Item
1.01 Entry into a Material Definitive Agreement.
On April 19, 2018,
Helios and Matheson Analytics Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting
Agreement”) with Canaccord Genuity LLC, on behalf of itself and as representative of the underwriters named therein (the
“Underwriters”), pursuant to which the Company agreed to issue and sell to the Underwriters in a best-efforts underwritten
public offering (the “Offering”) of up to approximately $30.0 million in gross proceeds of securities of the Company
including (A) 10,500,000 Series A-2 units (the “Series A-2 Units”), with each Series A-2 Unit consisting of (i) one
share (the “Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”),
and (ii) one Series A-2 warrant to purchase one share of Common Stock (the “Series A-2 Warrants”); and for those purchasers
whose purchase of Series A-2 Units would result in the purchaser, together with its affiliates and certain related parties, beneficially
owning more than 9.99% of the Company’s outstanding Common Stock following the consummation of the Offering, (B) 500,000
Series B-2 units (the “Series B-2 Units”, and together with the “Series A-2 Units”, the “Units”),
consisting of (i) one pre-funded Series B-2 warrant to purchase one share of Common Stock (the “Series B-2 Warrants”,
and together with the Series A-2 Warrants, the “Warrants”) and (ii) one Series A-2 Warrant. The Shares, Series A-2
Warrants and Series B-2 Warrants are immediately separable. The Units were sold at a price to the public equal to $2.75 per Unit.
The Underwriters will purchase the Units from us at a price of $2.59875 per unit, representing a 5.5% discount from the public
offering price.
Each Warrant will be
exercisable at any time on or after the issuance date until the five-year anniversary of the issuance date. Each Series A-2 Warrant
will be exercisable at a price of $3.00 per share of Common Stock. Each Series B-2 Warrant will have an aggregate exercise price
of $2.75 per share of Common Stock, all of which will be pre-funded except for a nominal exercise price of $0.001 per share of
Common Stock. The Warrants will not be listed on The Nasdaq Capital Market or any other securities exchange.
The Company expects
to issue and deliver the securities sold in the Offering to the Underwriters against payment therefore on or about April 23, 2018,
subject to the satisfaction of customary closing conditions. The Company expects to receive approximately $27.5 in net proceeds
from the sale of the Units, after deducting underwriting discounts and commissions equal to $1,663,750
and estimated offering expenses of approximately $1,050,000 assuming no exercise of the
Warrants. In addition, Palladium Capital Advisors, LLC acted as financial advisor in connection with the Offering and will receive
a financial advisory fee equal to $600,000. The Company intends to use the net proceeds of the Offering to increase the
Company’s ownership stake in MoviePass Inc., its majority-owned subsidiary (“MoviePass”), or to support the operations
of MoviePass or MoviePass Ventures, LLC, a wholly owned subsidiary of the Company; to satisfy a portion or all of any amounts payable
in connection with the convertible notes issued on November 7, 2017 and January 23, 2018, to the extent that they remain outstanding;
and for general corporate purposes and transaction expenses. The proceeds may also be used for acquisitions.
The exercise price of and number of shares
of Common Stock underlying the Warrants are subject to adjustment upon the issuance by the Company of stock dividends, stock splits,
and similar proportionately applied changes affecting the Company’s outstanding Common Stock. The Series A-2 Warrants also
include “full ratchet” anti-dilution protection provisions (the “Full Ratchet Adjustment”), which provide
that if the Company issues any shares of the Common Stock at a price less than the then current exercise price of the Series A-2
Warrants, or if the Company issues any securities convertible into, or exercisable, or exchangeable for, shares of the Common Stock
with an exercise or conversion price less than the then current exercise price of the Series A-2 Warrants, then the exercise price
of the Series A-2 Warrants will automatically be reduced to the issuance price of the new shares of the Common Stock or the exercise
or conversion price of the Warrants, options or other convertible or exchangeable securities.
The Full Ratchet
Adjustment does not apply if the Company issues “Excluded Securities”, including certain (i) option and other
equity incentive awards approved by the Company’s board of directors to be issued to directors, officers, consultants
and employees, (ii) shares of the Common Stock issuable pursuant to existing employment agreements, (iii) shares of the
Common Stock issued upon conversion or exercise of convertible securities that were previously issued, (iv) shares of the
Common Stock issued pursuant to strategic license agreements, mergers or acquisitions (but does not include a transaction in
which the Company is issuing securities primarily for the purpose of raising capital), (v) shares of the Common Stock issued
under the at-the-market offering, filed with the Securities and Exchange Commission on April 18, 2018 (the “ATM
Offering”) after the fifteenth calendar day that the Series A-2 Warrants are issued and (vi) 500,000 shares granted by
the Company’s board of directors to Helios & Matheson Information Technology Ltd, a current stockholder of the
Company, in exchange for its entry into a 12-month lock-up agreement with us. In addition, if the Company issues any shares
of the Common Stock at a price that varies with the market price of the Company’s Common Stock, or if the Company
issues any securities convertible into, or exercisable, or exchangeable for, shares of the Common Stock at an exercise or
conversion price that varies with the market price of the Company’s Common Stock (excluding customary
anti-dilution provisions), holders of the Series A-2 Warrants will have the right to substitute the variable price for the
then exercise price of the Series A-2 Warrants (the “Variable Price Adjustment”). The Variable Price Adjustment
does not apply if the Company issues shares of the Common Stock in the ATM Offering.
Holders of the Warrants
shall be entitled to any purchase rights granted to the Common Stock holders and the Company shall not enter into any fundamental
transaction unless the successor entity assumes the obligations of the Company under the Warrants. Notwithstanding, in the event
of a fundamental transaction, as described in the Warrants and generally including any merger with or into another entity, sale
of all or substantially all of the Company’s assets, tender offer or exchange offer, or reclassification of the Common Stock,
the Company or any successor entity will pay, at the holder’s option, an amount of cash equal to the value of the Warrant
as determined in accordance with the Black Scholes option pricing model and the terms of the Warrants. The terms of the Warrants
prohibit a holder from exercising its Warrants if doing so would result in such holder (together with its affiliates and other
persons acting as a group) beneficially owning more than 4.99% or 9.99% of the outstanding shares of the Common Stock after giving
effect to such exercise.
If a registration statement
relating to the issuance of the shares underlying the Warrants is not effective or available, the Warrants may be exercised on
a cashless basis. No fractional shares of Common Stock will be issued in connection with the exercise of a Warrant. In lieu of
a fractional share, the Company will round up to the next whole share.
The Offering is being
made pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-222685), which was declared effective
by the Securities and Exchange Commission (the “SEC”) on February 9, 2018. A preliminary prospectus supplement and
the accompanying prospectus relating to the Offering was filed with the SEC on April 18, 2018, and a final prospectus supplement
and the accompanying prospectus relating the Offering will be filed with the SEC no later than April 20, 2018.
The Underwriting Agreement
contains customary representations and warranties, conditions to closing, indemnification obligations of the Company and the Underwriters,
including for liabilities under the Securities Act of 1933, as amended, other obligations of the parties, and termination provisions.
In addition, pursuant to the terms of the Underwriting Agreement and related “lock-up” agreements, the Company, each
director and executive officer of the Company has agreed, subject to certain exceptions, not to sell, transfer or otherwise dispose
of securities of the Company during the three-month period following the date of the Underwriting Agreement, or such persons are
otherwise party to existing lock-up agreements with the Underwriters or the Company or the holders of its convertible notes.
The Underwriting Agreement
is included as an exhibit to this Current Report on Form 8-K (this “Current Report”) to provide investors and security
holders with information regarding its terms. It is not intended to provide any other factual information about the Company. The
representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of such agreement
and as of specific dates, were solely for the benefit of the parties to the Underwriting Agreement, and may be subject to limitations
agreed upon by the parties, including being qualified by confidential disclosures exchanged between the parties in connection with
the execution of the Underwriting Agreement.
The Underwriting Agreement,
form of Series A-2 Warrant and form of Series B-2 Warrant are filed herewith as Exhibits 1.1, 4.1 and 4.2, respectively, and are
incorporated herein by reference. The foregoing description of the Underwriting Agreement, the Series A-2 Warrants and the Series
B-2 Warrants does not purport to be complete and is qualified in its entirety by reference to such exhibits.
The legal opinion,
including the related consent, of Greenberg Traurig, LLP is filed as Exhibit 5.1 and 23.1 to this Current Report.
This Current Report
contains forward-looking statements that involve risk and uncertainties, such as statements related to the anticipated closing
of the Offering and the amount of net proceeds expected from the Offering. The risks and uncertainties involved include the Company’s
ability to satisfy certain conditions to closing on a timely basis or at all, as well as other risks detailed from time to time
in the Company’s SEC filings.