustment Time, one of the following shall occur:
(i) if the net proceeds from the sale of
shares of common stock issuable upon conversion of the Remaining August Note by the holder of the Exchange Warrant exceeds $18.1
million (subject to reduction for any cash payment of the Remaining August Note), the Company will receive up to the first $5 million
in excess of such amount;
(ii) if the net proceeds from the sale of
shares of common stock issuable upon conversion of the Remaining August Note by the holder of the Exchange Warrant is less than
$18.1 million (subject to reduction for any cash payment of the Remaining August Note) (such difference, the “Redemption
Maximum Amount”), either of the following may occur:
|
●
|
If the Stockholder Approval has been obtained, the holder of the Exchange Warrant may request to effect an alternate cashless
exercise of the Exchange Warrant, in whole or in part, pursuant to which, in lieu of the shares of common stock issuable upon exercise
of the Exchange Warrant, the holder would receive up to the Redemption Maximum Amount in shares of common stock at the Alternate
Cashless Exercise Price (as defined below) (an “Alternate Cashless Exercise”); or
|
|
●
|
The holder of the Exchange Warrant may request a redemption in cash of all, or any part, of the Exchange Warrant at a price
equal to such difference; provided, that if certain equity conditions are met (including obtaining the Stockholder Approval), the
Company may elect to pay such redemption price in shares of common stock in an Alternate Cashless Exercise.
|
The Alternate Cashless Exercise Price is
defined as that price which shall be the greater of (x) $2.86 and (y) the lowest of (i) the applicable exercise price as in effect
on the applicable exercise date, (ii) 85% of the VWAP of the shares of common stock as of the trading day immediately preceding
the trading day of delivery of the applicable exercise notice, and (iii) 85% of the lowest VWAP of the shares of common stock on
any trading day during the 2 trading day period commencing on, and including, the trading day of the delivery of the applicable
exercise notice.
The discussion above does not purport to
be a complete description of the Fourth Amendment and Exchange Agreement or the Exchange Warrant described in this Current Report
on Form 8-K (the “Current Report”) and it is qualified in its entirety by reference to the full text of such documents,
which are attached as exhibits to this Current Report and are incorporated herein by reference.